Market News

The yen's break below 160 (USD/JPY above 160) for the first time since the record joint intervention underscores how limited the impact of that $98.7 billion spending effort has been against the pull of widening rate differentials, and reinforces that verbal or coordinated FX intervention alone struggles to offset a genuine shift in relative monetary policy expectations. The accompanying rise in the 10-year JGB yield to a fresh 30-year high of 2.95 percent, tracking the move in US Treasury yields following Warsh's remarks, adds a second channel of pressure, since higher Japanese long-term yields raise the risk of spillover into global bond markets given Japan's role as a major holder of foreign assets. Bessent's description of the yen's…

With no fresh headlines driving the move, gold's continued softness looks like simple follow-through from Friday's sharp reaction to Warsh's hawkish Jackson Hole remarks, which knocked spot prices down more than 3 percent to around $4,450 an ounce and erased the metal's gains for the week. The absence of new catalysts means the metal is likely trading on residual positioning, with traders who were caught offside by Friday's move continuing to trim exposure, or dip-buyers holding off until there's more clarity on whether the coming August jobs and inflation data will validate Warsh's hawkish framing. With the September rate decision now more finely balanced than it appeared a week ago, gold is likely to stay rangebound and headline-driven…

BofA's read suggests Warsh's speech has narrowed his own room for manoeuvre, effectively raising the bar for anything other than a September hike and making incoming data, rather than further rhetoric, the key swing factor for the meeting. If the bank is right that a hold would cost Warsh the credibility he built with Friday's remarks, then markets should treat the September decision as closer to a coin flip resting on the August jobs and inflation reports than a foregone hawkish or dovish outcome. The clarification that Warsh is focused on core PCE, and specifically on the share of the consumption basket running above 3 percent annually, gives traders a more concrete framework for parsing incoming inflation prints than his more ambiguous…

China official August Manufacturing PMI 49.8

• expected 49.7, prior 49.2

Non-manufacturing PMI 49.0

• expected 49.5, prior49.0

Composiute PMI is 49.5

• prior 49.3

Preview of this here earlier:

• Economic and event calendar in Asia 31 August 2026 - China official PMIs

I'll have more to come on this separately, details and implications. ADDED, here is the extra now:

• China factory activity beats forecasts but stays in contraction in August

This article was written by Eamonn Sheridan at investinglive.com.

The better-than-expected manufacturing PMI print offers some relief after July's steep fall, and the beat against consensus should support a modest improvement in risk sentiment toward Chinese assets and commodity-linked currencies, even though the index remains below the 50 line separating growth from contraction. The stalled non-manufacturing PMI, unchanged at 49.0, tempers the positive read from manufacturing, since it confirms services and construction activity are not yet showing the same signs of stabilisation, consistent with recent data showing consumer spending and urban investment losing momentum. Markets will likely parse the composite PMI's modest improvement to 49.5 as evidence the broader economy is contracting at a slower…

The inventory figure is the most consequential data point here for GDP-watchers, since a 0.3 percentage point drag from private non-farm inventories is a meaningful subtraction heading into Tuesday's national accounts release. Because the drawdown was concentrated in mining inventories, it points to a likely offsetting boost from resources exports in the same GDP report, which could partially cushion the headline growth number even as the inventory component itself detracts. The softer-than-expected private sector credit growth suggests some cooling in borrowing momentum, which is consistent with the more cautious tone the RBA has struck on the economy's spending pulse. On profits, the split between a strong mining rebound and a soft…

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate. More here on this.

• PBoC injected 447bn yuan through overnight reverse repos
• injects 5bn yuan via 7-day reverse repos, 1.4% rate unchanged

This article was written by Eamonn Sheridan at investinglive.com.

CENTCOM's decision to publicly rebut the IRGC's characterisation of the Larak Island strike signals Washington intends to control the narrative around the exchange rather than let Iranian state media framing stand unanswered, which is itself a sign of how seriously both sides are treating the information dimension of this latest flare-up. For markets, the fact check adds little new operational detail but confirms the US position that its action was limited and defensive, aimed specifically at removing an imminent minelaying threat rather than opening a broader campaign, a framing that argues against expecting an immediate escalation in the scale of US strikes even after Iran's multi-province missile response. That said, the public…

Earlier:

• Reserve Bank of New Zealand Shadow Board split, most back 25bp rate hike this week
• Preview: Inflation and growth strength point to further RBNZ tightening, BNZ says
• 90% of economists expect RBNZ hike on September 2, poll shows

Data:

Business own activity Outlook 48.2%

• prior 49.3%

Business confidence 53.7%

• prior 56.1%

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The lift in reported past activity, up six points to 16 and led by services, is arguably the more market-relevant signal here than the modest pullback in headline confidence, since it points to actual momentum building rather than just sentiment. That fits with the case for the RBNZ to proceed with its expected 25 basis point hike this week, though the mixed inflation picture cuts both ways: expectations rising to 3.26…

Goldman's read pushes back against the sharpest market reaction to Warsh's Jackson Hole remarks, arguing the bar for a September hike is higher than the initial spike in rate-hike odds implied. If Hatzius is right that core CPI and PCE will print around 0.2 percent for August, that would be broadly consistent with recent trend inflation rather than the acceleration Warsh signalled he needs to see, likely disappointing traders who had pushed hike odds toward 60 percent on the speech alone. A soft outcome on the upcoming CPI and PPI releases would probably see the front end of the Treasury curve retrace some of Friday's rise and could take pressure off equities that fell on rate concerns. Conversely, any upside surprise in the inflation…

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader…

The scale of the beat on industrial output, a small monthly gain against a Reuters poll pointing to a 0.7 percent contraction, removes some of the immediate downside risk to Japan's growth outlook that markets had been pricing in going into the release. The sharp rebound in retail sales, both on the month and year-on-year, suggests consumer spending held up better than the June slump had implied, which is relevant for the Bank of Japan's ongoing debate about the durability of domestic demand as a driver of inflation. The manufacturers' survey pointing to a strong 6.4 percent output gain in August followed by a sizeable September pullback suggests some of the strength may reflect front-loading or payback dynamics rather than a clean…