Market News

• Prior -0.2%
• GDP Y/Y +0.5% vs +0.7 expected
• Prior +0.9%

• Prior +2.1%
• HICP +2.7% vs +2.6% y/y expected
• Prior +2.4%

French inflation picked up in August with stronger energy prices offsetting softer pressures from the services sector. The acceleration was primarily driven by energy costs, particularly petroleum products, which increased at a faster pace than in the previous month.

Food prices also contributed modestly to the uptick in inflation, while the decline in manufactured goods prices continued to ease. Meanwhile, services inflation softened slightly, helping to limit the overall increase in consumer prices. Tobacco prices rose at the same annual pace as in July.

On a monthly basis, the CPI is expected to increase 0.7% in August, following a 0.6% rise in July. The gain was largely driven by a…

• Germany July import prices +0.2% m/m
• Prior -0.7%
• Germany July import prices +6.8% y/y
• Prior +6.1%

Import prices in Germany continue to pick up, with the annual estimate now rising to 6.8%. The main culprit continues to be energy prices, which has surged higher compared to last year due to the US-Iran conflict. But even so, we are seeing spillover impact to the likes of raw materials and metals. So, that is also raising overall import prices compared to a year ago.

Even if excluding energy prices, German import prices in July this year are still seen up 4.8% compared to July last year. And on the month itself, import prices are up 0.1% in July compared to June after excluding energy prices.

For some context, import prices for energy are up 26.4%…

There are a couple of expiries to take note of on the day, as highlighted in bold below.

The first being for EUR/USD at the 1.1650 level. The expiries sit around the confluence of the key hourly moving averages, seen at 1.1652-60 currently. As such, it might offer a bit of a pull in keeping price action more sticky before we get to the main event later today.

All eyes are on Fed chair Warsh's keynote speech in Jackson Hole. And until we get to that, traders might lack any real conviction to go running in the sesion ahead.

There will be French and Spanish CPI data for August to contend with. But with traders already well expecting the ECB to move in September (~95% odds), even hotter data there will do little to bring the euro to life.

To the…

The note from Credit Agricole here is in direct contrast to what BofA's month-end fixing model is arguing. From earlier: Month-end fixing to be mildly supportive of the dollar - BofA

Based on their own month-end rebalancing model, Credit Agricole says that some light selling in the dollar is more likely to materialise this month-end instead.

"Global equity markets were broadly firmer in August. In FX, the USD was broadly weaker on the month. Overall, the moves in equity markets, when adjusted for market capitalisation and FX performance this month, suggest month-end portfolio-rebalancing flows are likely to be mild USD selling across the board with the strongest sell signal in the case of the USD vs the JPY."

So, what can we extrapolate from…

That figure is down from 17 vessels on Wednesday and falls below the 10-day average of around 15 vessels.

According to initial data from Kpler, the seven vessels that transited were two medium-range ​tankers, one very large gas carrier (VLGC), one Ultramax ​vessel, one intermediate tanker, and two chemical tankers. Of which, four vessels were seen exiting the strait with the others entering.

Despite talks and murmurs of reopening the Strait of Hormuz still, the numbers on the ground - or should I say water - continue to point to heavy disruption.

Sure, the US is still managing some backdoor efforts to get oil through the waterway and out of the region. But the fact of the matter is that the longer this continues, the bigger the chances are…

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• Here's the full agenda for the Jackson Hole Fed symposium
• Tokyo inflation data strengthens case for September BOJ hike
• UK business confidence rises to five-month…

BofA notes that their month-end rebalancing model is pointing to outflows in EUR/USD and GBP/USD into the month's fix. The firm says that:

"We estimate FX rebalancing needs based on a conventional 60/40 portfolio of global equities & bonds. The underperformance of USD vs GBP & EUR denominated assets over August suggests rebalancing out of GBP (-1.3σ) and EUR (-0.6σ) and into USD."

It's not much but perhaps we've seen some signs of that already during the week. Both EUR/USD and GBP/USD are sitting lower this week, owing mostly to a drop on Wednesday during midday in Europe but that also comes after a mix of US data. The former is down by 0.3% so far this week with the latter down 0.4%.

The changes so far today are relatively light but keep…

With 27 of 31 economists expecting a September hike, the move itself carries little surprise value, keeping focus on the pace and scale of further tightening. The wide dispersion in end-2027 forecasts, ranging from 2.50% to 4.00%, points to genuine uncertainty over how far this cycle ultimately runs, with Westpac and BNZ at the hawkish end anticipating 4.00% against ANZ's more moderate 3.00% call. A softer than expected housing market, with prices seen broadly flat this year, may offer some counterweight to inflation concerns, but signs of economic recovery, including expected growth resuming this quarter, give the RBNZ room to continue tightening without an immediate growth constraint.

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Earlier:

• Preview: Inflation and growth strength…

If Morgan Stanley's read proves correct, traders hoping for explicit signals on a September move or the year end rate path may come away disappointed, reducing the odds of a sharp directional repricing immediately following the speech. Instead, market attention may shift toward parsing Warsh's tone on the five working group areas, balance sheet policy, the inflation framework, Fed communications, AI and productivity, and data quality, for longer-term clues about how he intends to reshape the institution. A speech focused on strategic direction rather than short-term guidance could leave near-term rate pricing largely anchored to incoming data releases rather than the keynote itself.

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Yeah, Morgan Stanley's preview makes sense to me.…

The yen's slide back toward 160 per dollar, despite last month's coordinated intervention, keeps currency markets alert to any signal that Tokyo and Washington could act again. Katayama's comment that the joint statement with Bessent "still lives" suggests officials want to keep the intervention threat credible without committing to fresh action, a stance markets will test if the yen weakens further. Whether Katayama and Bessent hold a bilateral meeting in Asheville will be closely watched as a proxy for how seriously either side is treating renewed yen weakness, with Ueda's possible attendance adding another channel through which BOJ policy signals could emerge.

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Earlier:

• US to press G20 on growth, imbalances and Iran sanctions at…

The infrastructure push signals a more coordinated push to translate policy support into actual project starts, with the focus on compute, power grid and telecom integration pointing to continued state backing for AI and digital infrastructure buildout. Combined with steady service trade momentum, particularly in digital and high value services, the announcements suggest Beijing is leaning on both domestic investment and external demand to support growth in the second half. The scale and pace of the six-network rollout will be the key signal for markets to watch, given the emphasis on private investment participation and diversified financing models.

Take note:

The Australian dollar is widely treated by markets as a liquid proxy for China…