Market News

• Recent PCE report didn't change modal outlook that mon pol is restrictive and will lead to gradual disinflation
• Portfolio management had an outsized influence on headline inflation, with market-based prices more in line with Fed's target
• Recent inflation data mixed with headline figure stronger but promising signs in the details
• Recent increase in bond yields not a sign inflation expectations are increasing

This is what she's been saying for awhile.

Trump says the order is effective immediately.

We live in the stupidest timeline.

• Goes into every meeting with an open mind
• Openen minded about cadence of meeting schedule
• Expects slow progress on inflation, should end year around 3%
• Fed policy needs to be restrictive
• Latest inflation data in line with expectations
• Jobs market is broadly in balance

These latest comments were on Fox Business. I wonder if tomorrow's jobs benchmark revisions -- if higher -- will push some Fed members towards tightening.

The U.S. Treasury sold $44 billion of 7 year note set a high yield of

• WI level at the time of the auction 4.512%.
• Tail 0.0 bps vs average of 0.2 basis points.
• Bid to cover 2.50X versus 6 month average of 2.49X
• Directs 27.0% vs average of 23.1%.
• Indirects 60.8% vs. average of 65.1%
• Dealers 12.3 vs average of 11.8%

Auction Grade: C

No tail.  Bid to cover near the average. The domestic buyers were more aggressive vs the international buyers.  The Dealers own slightly higher than the average.  Overall a C grade with a tilt to a bit lower but not by much.

The USDCAD bottomed last Friday at 1.37315 before gapping higher over the weekend after trade talks between the U.S. and Canada soured. The deterioration in trade relations helped fuel upside momentum, taking the pair back above the 100-hour moving average, the 200-day moving average, and the 200-hour moving average.

The advance continued yesterday, with the price also breaking above the 38.2% retracement of the decline from the July 28 high at 1.3882. The rally ultimately reached 1.38922.

Today, however, buyers could only push the price to 1.3891—just short of yesterday’s high. The failure to extend to a new high, followed by a move back below the 38.2% retracement at 1.3882, gave sellers the go-ahead to push the pair lower.

The price has…

As London and European traders head for the exits, European shares are closing mostly lower, with selling seen across most of the major markets. France’s CAC led the declines with a fall of 1.68%, while Italian, Spanish and UK shares also finished under pressure. Germany’s DAX was the lone bright spot, managing to eke out a modest gain of 0.27%.

• German DAX: +0.27%
• France’s CAC: -1.68%
• UK FTSE 100: -0.79%
• Spain’s Ibex: -0.93%
• Italy’s FTSE MIB: -1.17%

In the European debt market, benchmark 10-year yields moved mostly higher despite the weakness in equities. German and French yields led the move, rising 1.4 and 1.3 basis points, respectively. The UK was the exception, with its 10-year gilt yield falling 1.3 basis points.

• Germany: 3.251%,…

As a trader, it is important to pay attention to the nuances of price action—especially around the technical levels that traders tend to follow.

When a key level repeatedly holds as support or resistance, it tells you that traders around the world are watching it and using it to define and limit risk. It also stands to reason that if the level is eventually broken, momentum could increase in the direction of the break.

That is exactly what has developed in the NZUSD over the past day or so.

After breaking below the 100-hour moving average—the blue line on the chart—the price retested the level but could not move back above it. Sellers leaned against the moving average, using it as resistance and as a level to define and limit risk.

The…

In an uncanny coincidence, the first big named storm of the 2026 season could be Dolly. The storm has formed in the mid-Atlantic and its forecast path takes it on a dangerous trajectory towards Hispaniola, Cuba and eventually the United States.

It comes just days after the death of Dolly Parton. Note that hurricane naming conventions are selected years in advance and descend alphabetically, so it's truly a coinincide (the currently list runs out to 2031)

I think Dolly Parton would be happy if this one took a northwards turn and became a fish storm rather than a devestating hurricane but it's worth keeping an eye on.

Storm names for this…

The USDCHF broke below its 200-hour moving average at 0.80427 after sellers held resistance against the 0.8060–0.8070 swing area. The break triggered additional selling, but the decline found support at another familiar technical level: the rising 100-hour moving average, currently at 0.80291.

That mirrors yesterday’s price action. The pair also bottomed against the 100-hour moving average early in that session, prompting a rebound above the 200-hour moving average and a retest of the 0.8060–0.8070 swing area. The key difference is that the rising 100-hour moving average has moved higher—from around 0.8006 yesterday to 0.8029 today.

What’s next technically?

With the price trading between the 200-hour moving average at 0.80427 and the…

• I'm seeing more persistence in inflation
• The problem with us missing on inflation for so long is an inflationary mindset creeping in
• I don't think we're there yet on the inflation mindset but that's what I want to avoid

Hammack voted to hike rates so hawkish comments are no surprise.

The Fed's Warsh speaks tomorrow at Jackson Hole at 10 am ET.

And you thought Nvidia's move higher was impressive at 7%?  Salesforce shares are surging by 18% after the company reported better-than-expected fiscal second-quarter results, raised its full-year outlook and highlighted accelerating demand for its AI products.

• Revenue: $11.35 billion, up 11% year over year and slightly above expectations near $11.3 billion.
• Adjusted EPS: $5.90 versus $3.27 expected. However, the result included a $2.53-per-share investment gain, largely tied to Salesforce’s stake in Anthropic. Excluding that benefit, adjusted EPS was approximately $3.37.
• Current remaining performance obligations: $33.5 billion, up 14% year over year and ahead of expectations—a positive indication of future contracted revenue.
• Agentforce…

• Interest rates are not restraining the US economy
• Midterms won't affect Fed's October decision
• I don't see Fed's credibility as damaged in recent weeks
• I would probably have supported rate hike at July meeting
• Unclear what policy setting is restricting right now
• Energy shock is leaking into economy
• The Fed needs to get to 2% inflation
• There may be room to have fewer FOMC meetings

Kansas City Fed President Jeffrey Schmid maintained his hawkish stance arguing that current interest rates are not restraining economic activity and reiterating Fed's goal of returning inflation to the 2% target. 

He also noted that it's unclear what interest rate setting is need to restrain the economy enough to bring inflation back to target. He added that he would…