Market News

FUNDAMENTAL OVERVIEW

USD:

The US dollar strengthened across the board yesterday after the US PCE data. The reaction was honestly odd because literally nothing has changed. The Core figures were in line with forecasts and the market pricing held steady, with 35% chance of a rate hike in September. Therefore, I would dismiss it as just noise.

Looking ahead, the key events will be Fed Chair Warsh’s speech at the Jackson Hole Symposium tomorrow, a potential US-Iran deal in the coming days and the US CPI report on September 11.

After the Treasury buyback announcement and Bessent’s “verbal” intervention to suppress long-term yields, traders will be eager to see whether Fed Chair…

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For example, an…

There is arguably just one to take note of on the day, as highlighted in bold below.

That being for EUR/USD at the 1.1645 level. The expiries do sit near the 200-hour moving average, seen at 1.1644 currently, so they may factor into play in limiting any downside price extensions in the session ahead. That as the currency pair is moving more sideways this week in now keeping in between both the key hourly moving averages.

The price movement indicates that the near-term bias is more neutral now, with traders arguably being more guarded ahead of Fed chair Warsh's appearance in Jackson Hole tomorrow.

The 100-hour moving average, seen at 1.1670 now, is the upper limit with the lower limit outlined above. So, the expiries will add another layer to…

• September GfK consumer sentiment -26.6 vs -29.6 expected
• Prior -29.6; revised to -29.4

German consumer sentiment looks set to improve further going into September, with this being the highest reading since February (ahead of March). The good news is that income expectations have now turned positive again while economic expectations also continue to show much improvement.

Here's the more detailed breakdown:

• Economic expectations -3.9 vs -6.3 prior
• Income expectaitons 1.7 vs -14.5 prior
• Willingness to buy -9.8 vs -9.9 prior
• Willingness to save 15.5 vs 17.0 prior

NIM notes that: "Although the economic outlook in late summer is still more than six points below the corresponding level of the previous year, the fourth consecutive increase indicates a…

Gold has been looking fine since the start of the month, with a technical break above $4,200 buying a bit of breathing room for buyers. Since then, some hopeful optimism on US-Iran tensions - including that this week - is helping to afford more space on the run higher. And that even led to a further technical upshot last week from a break of the 200-day moving average (blue line).

This puts gold in a good spot even if some of that momentum has weakened this week, with traders now gearing up for a showdown with Fed chair Warsh tomorrow.

The big picture overview looks decent with buyers continuing to hold above the 200-day moving average (blue line) as well as the 38.2 Fib retracement level at $4,576. That gives some confidence to keep the…

• BOJ will look at likelihood of its scenario and risks in assessing its next steps
• That includes taking into consideration Middle East conflict, AI demand, FX impact
• Those factors will help determine pace and timing of future rate hikes
• We believe we can stabilise underlying inflation at 2% with appropriate policy moves
• We will debate at each meeting the desirable pace, timing of rate hikes to do so
• My own personal view on the economy, prices has not changed much since July meeting
• But likelihood of baseline scenario materialising may have risen somewhat since July
• Agrees with proposition that BOJ may step up rate hikes if financial conditions are too accommodative
• However, rate hike decision cannot be made solely on degree of financial…

Again, and again, and again. The poster boy of Wall Street has a knack for delivering on lofty expectations. And they did just that with their Q2 earnings report once more. There was a blip on the immediate headline but Nvidia shares surged back up in after hours, gaining by over 5% in overnight trade.

In case you missed some of the details and headlines:

• Nvidia earnings results: Revenue and EPS moderately beat but shares fall
• Nvidia's stock does the limbo then the moonwalk on 2028 guidance

The overall mood is keeping the AI rally momentum running and spilling over to other chipmakers and semiconductors too. S&P 500 futures are up 0.5% with Nasdaq futures up 0.9%. And in Asia, we're seeing the KOSPI also push higher by 1.5% with gains from SK…

• ING says Canadian dollar has further to fall on tariff chaos
• Recap: BOJ's Himino calls for 'timely' rate hikes to curb inflation
• China industrial profit growth slumps to 7-month low of 11.2%
• BOJ's Himino signals more hikes, flags growing upside inflation risk
• Australian household spending surges, builds case for RBA hike
• Oil - the report of an oil tanker attack in Hormuz says it occurred August 25
• Bank of Korea (BOK) delivers second straight rate hike, lifts benchmark to 3.00%
• BOJ hawk Himino speaks soon ahead of key September meeting
• PBOC sets USD/ CNY reference rate for today at 6.7840 (vs. estimate at 6.7261)
• Kansas City Fed hawk Schmid set for high profile Fox Business interview
• Bank consensus builds for near term RBA hike as economists cite…

ING's call sets up a bearish CAD view even after a period of relative currency resilience, arguing that markets are still applying a 2025 style playbook that assumes escalation gives way to negotiation and fades the initial FX reaction. That framework has kept CAD's underperformance against G10 peers contained to around half a percentage point once the broader dollar move is stripped out, and has kept hedging costs muted relative to when the trade dispute first flared in December 2024. ING's view diverges from that complacency, pointing to dovish Bank of Canada repricing and a rising tariff risk premium as reasons CAD should underperform peers such as AUD and NOK by a meaningful margin. The near term path for USD/CAD still points higher…

Himino's direct call for "timely" rate hikes, delivered in his own words rather than through analyst interpretation, sharpens the hawkish read markets had already been building around this speech. His framing of the choice as timely, gradual tightening versus a future spike requiring abrupt hikes gives the BOJ a clear rationale for moving sooner rather than later, and reinforces September as a live meeting. The explicit flag on yen weakness as an accelerant to inflation keeps FX front and centre in the BOJ's reaction function, with any further yen softness now more directly linked to hike risk. Combined with his comment that policy should distribute capital more efficiently toward growth investment, the remarks read as a comprehensive…

The slowdown to an 11.2% annual pace, well below the 18.7% clip logged in the first half, will raise questions over whether the AI-driven turnaround in Chinese industrial profitability is starting to fade rather than merely normalizing off a strong base. Traders positioned for continued strength in China-exposed cyclicals and commodity demand may reassess given the clear deceleration trend across both the July print and the seven-month cumulative figure. The data adds to a broader mosaic of Chinese economic indicators markets are using to gauge the durability of the recovery from the 2021 to 2024 profit downturn, particularly given how central the AI and electronics manufacturing boost has been to this year's rebound. A continuation of…

The household spending beat is likely to firm up market pricing for an RBA rate hike, with the acceleration in annual growth to 7.0% suggesting consumer demand is running hotter than the central bank's forecasts had assumed. A move of this size relative to the 0.4% consensus is the kind of surprise that typically pulls forward rate expectations and lends support to the Australian dollar. That said, the same day's private capital expenditure data complicates a purely hawkish read, with the 3.6% quarterly contraction pointing to real weakness in business investment even as households keep spending. Traders will likely weigh the two releases together rather than trading off the spending number in isolation, since a hike delivered against a…