Market News

Westpac's call puts it at odds with banks that have already shifted to a September or November hike, framing the July inflation beat as noisy rather than a genuine signal of reacceleration. The bank's focus on softer labour market and wage outcomes as the key offsetting factor suggests it sees the RBA weighting employment data more heavily than the headline CPI surprise in the lead up to the next meeting. By pointing to stable housing cost inflation and constrained developer pricing power, Westpac is effectively arguing the hottest components of the July print, durable goods and discretionary services, reflect one-off timing quirks rather than broad-based price pressure. A continued hold call from a major bank should temper some of the…

Nvidia's results underline how sensitive the stock has become to the gap between beating expectations and beating already sky-high ones, with an initial drop reflecting investor disappointment even after a solid quarter. The reversal came once management put concrete numbers behind the AI demand narrative, an unusually early and specific full-year guide that markets read as a strong signal of confidence. The suggestion that supply constraints, not demand, are the binding factor on growth points to continued tightness across the AI chip supply chain, with implications for suppliers and customers alike. The swing from a 3% loss to a 5% gain in the same after-hours session shows how quickly sentiment can turn on forward-looking commentary…

UBS is treating dollar weakness as a structural theme rather than a short-term wobble, which points to sustained flows into gold, commodities and selected currencies rather than a quick reversal. Its emphasis on central bank reserve diversification, highlighted by another large gold purchase from the People's Bank of China, suggests official sector demand could keep providing a floor under bullion even if speculative positioning turns. The bank's preference for the pound, Norwegian krone, New Zealand dollar and yuan over broad dollar shorts points to a more selective approach to the trade rather than a blanket bet against the greenback. Near-term, UBS flags Middle East tensions and higher oil prices as a potential offsetting support for…

Markets have been left to parse Warsh's tone rather than his words, and bond pricing shows the strain of that ambiguity. Short-term yields fell after his last press conference, while the 30-year Treasury yield climbed to its highest level since 2007 and the average 30-year mortgage rate rose to around 6.75%, its highest point this year. That divergence points to investors suspecting the Fed may tolerate somewhat higher inflation in the near term at the cost of larger rate increases later. With three officials already voting to raise rates last month and others reportedly open to joining them, any hint of Warsh's own lean at Jackson Hole could quickly move rate expectations and yields across the curve.

But will we get views from him? I…

UBS is using the recent tech drawdown to reinforce its bullish AI thesis rather than retreat from it, framing the sell-off as a valuation reset rather than a demand problem. The bank's emphasis on token consumption and hyperscaler cloud growth points to where investors should look for confirmation that AI spending is being monetised. Semiconductor valuations compressing to around 22 times forward earnings, below their post-ChatGPT average, gives UBS scope to argue the risk reward has improved even as long-dated Treasury yields and AI financing concerns keep sentiment fragile. The call to diversify into defensive tech, such as payment networks and data centre REITs, signals UBS sees near-term volatility persisting even as its medium-term…

Both the EURUSD and GBPUSD moved lower today, but the selling was more pronounced in the GBPUSD. The pair is down 0.43%, compared with a decline of about 0.21% for the EURUSD. That relative weakness has also given the GBPUSD a more bearish technical tilt as the trading day winds down.

In the video above, I examine both major currency pairs and outline the technical bias for each, along with the key risk-defining levels and the targets traders should be watching as a new trading day begins.

Be aware. Be prepared.

Closing changes:

• S&P 500 +0.1%
• Nasdaq Comp -0.1%
• Russell 2000 -0.1%

Let's see where NVDA takes us at 4:20 pm ET but so far we've seen big gains from Salesforce and CrowdStrike after hours.

• US stock markets close near flat ahead of Nvidia earnings
• Bill Gates undermines everything the AI leaders have been saying
• Crude oil futures settle little changed at $82.23
• The $4 trillion question: Can the hyperscalers' enormous bet on data centers pay off
• US treasury sells $70 billion of 5 year notes at a high yield of 4.393%
• Dallas Fed Trimmed Mean +2.2% versus 1.5% last month
• Major European indices closed mostly higher with the UK FTSE 100 the exception
• Putin said to plan Ukraine escalation after seeing talks as fruitless
• EIA weekly US crude oil inventories +95K vs +597K expected
• The Canadian consumer isn't cracking yet, but the momentum is fading
• US July durable goods orders +1.1% vs +0.5% expected
• US GDP 2nd estimate for Q2 1.5% vs 1.5%…

Earnings headlines:

• Revenue of $96.2
• Gross margin 75% but sees 74.0% next quarter
• EPS $2.22
• Q3 seen at $108B
• Vera Rubin is in full production
• Huang says "compute is revenue"
• Nvidia says not assuming any data center compute revenue from China in its outlook
• Will pay a dividend of $0.25 per share on Oct 1
• NVDA outgoing spending commitments up to $279B from $119B, primarily in memory

Shares are down 3.5% in the initial reaction to $205 per share.

Here is what was expected for Nvidia:

• Q2 revenue estimtes were $91.9B to $92.3B and. Nvidia's guided range was $91.0B
• Q3 revenue guidance: Wall Street baseline expectations sit at $103B to $104B+ (some talk of even $109B)
• Q2 EPS consensus: $2.08 to $2.09 per share
• Gross margins projected to hold in the mid-70%…

Crude prices traded choppily through the session as traders weighed conflicting signals from the Middle East and Russia against a softer than expected build in US inventories. Sentiment shifted through the day, with talk of progress on a Strait of Hormuz arrangement pulling prices lower before reports of stalled Ukraine peace efforts and possible fresh Russian strikes helped both benchmarks pare losses. Vessel transit data through the strait remains well below pre-war levels, a reminder that any easing of the geopolitical premium is not yet reflected in actual shipping flows. With the smaller than anticipated crude build alongside larger draws in gasoline and distillates, the market is still finding some support from the demand side even…

I popped up a preview of the BoK earlier this week:

• Bank of Korea rate call a coin toss as economists split on August hike

From the RBA we get the 'Bulletin'. The RBA Bulletin is the Reserve Bank's quarterly publication analysing economic and financial developments, alongside pieces on the RBA's own history and operations. It's a companion to the Statement on Monetary Policy, which is the quarterly assessment underpinning rate decisions. Long-running (dating to 1937), it's more explainer/research than market-moving.

Yesterday, I wrote about how AI leaders can't be trusted to tell us the truth about what's coming. I lamented that they've suddenly switched their stance on AI job losses at exactly the same time that they need to raise trillions and get government backing for huge infrastructure projects. That's not a coincidence.

Today, that view got a powerful endorsement from Bill Gates. The Microsoft founder remains among the richest people int he world but now owns very little of the shares as he's steadily sold and donated stock.

Today, he published a crucial essay to raise alarm bells about the lack of preparation and the scale of disruption that's coming.

"I don’t see evidence that leaders, experts, and communities are confronting the challenges…