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NZ services PMI slumps to 47.5, 18th month contraction

    By
    ActionForex
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    New Zealand’s services sector deteriorated further in August, with BusinessNZ Performance of Services Index slipping from 48.9 to 47.5, well below the long-run average of 52.9. The reading also marks the 18th consecutive month of contraction. Both

    Activity/Sales (46.2) and New Orders/Business (47.8) weakened, suggesting demand remains fragile. Employment improved slightly to 48.3 but remains in contraction territory, reflecting businesses’ reluctance to expand payrolls in the face of subdued activity.

    The survey showed 59.6% of respondents made negative comments in August, an increase from July but still less pessimistic than June’s tally. Firms cited multiple pressures, including high interest rates, sticky inflation, and the cost-of-living squeeze eroding household spending. Rising operating costs, seasonal slowdowns, supply chain disruptions, and uncertainty over government policy also weighed on sentiment.

    Full NZ BNZ PSI release here.

    US UoM confidence falls to 55.4, long-term inflation expectation rises

      By
      ActionForex
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      U.S. consumer confidence weakened in September, with the University of Michigan index falling to 55.4 from 58.2 in August. The Current Economic Conditions index edged down to 61.2 from 61.7, while the Expectations index slumped to 51.8 from 55.9.

      On inflation, short-term expectations were unchanged at 4.8% for the year ahead, but long-term expectations ticked up again to 3.9%. The back-to-back rise in long-run expectations signals lingering concern among households that price pressures may prove persistent.

      The UoM noted that consumers continue to flag multiple vulnerabilities across the economy, including business conditions, labor markets, and inflation.

      Full UoM consumer sentiment release here.

      UK inflation expectations rise, BoE survey shows

        By
        ActionForex
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        The BoE/Ipsos Inflation Attitudes Survey showed UK households nudging inflation expectations higher. Median expectations for inflation over the next year rose to 3.6% from 3.2% in May, while two-year expectations climbed to 3.4% from 3.2%. Longer-term inflation expectations, five years out, also ticked up to 3.8% from 3.6%.

        Concerns over rising prices were tied to broader pessimism about growth. By a margin of 69% to 6%, respondents said the economy would end up weaker rather than stronger if inflation accelerated, compared with 67% to 5% in May.

        On the interest rate outlook, 33% of respondents expected rates to rise over the next 12 months, unchanged from May. But more people now expect stability, with 26% seeing no change versus 21% in May. The share expecting cuts fell to 29% from 34%, suggesting households are adjusting to the prospect of “higher for longer” rates.

        When asked what would be best for the economy, 33% favored lower rates, down from 37% in May. Meanwhile, 28% preferred no change, up from 26%, and 14% wanted higher rates, up slightly from 12%. The responses suggest growing acceptance that policy will remain restrictive even as concerns about inflation remain elevated.

        ECB officials stress uncertainty, keep options open after rate hold

          By
          ActionForex
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          Several ECB policymakers weighed in after the Governing Council held deposit rate steady at 2.00% yesterday.

          Latvian member Martins Kazaks argued the central bank should not provide forward guidance given high geopolitical and economic uncertainty. He said December’s meeting will be crucial, as new staff forecasts will help determine whether inflation is deviating from target in a significant or persistent way.

          Kazaks also flagged external factors, including the Euro’s strength— which can suppress import prices— and potentially deflationary Chinese exports as downside risks. “Uncertainty is high,” he said, adding this justifies a cautious, meeting-by-meeting policy stance.

          Olli Rehn of Finland struck a similar note, warning about the disinflationary impact of cheaper energy and a stronger currency. He stressed the importance of avoiding inflation moving “too much below or too much above” the 2% objective,.

          France’s Francois Villeroy de Galhau left the door open to further easing, saying “another rate cut is entirely possible” in coming meetings.

          UK GDP stalls in July, services offset weak production

            By
            ActionForex
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            UK GDP was flat in July, matching expectations, as modest growth in services and construction offset a sharp drop in production. Services output rose 0.1% and construction gained 0.2%, while production fell -0.9%, highlighting ongoing weakness in the industrial sector.

            Over the three months to July, GDP rose 0.2% compared with the previous three-month period. Services expanded 0.4% and remained the key driver of growth, while production fell -1.3% and construction rose 0.6%.

            Full UK monthly GDP release here.

            NZ BNZ manufacturing slips to 49.9, sector weakness persists, optimism patchy

              By
              ActionForex
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              The latest BusinessNZ PMI showed New Zealand’s manufacturing sector stalling in August, with the index slipping to 49.9 from 52.8. BusinessNZ’s Catherine Beard noted the industry “has yet to turn the corner toward sustained growth,” with the reading underscoring patchy conditions and fragile confidence despite being only marginally below the neutral threshold.

              The breakdown highlighted a mixed picture. New Orders rose strongly to 55.2, the highest in two years, hinting at improving demand momentum, while raw material deliveries remained in expansion at 50.5. Offsetting this, production fell to 46.6, while employment (49.1) and finished stocks (47.1) also contracted, dragging the overall index lower.

              Nearly six in ten respondents offered negative comments, citing flat sales, customer caution, rising costs, and global uncertainty as key drags. Although the proportion of negative feedback has eased from June’s high, sentiment remains weak, and businesses see recovery as tentative at best.

              Full NZ BNZ PMI release here.

              US initial jobless claims spike to 263k, highest since 2021

                By
                ActionForex
                -

                U.S. initial jobless claims surged by 27k to 263k in the week ending September 6, well above expectations of 240k and marking the highest level since October 2021. The four-week moving average rose 10k to 241k, pointing to a clear softening trend in labor market conditions.

                Continuing claims were steady at 1.939 million for the week ending August 30, with the four-week average slipping slightly to 1.936 million. Still, the rise in new claims highlights a labor market that is starting to cool more decisively, adding pressure on the Fed as it weighs the pace of policy easing.

                Full US jobless claims release here.

                US CPI rises to 2.9% in August, core CPI unchanged at 3.1%

                  By
                  ActionForex
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                  U.S. consumer prices rose more than expected on the month in August, with CPI up 0.4% mom versus forecasts of 0.3% mom. Core CPI rose 0.3% mom, matching expectations. Shelter costs climbed 0.4% mom and were the largest contributor to the monthly increase, while food prices rose 0.5% mom and energy gained 0.7% mom.

                  On a year-over-year basis, headline CPI accelerated to 2.9% from 2.7% in July, in line with forecasts. Core inflation held steady at 3.1%, also as expected. The data show underlying price pressures remain stable even as headline measures edge higher. Food inflation rose 3.2% over the past year, while energy prices were up a modest 0.2%. Overall, the report points to steady but not accelerating inflation.

                  Full US CPI release here.

                  ECB holds at 2.00% Again, upgrades 2025 growth outlook

                    By
                    ActionForex
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                    The ECB left its deposit rate unchanged at 2.00% as widely expected, marking a second consecutive hold. The Governing Council reiterated its commitment to stabilizing inflation at 2% over the medium term and stressed a “data-dependent and meeting-by-meeting” approach. Policymakers emphasized they are “not pre-committing to a particular rate path”, leaving flexibility to respond to incoming data.

                    Fresh staff projections showed little change from June, with headline inflation expected to average 2.1% (prior 2.0%) in 2025, 1.7% (1.6) in 2026, and 1.9% (2.0%) in 2027.

                    Core inflation, excluding food and energy, is projected at 2.4% in 2025 before easing to 1.9% in 2026 and 1.8% in 2027. The figures reinforce the view that price pressures are gradually converging toward target.

                    On growth, the ECB revised up its 2025 forecast to 1.2% from 0.9%, but cut its 2026 estimate slightly to 1.0% (prior 1.1%). The 2027 projection was left unchanged at 1.3%.

                    Full ECB statement here.

                    EUR/USD awaits twin catalysts: ECB pause, U.S. CPI test

                      By
                      ActionForex
                      -

                      EUR/USD is holding near its highest levels since 2021 as traders await two pivotal events today: ECB policy decision and U.S. CPI data.

                      The ECB is set to hold its deposit rate at 2.00%, marking a second consecutive pause. Investors will be listening closely for any hint from President Christine Lagarde that policymakers are ready to park rates for the long haul.

                      The U.S.-EU trade agreement, which capped tariffs at 15%, has given the central bank more breathing space. If updated projections show limited fallout from tariffs and the Governing Council signals satisfaction with the current stance, Euro could draw support from the perception that the easing cycle is finished.

                      On the U.S. side, August CPI is expected to show headline inflation rising to 2.9% from 2.7%, with core CPI steady at 3.1%. The report is the final major data input before next week’s FOMC, where markets see a 25bps cut as the base case.

                      Political noise around the Fed has grown louder. After weaker-than-expected PPI figures yesterday, US President Donald Trump again lashed out at Chair Jerome Powell, calling him a “total disaster” and demanding immediate deep cuts.

                      Markets currently expect a series of back-to-back 25bps cuts in September, October, and December, bringing rates down to 3.50–3.75% by year-end. A downside surprise in CPI would reinforce that view and might even revive discussion of a larger move in September.

                      Technically, for EUR/USD, further rise is expected as long as 1.1607 support holds. Firm break of 1.1829 will resume larger up trend to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. Then EUR/USD will face the real test at 1.2 psychological level.

                      Meanwhile, break of 1.1607 will delay the bullish case, and extend the corrective pattern from 1.1829 with another dip back towards 1.1390 support in the near term.

                      Japan CGPI accelerates to 2.7% yoy, import price declines ease

                        By
                        ActionForex
                        -

                        Japan’s producer prices rose modestly in August, with CGPI climbing 2.7% yoy from 2.5% yoy in July, matching market forecasts. The pickup was driven mainly by food and beverage costs, which rose 5.0% yoy versus 4.7% yoy previously. In contrast, utility bills fell -2.9% yoy due to government subsidies, softening the overall inflation impact.

                        Import price declines eased significantly in the past two months, with yen-based import prices down -3.9% yoy compared with a revised -10.3% fall in July. The data suggest external cost pressures are stabilizing, even as domestic food inflation remains sticky.

                        RBNZ’s Hawkesby: OCR seen at 2.5% by year-end, data dependent

                          By
                          ActionForex
                          -

                          RBNZ Governor Christian Hawkesby said today the central bank still projects the Official Cash Rate to fall to around 2.50% by year-end, down from current 3.00%. Though, the pace could be “faster or slower” depending on incoming data. He emphasized that the path of policy easing will hinge on the “speed of New Zealand’s economic recovery”.

                          Hawkesby noted the August Monetary Policy Statement highlighted the sharp blow to household and business confidence, with the economy stalling mid-year and creating more slack. He attributed much of the “confidence shock” to uncertainty over U.S. tariff policies, compounded by cost-of-living pressures and a weak housing market.

                          Still, leading indicators for July were “better” and aligned with the RBNZ’s outlook for a rebound in the second half of the year. Hawkesby said policymakers will keep monitoring spillovers from U.S. tariffs on both global growth and New Zealand firms. The RBNZ resumed rate cuts last month after a July pause.

                          U.S. PPI falls -0.1% mom in August, annual rate cools to 2.6% yoy

                            By
                            ActionForex
                            -

                            U.S. producer prices unexpectedly fell in August, with PPI slipping -0.1% mom versus expectations of a 0.3% mom gain. The decline was driven by a -0.2% mom drop in final demand services, while goods prices edged higher by 0.1% mom.

                            On a year-over-year basis, PPI slowed sharply to 2.6% yoy from yoy 3.3% in July, undershooting forecasts of 3.3% yoy and signaling easing price pressures at the factory gate. The slowdown will be welcomed by markets seeking evidence that inflationary pressures are moderating.

                            However, underlying measures stayed firmer. Core PPI, excluding food, energy, and trade services, rose 0.3% mom, a fourth straight month of increase, leaving the annual rate at 2.8% yoy — the fastest since March.

                            Full US PPI release here.

                            Aussie Strength Builds in Crosses as China CPI Opens Door to Stimulus

                              By
                              ActionForex
                              -

                              Australian Dollar jumped further today, particularly in cross rates, as risk appetite in China improved. The move was fueled by gains in Chinese equities after inflation data suggested room for further stimulus, with Hong Kong’s Hang Seng Index climbing to a four-year high.

                              The -0.4% yoy decline in China’s highlighted weak domestic demand and strengthened the case for the PBoC to cut borrowing costs. Producer prices also stayed in deflation, highlighting the pressures on manufacturers. More importantly, the Fed’s shift toward easing to reduce pressure on Yuan exchange rate, giving the PBoC greater latitude to stimulate without sparking destabilizing outflows.

                              Technically, Hong Kong’s HSI remains in a steady uptrend, with D MACD showing signs of momentum returning. For now, outlook will stay bullish as long as 25013.26 support holds. Current up trend should be on track to 161.8% projection of 14597.31 to 22770.85 from 14794.16 at 27905.69, which is close to 28000 psychological level.

                              AUD/JPY is now pressing 97.41 key resistance. Further rise is expected as long as 96.29 support holds. Sustained trading above 97.41 will pave the way to 38.2% projection of 86.03 to 97.41 from 94.38 at 98.72, and then 61.8% projection at 101.41.

                              AUD/CAD’s rally continues today and broke through 0.9218 structural resistance. Current up trend should target 61.8% projection of 0.8440 to 0.9041 from 0.8902 at 0.9273.

                              GBP/AUD also edges lower today and near term outlook remains bearish for 61.8% projection of 2.1643 to 2.0478 from 2.1003 at 2.0283 next.

                              China CPI falls -0.4% yoy, core inflation hits 2-1/2 year high

                                By
                                ActionForex
                                -

                                China’s consumer prices slipped deeper into deflation in August, with CPI down -0.4% yoy after July’s flat reading, worse than expectations of -0.2% yoy and the weakest in six months. Food prices were the main drag, falling -4.3% yoy versus -1.6% yoy previously. On a monthly basis, CPI was unchanged, undershooting forecasts for a small 0.1% mom rise.

                                At the same time, core inflation showed signs of life, rising 0.9% yoy in August compared with 0.8% yoyin July — the fastest pace in two and a half years. The pickup suggests underlying demand in services and other non-food sectors is holding up better than headline numbers imply, even as consumers face falling food costs.

                                Producer prices continued to contract, though at a slower pace. PPI dropped -2.9% yoy, in line with expectations and an improvement from -3.6% yoy in July. The figures highlight China’s ongoing struggle with persistent factory-gate deflation, which has now lasted nearly three years.

                                Gold rally may stretch to 3765 if US 10-year yield breaks 4%

                                  By
                                  ActionForex
                                  -

                                  The benchmark U.S. 10-year yield extended its recent slide on Monday, dropping to a five-month low. At the same time, Gold surged to another record high, reflecting strong demand for safety and conviction that inflation data due this week could steer the Fed toward faster easing.

                                  Markets are squarely focused on the August PPI release on Wednesday, followed by Thursday’s CPI, which will be critical in shaping expectations ahead of next week’s FOMC meeting. Any evidence of cooling inflation risks could soften Fed hawks’ resistance to faster rate cuts. While a 50bps move in September remains unlikely, the statement and dot plot could flag a steeper path of easing.

                                  That possibility is keeping pressure on U.S. yields. Key attention is on the 4% mark for the 10-year yield. A clean break below this psychological level could spur an even deeper slide

                                  Technically, 10-year has already broken through 100% projection of 4.629 to 4.205 from 4.493 at 4.069, with no sign of bottoming yet. It is also pressing against the lower bound of its near-term falling channel. Sustained break there will indicate further acceleration to 138.2% projection at 3.907 next, with prospect of diving to 3.886 support. In any case, outlook will stay bearish as long as 4.188 support turned resistance holds.

                                  Gold, meanwhile, remains in a phase of upward re-acceleration, as indicated by 4H MACD. It’s on track to 261.8% projection of 3267.90 to 3408.21 from 3311.30 at 3678.63. Overbought condition as seen in 4H RSI could limit upside there on first attempt. But break of 3579.44 support is needed to indicate temporary topping first.

                                  Meanwhile, if the 10-year yield breaks below 4% in the coming days, Gold’s rally could extend further, eyeing 323.6% projection at 3765.34 before a peak is established. For now, both Treasuries and bullion look unstoppable, with inflation data set to determine the next leg of momentum.

                                  Australia NAB business survey: Confidence falls, costs ease, capacity still tight

                                    By
                                    ActionForex
                                    -

                                    Australia’s NAB Business Confidence index slipped from 8 to 4 in August, but conditions showed improvement, rising from 5 to 7. Trading remained steady at 12, while profitability rose from 2 to 4 and employment from 2 to 5. NAB Chief Economist Sally Auld said the results support the view that “the outlook for businesses continues to improve,” with both confidence and conditions now near long-run averages.

                                    Capacity utilisation rose to 83.1% from 82.5%, staying two percentage points above its long-run norm. Capital expenditure intentions also improved, climbing from 8 to 10. Together, these suggest firms are still operating at high levels of resource use despite broader uncertainties.

                                    At the same time, cost pressures eased further. Purchase cost growth slowed from 1.3% to 1.1%, its lowest since 2021, while labour costs moderated to from 1.9% 1.5% and product price growth dipped to from 0.8% 0.6%. The survey points to an environment of resilient business activity and capacity tightness, but with inflation pressures continuing to recede.

                                    Full Australia NAB Monthly Business Survey release here.

                                    Westpac: Australia consumer optimism elusive, RBA to pause in September

                                      By
                                      ActionForex
                                      -

                                      Australia’s Westpac Consumer Sentiment Index dropped -3.1% mom to 95.4 in September, reversing part of last month’s boost from the RBA’s third rate cut. While sentiment remains modestly above July levels and well above the April tariff-driven low, the index has slipped back into “cautiously pessimistic” territory. Westpac said outright optimism remains “elusive”, with households still uneasy about the path ahead despite relief from the cost-of-living crisis.

                                      The RBA is expected to keep its cash rate steady at 3.6% when it meets later this month. Westpac noted recent data on inflation and demand came in “somewhat firmer than expected”, reinforcing the case for caution. Policymakers are seen waiting for further confirmation that underlying trends remain benign before resuming cuts.

                                      For now, consumer recovery looks sluggish, and Westpac expects “further easing will likely be needed” to sustain momentum. It forecasts another 25bp cut in November and two additional moves in 2026, underscoring the gradual path ahead for both sentiment and policy.

                                      Full Australia Westpac consumer sentiment release here.

                                      Aussie strength meets Loonie weakness, AUD/CAD targets 0.9128 and above

                                        By
                                        ActionForex
                                        -

                                        AUD/CAD resumed its rally from 0.8440 last week, breaking decisively through 0.9041 resistance level. The move reflects diverging fundamentals between Canadian Dollar, which is weighed down by weak domestic data, and Australian Dollar, which is drawing support from stronger consumption and external demand.

                                        For loonie, the trigger was August’s disappointing jobs report, which reignited expectations that the BoC will resume easing at its September 17 meeting. While markets have not fully priced a rate cut yet, sentiment is shifting toward renewed stimulus. Still, policymakers are likely to wait for the August CPI release on September 16 before making the final call.

                                        Underlying inflation dynamics remain sticky, with CPI common holding at 2.6% yoy for a third consecutive month in July. That has kept some uncertainty in market pricing. But once tariff-driven price pressures ease, the BoC will have scope to bring rates down from the current 2.75% to around 2.00%.

                                        In contrast, the RBA’s easing path looks less certain. Strong consumption data prompted Governor Michele Bullock to caution that fewer cuts may ultimately be delivered. The Australian Dollar has also found support from a sharp rally in Chinese equities, which has helped stabilize sentiment around regional growth prospects.

                                        Technically, AUD/CAD’s rise from 0.8440 should be reversing the whole downtrend from 0.8375. Further rise is expected as long as 0.8992 support holds, to 0.9128 structural resistance first. Firm break there will pave the way to 61.8% projection of 0.8440 to 0.9041 from 0.8902 at 0.9273.

                                        Eurozone Sentix confidence sinks to five-month low, summer optimism disintegrating at rapid pace

                                          By
                                          ActionForex
                                          -

                                          Eurozone investor sentiment deteriorated sharply in September, with the Sentix Confidence Index falling from -3.7 to -9.2, well below expectations of -1.1 and the weakest since April. Current Situation Index weakened to -18.8 from -13.0, while Expectations tumbled to 0.8 from 6.0.

                                          Germany was the clear weak spot. Its investor confidence plunged from -12.8 to -22.1, while Current Situation gauge collapsed from -29.0 to -39.0. Expectations turned negative again, falling from 5.0 to -3.5, highlighting growing pessimism about Europe’s largest economy emerging from recession.

                                          Sentix attributed the downturn to a mix of political and external headwinds: government instability in France, persistent weakness in German industry, an unfavorable tariffs arrangement with the US, and the ongoing war in Ukraine. These factors, it said, are exerting an “oppressive effect” on Eurozone sentiment.

                                          The institute warned that summer optimism has “disintegrated at a rapid pace” and sees little sign of an autumn rebound. With export-oriented sectors facing more pressure under U.S. tariffs and rising concern over sovereign debt — particularly in France — the outlook for the Eurozone remains fragile heading into year-end.

                                          Full Eurozone Sentix Investor Confidence release here.

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