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Daily Pivots: (S1) 147.61; (P) 148.38; (R1) 148.87; More...

USD/JPY retreated notably after brief rise to 149.12 and intraday bias is turned neutral first. On the upside, above 149.12 will resume the rebound from 146.20 to retest 150.90 high. Break there will resume the rise from 139.87 to 151.22 fibonacci level. However, on the downside, break of 146.65 support will resume the decline from 150.90 through 146.20 instead.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 0.8025; (P) 0.8046; (R1) 0.8066; More….

Intraday bias in USD/CHF remains neutral and outlook is unchanged. On the downside, break of 0.7984 will resume the fall from 0.8170 to 0.7910 support first, and then retest of 0.7871 low. However, break of 0.8103 resistance will turn bias to the upside to resume the rebound from 0.7871 through 0.8170.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Daily Pivots: (S1) 0.6512; (P) 0.6533; (R1) 0.6564; More...

AUD/USD rebounded strongly after dipping to 0.6482, but upside is limited below 0.6559 resistance. Intraday bias is turned neutral first. Overall, corrective pattern from 0.6624 could still extend further. Below 0.6482 will turn bias to the downside for 0.6413 support and possibly below. On the upside, though, firm break of 0.6567 should indicate that the corrective pattern has completed and larger rally is ready to resume through 0.6624.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. While stronger rally cannot be ruled out, outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, even in case of another fall through 0.5913, downside should be contained above 0.5506 (2020 low).

Swiss consumer prices slipped in August, with headline CPI falling -0.1% mom, below expectations for a flat reading. Core CPI, which excludes fresh products and energy, also dropped -0.1% on the month, as both domestic and imported product prices declined by -0.1% mom.

On an annual basis, inflation held steady at just 0.2% yoy, in line with expectations. Core CPI eased further to 0.7% yoy from 0.8% yoy previously. Domestic price growth slowed to 0.6% yoy from 0.7% yoy, while imported prices contracted by -1.3% yoy, a slight improvement from -1.4% yoy in July.

The data confirm that inflation in Switzerland remains exceptionally subdued. Yet, deflation risk is not imminent. That leaves little urgency for the SNB to bring back negative interest rates for now.

Full Swiss CPI release here.

Daily Pivots: (S1) 1.3777; (P) 1.3793; (R1) 1.3808; More...

Intraday bias in USD/CAD remains neutral for the moment. On the upside, firm break of 1.3813 resistance will retain near term bullishness that rebound from 1.3538 is still in progress. Intraday bias will be back on the upside for retesting 1.3923 next. On the downside, decisive break of 1.3720 will argue that the corrective pattern from 1.3538 has already completed at 1.3923. Intraday bias will be back on the downside for 1.3574 support first.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

Markets adopted a cautious tone again today, as attention swung back to U.S. economic data. Today’s ADP private payrolls and ISM services figures are seen as key precursors to tomorrow’s highly anticipated nonfarm payrolls. The numbers are expected to sharpen the Fed’s rate-cut calculus, with traders reluctant to take large positions before the release.

Fed officials have broadly indicated openness to a rate cut this month, reinforcing expectations of a 25-basis-point move. Fed fund futures now price the odds of such a cut above 97%, reflecting the market’s conviction that easing is imminent.

The debate, however, is less about September and more about what comes afterward. Even Fed Governor Christopher Waller, a known dove, refrained from endorsing consecutive cuts. While he expects multiple moves over the next three to six months, he stressed that there is no fixed schedule, leaving policymakers room to adapt to incoming data.

On the other end of the spectrum, Atlanta Fed President Raphael Bostic reiterated his preference for a single cut this year, arguing that inflation risks remain the dominant concern. The divide highlights how much weight upcoming data, including Friday’s NFP, will carry in shaping expectations for the policy path into year-end.

Trade risks are also back in focus. US President Donald Trump asked the Supreme Court to fast-track his appeal against lower court rulings that deemed most of his global tariffs illegal. The appeals court ruled last week that Trump overstepped his authority when imposing sweeping levies on nearly all U.S. trading partners.

Trump is pushing for arguments to be heard in November with a decision soon after, warning that a delay until June 2026 could see as much as USD 750 billion to USD 1 trillion in tariffs collected and then potentially unwound—an outcome he says would cause major disruption. Normally, the Supreme Court would not deliver a decision until next summer.

Separately, Japan’s top trade negotiator Ryosei Akazawa departed for Washington for ministerial-level talks, signaling progress in implementing the bilateral trade deal reached in July. “Both Japan and the U.S. have agreed to implement the agreement faithfully and swiftly,” Akazawa said before leaving Tokyo.

In currency markets, Dollar remains the week’s best performer. Aussie and Euro follow, while Yen is the weakest, trailed by Sterling and the kiwi. Franc and Loonie are trading mid-range.

In Asia, at the time of writing, Nikkei is up 1.47%. Hong Kong HSI is down -0.84%. China's Shanghai SSE is down -1.1%. Singapore Strait Times is up 0.27%. Japan 10-year JGB yield is down -0.027 at 1.610. Overnight, DOW fell -0.05%. S& 500 rose 0.51%. NASDAQ rose 1.02%. 10-year yield fell -0.066 to 4.211.

Fed's Beige Book shows little growth, tariff pressures building

Fed’s Beige Book indicated that U.S. economic activity was largely stagnant over the past period, with most Districts reporting "little or no change". Across the board, consumer spending was described as "flat to declining" as wages failed to keep pace with rising prices. Uncertainty and tariffs were frequently cited as additional drags on sentiment.

Employment trends also remained subdued, with 11 of the 12 Districts reporting little or no change in job levels and one District citing a modest decline. On prices, most Districts characterized inflation as "moderate or modest", though two noted strong input cost increases that outpaced selling prices. Nearly all pointed to tariffs as a key driver of higher costs. Looking ahead, firms widely expect prices to continue rising, with three Districts warning the pace of increases could accelerate further.

Fed’s Kashkari: Neutral rate at 3% leaves room to ease "gently"

Minneapolis Fed President Neel Kashkari said overnight that with the neutral policy rate near 3%, interest rates have “some room to come down gently” over the next couple of years.

Nevertheless, he noted what while headline inflation is being pushed higher by tariffs on goods, other areas like housing are experiencing disinflation, leaving overall price pressures essentially “going sideways.”

Kashkari described the current backdrop as a “tricky situation,” with inflation still too high but the labor market clearly cooling. He stressed that policymakers will need to watch developments carefully before drawing firm conclusions about the path of policy.

While acknowledging risks, Kashkari said he is not forecasting a recession. Instead, he expects the cooling in the labor market to continue in a “somewhat gentle” fashion, suggesting the Fed can gradually reduce rates without tipping the economy into contraction.

RBA’s Bullock hints fewer cuts ahead as spending surges, GBP/AUD extends lower

Australian Dollar is holding its ground as one of the strongest performers in FX markets this week, buoyed by upbeat economic data and comments from RBA Governor Michele Bullock.

Australian consumer spending rose 5.1% yoy in July, according to the ABS released today, led by demand for health services, hotels, travel, and restaurants. The data point to resilient household demand despite tighter financial conditions and underline a growing willingness among households to spend after a prolonged stretch of caution.

That strength follows Wednesday’s GDP report, which showed growth of 0.6% in Q2. Discretionary spending surged 1.4% in the quarter, the fastest pace in three years, highlighting that consumption is now a meaningful driver of Australia’s recovery.

Responding to the GDP data, Governor Bullock cautioned overnight that sustained strength in consumption could limit scope for further easing. “If it keeps going, then there may not be many interest rate declines yet to come. But it all depends,” she said.

Aussie's strength stands in contrast to Sterling, which has been weighed down by fiscal concerns. Technically, GBP/AUD extended its decline from 2.1003 this week. Momentum is easing slightly near 2.0420 support level as seen in 4H MACD. But risks remain tilted lower as long as 2.0693 resistance holds. Current fall should be in progress through 2.0420 to 61.8% projection of 2.1643 to 2.0478 from 2.1003 at 2.0283.

The 2.0283 area aligns closely with 55 W EMA now at 2.0265. Decisive move through that zone would suggest that the decline from 2.1643 is evolving into a medium-term downtrend, even if it's just a correction to the rise from 1.5925 (2022 low).

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.3777; (P) 1.3793; (R1) 1.3808; More...

Intraday bias in USD/CAD remains neutral for the moment. On the upside, firm break of 1.3813 resistance will retain near term bullishness that rebound from 1.3538 is still in progress. Intraday bias will be back on the upside for retesting 1.3923 next. On the downside, decisive break of 1.3720 will argue that the corrective pattern from 1.3538 has already completed at 1.3923. Intraday bias will be back on the downside for 1.3574 support first.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

Major European and US indices attempted a recovery yesterday as long-dated yields eased, providing some relief. Tech led the rebound, with the Magnificent 7 up 2%. Alphabet jumped 9% after the DoJ announced that Google can keep Chrome, but it will have to share online search data with its competitors. That was SUCH a relief for Google, as losing Chrome would mean losing the major interface of the company and would cost Google massively. No wonder, Google shares soared to a fresh ATH level. Apple also gained 3.8% after a judge declined to bar its lucrative search arrangement with Google. Taken together, the rulings were read as a sign that US courts may remain friendlier to tech giants than feared under Trump administration. Yet, these companies are trading at sky-high valuations already – meaning that the anti-trust probes did little to shed value in the past. Investors are increasingly worried that some of these names have become... too expensive. Expensive or not, many investors in these big names have hard time finding exciting alternatives, explaining why investors keep piling into these stocks despite sky-high valuations.

The main story remains the global bond selloff. Sovereign bonds in developed economies are under pressure, with long-maturity yields near multi-decade highs on the back of ballooning debt, political obstacles to fiscal tightening and structurally higher inflation. To finance higher debt servicing costs, governments are issuing more bonds — further pushing yields higher. The US 30-year yield briefly tested the 5% psychological level before retreating, while a softer-than-expected JOLTS report — with job openings falling to a one-year low — reinforced expectations of a slowing labour market. The US 2-year yield fell to its lowest this summer, with futures pricing a 95% probability of a September 25bp Fed cut. Markets now await ADP data today and nonfarm payrolls Friday to confirm the trend. A soft ADP read today and weak official jobs data on Friday could further support this trend and pull yields lower. We’re yet to see whether the steepening of the yield curve will slow, now that the 30-year bond offers around 5%. Upcoming rate cuts could boost medium- to long-term inflation expectations and keep the long end under pressure. Indeed, the 2-year yield is pushing lower, while the 30-year yield shows a modest rebound this morning.

Softer Federal Reserve (Fed) expectations keep the US Dollar under pressure. Gold extended its rally to fresh record levels around $2’500/oz, supported by a weaker dollar and growing concerns over sovereign debt sustainability in developed markets. Many EM central banks are expected to continue diversifying away from US Treasuries into gold — an asset not subject to government creditworthiness or sanctions risk, as highlighted by the freezing of Russia’s reserves in 2022. This trend could accelerate if Fed independence comes under pressure from political attacks.

That raises the question: could Bitcoin serve a similar role? Like gold, it has no government issuer. But the US increasingly seeks to position itself as a crypto hub, which could politicize the asset. In a sharper West–Rest divide, emerging-market populations — who make up an estimated 60–70% of global crypto holders — may face pressure on their dollar-denominated Bitcoin holdings, potentially weighing on adoption.

In Europe, benchmark 10-year yields eased despite political turbulence in France, where another government collapse looms. Japanese 20- and 30-year yields also pulled back slightly from multi-decade highs.

The bond selloff will likely stabilize once yields are seen as attractive enough to draw buyers back into sovereign debt. But we may see a further selloff before rebound.

In focus today

In Sweden, the most important event of the week is the inflation figures for August, which will be published at 8.00 CET. These are the preliminary flash estimates, meaning we do not get any details, but today's outcome will likely be decisive for market pricing ahead of the Riksbank's September decision. Currently, the market is pricing in 11 basis points for September, and a full rate cut by the end of the year (11+7+7). We estimate that CPIF will rise to 3.4% and a print for underlying inflation, CPIF ex. energy, at 3.1% - which is too high for the Riksbank to cut rates already in September. An outcome in line with our expectations should push rate cut pricing towards November, in line with our forecast of a November cut.

In the US, the ISM Services index is due for release for August. The flash PMI released earlier pointed towards steady growth in business activity. Considering the concerns surrounding the Bureau of Labor Statistics (BLS), markets will also pay attention to two private labour market data releases for August, the ADP private sector employment report and the Challenger report for layoff announcements.

Economic and market news

What happened yesterday

In euro area, the final report for August's services PMI showed a downward revision, coming in at 50.5 compared to 50.7 in the flash release and 51.0 in July. The weakening in services data is a sign of subdued domestic demand despite solid fundamentals such as rising real incomes and employment. We see downside risks to the near-term growth outlook, particularly as private consumption could be weaker than expected due to low confidence.

In the US, JOLTs data revealed a sharper-than-expected decline in job openings, which fell to 7.181m in July, below the forecasted 7.378m, suggesting weaker-than-expected US labour demand. Hiring rose modestly, while layoffs remained elevated at 1.808m. These figures reinforce the picture of a cooling US labour market, with markets now pricing a 25bp Fed cut in September at 95%. Markets now look ahead to the August NFP report on Friday for further insights.

In Norway, house prices rose 0.6% m/m in August, continuing the moderate price increases observed since May. This figure is slightly higher than Norges Bank's June MPR forecast of 0.5% but is unlikely to influence the monetary policy decision on 18 September. Meanwhile, unfilled vacancies fell from 96,000 to 88,000 in Q2, lowering the vacancy rate to 2.7% from 3.0%, the lowest level since Q1 2021. This indicates that while demand for labour remains high, it is gradually easing, suggesting below-trend growth and a reduction in labour shortages. This highlights the positive supply-side effects following the strong Q2 GDP figures.

In Sweden, PMIs rebounded strongly in August, with services rising to 53.4 and the composite to 53.9, recovering after a weak July. The July decline was driven by a broad setback in services PMI where all components fell, most notably employment, which had the lowest reading since March 2020. In August, all components recovered.

In Poland, the central bank cut its main policy rate by 25bp to 4.75%, as expected. The move is primarily driven by the decline in inflation towards the central bank's target range.

Equities: The market narrative yesterday centred around rate cut expectations, following the soft JOLTS data release. A late-stage rally in equity markets led to S&P500 ending the day 0.5% higher. NASDAQ ended +1.2% while VIX ended 0.8pp lower mirroring the late-stage move. Tech was clearly performing primarily dragged higher from a US antitrust ruling against Alphabet which was not perceived as being as severe as expected.

FI and FX: The weak JOLTS report from the US yesterday sent US rates and the USD lower. The market is now about fully priced for a rate cut from the Fed in two weeks and another before the end of the year. The 10Y US Treasury yield fell to 4.20, USD/JPY dropped to 148 and EUR/USD briefly bounced above 1.1680. EUR/SEK has held steady around the 11.00 level since Monday. EUR/NOK traded around the 11.70 level yesterday.

Australian Dollar is holding its ground as one of the strongest performers in FX markets this week, buoyed by upbeat economic data and comments from RBA Governor Michele Bullock.

Australian consumer spending rose 5.1% yoy in July, according to the ABS released today, led by demand for health services, hotels, travel, and restaurants. The data point to resilient household demand despite tighter financial conditions and underline a growing willingness among households to spend after a prolonged stretch of caution.

That strength follows Wednesday’s GDP report, which showed growth of 0.6% in Q2. Discretionary spending surged 1.4% in the quarter, the fastest pace in three years, highlighting that consumption is now a meaningful driver of Australia’s recovery.

Responding to the GDP data, Governor Bullock cautioned overnight that sustained strength in consumption could limit scope for further easing. “If it keeps going, then there may not be many interest rate declines yet to come. But it all depends,” she said.

Aussie's strength stands in contrast to Sterling, which has been weighed down by fiscal concerns. Technically, GBP/AUD extended its decline from 2.1003 this week. Momentum is easing slightly near 2.0420 support level as seen in 4H MACD. But risks remain tilted lower as long as 2.0693 resistance holds. Current fall should be in progress through 2.0420 to 61.8% projection of 2.1643 to 2.0478 from 2.1003 at 2.0283.

The 2.0283 area aligns closely with 55 W EMA now at 2.0265. Decisive move through that zone would suggest that the decline from 2.1643 is evolving into a medium-term downtrend, even if it's just a correction to the rise from 1.5925 (2022 low).

Key Highlights

• EUR/USD corrected gains after it faced hurdles near 1.3550.
• It traded below a rising channel with support at 1.3465 on the 4-hour chart.
• Gold prices rallied further and climbed above the $3,450 resistance.
• EUR/USD remained stable above 1.1600 and 1.1580.

GBP/USD Technical Analysis

The British Pound struggled near 1.3550 and corrected gains against the US Dollar. GBP/USD dipped below the 1.3500 and 1.3450 levels.

Looking at the 4-hour chart, the pair traded below a rising channel with support at 1.3465. The pair even settled below the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour).

A low was formed at 1.3333 and the pair is now correcting losses. There was a move above the 1.3400 level and the 50% Fib retracement level of the downside correction from the 1.3550 swing high to the 1.3333 low.

The pair is now facing resistance near the 1.3450 level. The next key hurdle sits near the 76.4% Fib retracement level of the downside correction from the 1.3550 swing high to the 1.3333 low and the 100 simple moving average (red, 4-hour) at 1.3500.

A close above 1.3500 could set the pace for another increase. In the stated case, the pair could rise toward 1.3550, above which the bulls could aim for a move toward 1.3600. Any more upsides could send GBP/USD toward 1.3680.

On the downside, immediate support is 1.3380. The next key area of interest might be 1.3320. Any more losses could send the pair toward the 1.3250 support zone.

Looking at Gold, the bulls remain in action as they were able to push the price above the $3,450 resistance zone.

Upcoming Key Economic Events:

• US ISM Services Index for August 2025 – Forecast 51.0, versus 50.1 previous.
• US Initial Jobless Claims - Forecast 230K, versus 229K previous.