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Daily Pivots: (S1) 0.9349; (P) 0.9384; (R1) 0.9404; More....

A short term top was formed at 0.9452 with current steep decline in EUR/CHF. While initial support is seen from 55 D EMA (now at 0.9365), further fall is in favor as long as 0.9400 support turned resistance holds. Sustained trading below the EMA will suggest that the rebound from 0.9218 has completed, and target 0.9265 support for confirmation. Nevertheless, break of 0.9400 will bring retest of 0.9452 resistance.

In the bigger picture, the down trend from 0.9204 (2018 high) might still be in progress considering that EUR/CHF is staying well inside the long term falling channel. However, with bullish convergence condition in W MACD, downside potential should be limited in case of another fall. Instead, firm break of 0.9660 resistance will be an important sign of medium term bullish trend reversal.

Daily Pivots: (S1) 1.1623; (P) 1.1649; (R1) 1.1675; More...

Sideway trading continues in EUR/USD and intraday bias stays neutral. Further rally is expected as long as 1.1589 support holds. Above 1.1729 will bring retest of 1.1829 high. On the downside, however, firm break of 1.1589 will turn bias to the downside, and extend the corrective pattern from 1.1829 with another fall.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

Daily Pivots: (S1) 1.3432; (P) 1.3471; (R1) 1.3494; More...

Intraday bias in GBP/USD stays neutral at this point. While correction from 1.3594 might extend lower, down side should be contained by 1.3399 support. On the upside, break of 1.3594 will resume the rise from 1.3140 to retest 1.3787 high. However, firm break of 1.3398 will argue that the corrective pattern from 1.3787 is extending with another falling leg. Deeper decline should the be seen back towards 1.3140.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3090) holds, even in case of deep pullback.

Daily Pivots: (S1) 146.84; (P) 147.33; (R1) 147.79; More...

Intraday bias in USD/JPY stays neutral as range trading continues. On the upside, break of 148.51 will indicate that the pullback from 150.90 has completed, and bring retest of this high. This will also keep the whole rise from 139.87 alive. However, firm break of 145.84 support will argue that the rebound from 139.87 has completed, and turn near term outlook bearish.

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) 0.8018; (P) 0.8055; (R1) 0.8080; More….

No change in USD/CHF's outlook as range trading continues. Intraday bias remains neutral at this point. On the downside, break of 0.8020 will revive that case that the corrective pattern from 0.7871 has completed, and target a retest on 0.7871 low. On the upside, firm break of 0.8710 will resume the corrective from 0.7871. Intraday bias will be back on the upside for 38.2% retracement of 0.9200 to 0.7871 at 0.8379.

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) 1.3857; (P) 1.3871; (R1) 1.3887; More...

Intraday bias in USD/CAD remains on the upside for the moment. Decisive break of 1.3878 resistance will extend the corrective rebound from 1.3538. Next target is 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017). Strong resistance should be seen there to complete the corrective bounce. On the downside, below 1.3830 minor support will turn intraday bias neutral again 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 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

Yesterday’s FOMC minutes further dampened investor mood and accelerated the equity selloff – again led by a significant drop across Big Tech. The minutes stated that Fed officials were worried about both weakening jobs data and inflation risks, but that “a majority of participants judged the upside risks to inflation as the greater of these two risks.” That means officials remain inclined to prioritize inflation control by keeping monetary policy tight rather than cutting rates.

Yet, one caveat makes the minutes look less hawkish than they first appeared: this meeting was held before the release of the problematic July jobs report – with big downside revisions – that spooked investors and fueled expectations for a September cut. Jerome Powell’s speech tomorrow could therefore strike a middle ground: acknowledging rising concern about the labour market, while underscoring that inflation remains a key risk to be addressed carefully.

As such, the Federal Reserve (Fed) will probably announce a 25bp cut next month but stop short of signaling more. The US 2-year yield was under pressure ahead of the minutes but rebounded on the committee’s broadly hawkish stance. The US 2-30 year spread is widening on fears that today’s rate cuts could fuel tomorrow’s inflation, while the ballooning US debt will be more expensive to finance. One bright spot: Trump’s tariffs are bringing in revenue that S&P Global Ratings says could soften the fiscal burden. But they also warn that the trade war risks ushering in a new world order dominated by China.

The pressure on the long end of the yield curve doesn’t calm investor nerves either, as less risky bonds are now offering higher returns and attracting flows. The Japanese 30-year JGB yield is also testing its highest levels in more than two decades. That raises the risk of Japanese reverse carry trades – investors closing yen-funded positions abroad and returning to higher-yielding domestic assets. If that accelerates, global risk assets could face further pressure on top of Fed and trade worries.

The S&P 500 remained under pressure from Big Tech selling, though a small rebound appeared late in the session, and futures hint at a steadier open this morning. Futures on the Taiwan Stock Exchange are better bid, with TSMC up 1.3%, suggesting US tech selling could cool. Nvidia slipped below $160 before dip buyers stepped in, and the SPDR tech ETF bounced off its 50-DMA. Whether the tech-led selloff – and thus the broader indices – deepens into sector rotation remains to be seen. Earnings have been solid, and Nvidia hasn’t said its last word yet, but AI enthusiasm looks largely priced in, and Fed expectations have run far enough that markets could shift back toward the hawkish side, especially as long-term bond yields look increasingly attractive.

Today, investors will watch global PMI releases to recalibrate policy expectations. Japan’s manufacturing PMI beat forecasts but remained in contraction due to weaker foreign demand from tariffs. That suggests the BoJ won’t rush into further hikes until the recovery looks steadier. In India, manufacturing PMI showed its strongest growth since 2008, with robust domestic demand offsetting flat export orders. The Nifty 50 extended gains above the 50-DMA, bucking global risk aversion. Europe’s numbers will likely show continued contraction in manufacturing, with slight services expansion. European Central Bank (ECB) President Lagarde warned yesterday that euro-area growth could slow this quarter under tariff pressure, noting the announced tariffs were “a little higher” than assumed in June but still below worst-case scenarios. The EURUSD is treading water around the 50-DMA, awaiting Powell’s Jackson Hole speech for direction.

In the UK, sterling extended losses despite a hotter-than-expected CPI print, pointing to sticky services inflation. While the data initially lifted hawkish Bank of England (BoE) expectations and weighed on November cut bets, many concluded it won’t stop a November cut: April’s tax and minimum-wage hikes are seen weighing enough on growth for the BoE to keep easing.

Meanwhile, Ukraine talks continue in the background, with Russia expressing willingness to join security talks with Western allies. Any lack of progress toward durable peace could revive oil bulls. US crude found support near $62pb and is pushing higher this morning. The summer decline leaves room for a medium-term rebound: fading peace hopes could send prices back above $65pb. A space to watch.

Markets

Markets remained mired in mostly technical, order-driven trading yesterday. On equity markets, Tuesday’s ‘rotation’ out of some US tech-related stocks to some extent continued (Nasdaq -0.63%, Dow +0.04%, Eurostoxx 50 -0.20%), but it still occurred in an orderly fashion. Core bonds again attracted a mild (safe haven?) bid. At the end of the day US yields eased up to 1.5 bps (30-y), off softer levels intraday. This intraday rebound in yields was at least partially supported by the minutes of the July Fed meeting. The report said that ‘participants generally saw risks to both sides of the Fed’s dual mandate (upside for inflation, downside to employment), but that a majority judged the upside risk to inflation to be the greater of the two risks, with the impact of tariffs still containing a substantial degree of uncertainty. At that time, the labour market situation was still assessed to be solid. Of course this picture might have evolved after this month’s (labour and inflation) data. In the risk assessment, several members also note concerns on elevated asset valuations. Bunds slightly outperformed Treasuries (2-y -2.5 bps, 10-y -3.3 bps). ECB’s Lagarde in a speech assessed that “Recent trade deals have alleviated, but certainly not eliminated, global uncertainty”. This might still translate to slower growth this quarter. The ECB staff will factor in the impactions of the EU-US trade deal in its projections that will be available at the September 11 policy meeting. On FX markets, the dollar briefly dipped as US president Trump urged Fed Governor Lisa Cook to resign on allegations of mortgage fraud. The issue again raised concerns on political interference with Fed independence. Cook already indicated that she intends to stay. Initial USD losses were limited and short-lived. DXY closed in well-known territory (98.22) as did EUR/USD (1.165). UK gilt markets showed surprising/remarkable outperformance despite higher than expected July price data (yields lower by 6-7 bps across the curve). Sterling initially tried to gain after the inflation release, but was dragged lower later by the reversal in yields. EUR/GBP closed near 0.866 (from 0.863).

EMU but also US PMI’s take center stage today. The Philly Fed business outlook and US weekly jobless claims will also fuel the debate on the Fed reaction function as markets look forward to tomorrow’s Jackson Hole address of Fed Chair Powell. The EMU composite PMI is expected to confirm a scenario of lackluster growth (50.6). Maybe there is room for some improvement as trade-uncertainty eases (to some extent). After recent mixed/divergent US labour and inflation data, US PMI’s this time also have potential to cause some intraday repositioning with (both FI and FX) markets maybe slightly more sensitive to weaker/softer than expected outcome.

News & Views

S&P global this morning already published PMI business surveys for India, Japan and Australia. The Indian survey pointed at record expansion in private sector business activity in August with the composite PMI surging from 61.1 to 65.2. Sub-sector data revealed broad-based strength across India's economy as growth in both manufacturing and services output accelerated. Expectations for next 12 months also improved strongly, underpinned by the demand outlook. As for pricing trends, the latest survey data indicated an intensification of inflationary pressures across India's private sector. Japanese overall business activity expanded at the quickest pace in six months (composite 51.9 from 51.6). Like in India, the upturn was broad-based with a fresh rise in factory production accompanying a further strong increase in services activity. The manufacturing outlook nevertheless remains subdued with new orders still falling. Growth is being largely fueled by domestic demand with companies recording lower foreign demand (eg yesterday’s trade data; US tariffs hurting). Average input costs rose sharply but intense competition and requests from clients for discounts dampened overall pricing power resulting in a stronger squeeze in operating margins. Finally, also the Australian PMI (54.9 from 53.8) beat consensus with private sector output expanding at the fastest pace since April 2022. Domestic factors (RBA rate cuts) supported better conditions domestically, but external conditions also started to pick-up. To cope with demand, Australian firms raised staffing levels in the services sector. It’s the best of both worlds with price pressures also easing according to the survey. Companies broadly cited hopes for better market conditions and business expansion plans to drive growth in the year ahead...

Daily Pivots: (S1) 0.6416; (P) 0.6442; (R1) 0.6461; More...

Intraday bias in AUD/USD stays on the downside for the moment. Firm break of 0.6418 support will resume the whole corrective fall form 0.6624. Next target is 38.2% retracement of 0.5913 to 0.6624 at 0.6352. On the upside, above 0.6456 minor resistance will turn intraday bias neutral again first.

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).

Market activity cooled notably in Asian session today, with major currency pairs and crosses confined to tight ranges. The cautious mood reflects investor focus on the Jackson Hole Symposium, which begins today. The gathering of global central bankers is always a closely watched event, but this year’s comes at a particularly sensitive moment for markets.

The spotlight, of course, is on Fed Chair Jerome Powell’s remarks tomorrow. But in the meantime, headlines will still be populated by interventions from other central bankers, making it a cautious and headline-driven session. This year’s symposium carries extra weight given the backdrop of shifting Fed expectations and recent volatility across asset classes.

The event comes just after the release of the July FOMC minutes overnight, which revealed that most Fed officials maintained caution around tariff risks. That document, however, already looks dated. Since then, the US has reported a much weaker July payrolls report with sharp downward revisions, while early August brought another round of tariff escalations. These developments have significantly shifted the debate inside and outside the Fed.

Still, Fed’s latest dot plot projected two cuts in the second half of the year, suggesting September is the logical window for the first move. Fed funds futures currently price in an 82% chance of a September cut, slightly down from 92% a week ago. The real uncertainty lies in how forcefully the Fed will move after September, with opinions ranging from front-loading cuts to spreading them more cautiously.

This nuance will be critical for market sentiment, particularly with Wall Street already showing cracks. Technology stocks have been under heavy selling pressure this week, with NASDAQ struggling to recover after sharp declines. While the index managed to pare back some losses overnight, it remains vulnerable. Any hawkish surprise at Jackson Hole could amplify risk aversion and extend safe-haven flows into the Yen.

Beyond central bank rhetoric, attention today also turns to flash PMI data. The UK release is especially important after yesterday’s hotter-than-expected CPI print, which raised doubts about another BoE cut in November. For now, markets have pushed back expectations, with a quarter-point cut not fully priced until March 2026, compared with consensus earlier this month for a move by year-end.

A strong PMI reading would add further support to Sterling, though as recent sessions have shown, domestic strength may still be overshadowed by global risk-off sentiment. Sterling’s rebound after CPI data was already capped by souring risk appetite.

On the weekly performance scoreboard, Swiss Franc is currently the strongest currency, followed by Dollar and Yen. At the other end, Kiwi has underperformed badly, followed by Aussie and Sterling, while Euro and Loonie hold middle ground.

In Asia, at the time of writing, Nikkei is down -0.54%. Hong Kong HSI is down -0.25%. China Shanghai SSE is up 0.24%. Singapore Strait Times is up 0.22%. Japan 10-year JGB yield is up 0.005 at 1.613. Overnight, DOW rose 0.04% S&P 500 fell -0.24%. NASDAQ fell -0.67%. 10-year yield fell -0.006 to 4.296.

FOMC minutes show Waller, Bowman the dove outliers amid tariff uncertainty

FOMC minutes from July 29–30 meeting showed that while two members, Governor Christopher Waller and Michelle Bowman, dissented in favor of a rate cut, they remained isolated within the Committee. “Almost all participants” judged it appropriate to keep the federal funds rate at 4.25%–4.50%, highlighting the broad consensus to hold steady amid uncertainty.

The discussion revealed a split in emphasis: most officials still see upside inflation risks as "the greater of these two risks", particularly given tariffs and the risk of unanchored expectations. But a couple of members warned that weakening employment should not be underestimated, reflecting the growing tension between Fed’s dual mandate.

The minutes flagged “considerable uncertainty” over the timing and scale of tariff effects, leaving policymakers braced for potential tradeoffs if inflation proves sticky while labor market softens. Rate decisions, thus, would depend on “each variable’s distance from the Committee’s goal and the potentially different time horizons over which those respective gaps would be anticipated to close.”

Japan’s PMI manufacturing nears expansion at 49.9, but external demand raises sustainability concerns

Japan’s flash PMI data for August showed momentum improving, with the composite index rising slightly from 51.6 to 51.9. Manufacturing posted a surprise recovery, with output climbing back into expansion at 50.5 from 47.6, while the broader PMI Manufacturing rose to 49.9 from 48.9. However, services growth slowed, with the index easing to 52.7 from 53.6.

S&P Global’s Annabel Fiddes noted that the upturn was broad-based, led by a fresh rise in factory production alongside continued service-sector strength. Still, new orders in manufacturing remained weak, raising questions about how sustainable the rebound in factory output will be without stronger demand.

Foreign demand was a drag across both goods and services, leaving the recovery heavily reliant on domestic activity. At the same time, rising input costs squeezed firms’ margins as competitive pressures limited their ability to pass costs on to clients. Selling price inflation slowed to its weakest pace since October, underlining the profitability challenge for Japanese businesses.

Australia PMI composite rises to 54.9, growth broadening, inflation cooling

Australia’s private sector gained momentum in August, with both manufacturing and services showing stronger growth. Manufacturing PMI climbed to 52.9 from 51.3, while Services PMI improved to 55.1 from 54.1. As a result, Composite PMI rose to 54.9 from 53.8, its highest since April 2022, signaling a broadening recovery.

S&P Global’s Jingyi Pan noted that easier interest rates have supported domestic activity, while external demand is also beginning to revive. Export orders picked up, adding to optimism among Australian businesses, and sentiment strengthened notably through the month.

Price pressures, meanwhile, showed signs of easing. Output price inflation pulled back from July’s recent high, a shift that could help sustain demand in the months ahead. That combination of stronger demand and softer price growth points to a healthier balance in the economy and gives RBA space to assess policy moves more carefully in the coming months.

NZ trade swings back into deficit despite broad export gains

New Zealand’s trade balance flipped back into deficit in July, with imports outpacing exports despite solid overseas demand. Goods exports climbed 10% yoy to NZD 6.7 billion, but imports rose 2.6% yoy to NZD 7.3 billion, leaving a monthly deficit of NZD -578 million compared with expectation of NZD 70 million surplus.

Export performance was broadly positive across major partners. Shipments to the EU jumped 28% yoy, while sales to Japan rose 23%. Exports to the U.S. and China also advanced by 7.7% and 7.1% respectively. Australia remained steady with a 4.7% increase.

On the import side, gains were concentrated in the EU and U.S., up 22% yoy and 24% respectively. Purchases from China increased 6.9%, while imports from Australia ticked up by 2.7%. However, imports from South Korea slumped by a sharp -33%.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6416; (P) 0.6442; (R1) 0.6461; More...

Intraday bias in AUD/USD stays on the downside for the moment. Firm break of 0.6418 support will resume the whole corrective fall form 0.6624. Next target is 38.2% retracement of 0.5913 to 0.6624 at 0.6352. On the upside, above 0.6456 minor resistance will turn intraday bias neutral again first.

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).