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Daily Pivots: (S1) 1.7819; (P) 1.7870; (R1) 1.7930; More...

No change in EUR/AUD's outlook as sideway trading continues. Intraday bias stays neutral at this point. On the upside, firm break of 1.7972 resistance should confirm that corrective pattern from 1.8094 has completed at 1.7671. Further rise should then be seen through 1.8094, to resume the rebound from 1.7245. Next target is 61.8% projection of 1.7245 to 1.8094 from 1.7671 at 1.8196. On the downside, below 1.7671 will bring deeper fall back to 1.7459 support instead.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. Such pattern could extend further with another falling leg. But even in that case, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Uptrend from 1.4281 is expected to resume at a later stage.

Daily Pivots: (S1) 0.9397; (P) 0.9419; (R1) 0.9436; More....

EUR/CHF retreated again ahead of 0.9445 resistance and intraday bias is turned neutral. On the upside, decisive break of 0.9445 will resume the whole rebound from 0.9218. Next target is 100% projection of 0.9218 to 0.9445 from 0.9265 at 0.9492. However, sustained trading below 55 4H EMA (now at 0.9384) will extend the corrective pattern from 0.9445 with another falling leg.

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 position 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) 1.3749; (P) 1.3778; (R1) 1.3801; More...

Intraday bias in USD/CAD remains neutral at this point. On the downside, break of 1.3720 will reaffirm the case that corrective pattern from 1.3538 has completed at 1.3878. Further decline should then be seen back to retest 1.3538 low. However, break of 1.3809 will bring retest of 1.3878. Further break there will extend the corrective rebound from 1.3538 with another rising leg.

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.

Daily Pivots: (S1) 0.6494; (P) 0.6518; (R1) 0.6553; More...

AUD/USD's rebound from 0.6418 resumed by breaking 0.6540 temporary top and intraday bias is back on the upside. Further rise should be seen back to retest 0.6625 high. Overall, price actions from 0.6624 are seen as a corrective pattern that might still extend. On the downside, break of 0.6481 will suggest that it's in the third leg and bring deeper fall to 0.6418 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).

Daily Pivots: (S1) 147.45; (P) 147.98; (R1) 148.39; More...

USD/JPY's rebound lost momentum after hitting 148.51 and intraday bias is turned neutral again. On the downside, below 146.61 will resume the fall from 150.90. Further break of 145.84 support will suggests that whole rebound from 139.87 has completed at 150.90, and turn outlook bearish. On the upside, though, above 148.51 will target a retest on 150.90 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) 0.8042; (P) 0.8085; (R1) 0.8107; More….

Intraday bias in USD/CHF stays 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) 1.3438; (P) 1.3481; (R1) 1.3543; More...

Intraday bias in GBP/USD remains on the upside as rise from 1.3140 is in progress for 1.3587 resistance. Correction from 1.3787 should have completed with three waves down to 1.3140. Firm break of 1.3587 will bring retest of 1.3787 high. On the downside, below 1.3398 minor support will turn intraday bias neutral and dampen the bullish case.

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 1.3068) holds, even in case of deep pullback.

Markets

Monthly headline and core US CPI inflation printed bang in line with expectations at respectively +0.2% M/M and +0.3% M/M yesterday. Annual reading showed a stabilization on the overall level (2.7% Y/Y) and an increase from 2.9% Y/Y to 3.1% Y/Y for the core gauge (matching highest level since January 2025). More importantly from a market point of view: the publication lacked feared evidence of tariff inflation. Core goods prices excluding new vehicles and used cars and trucks rose by 0.22% M/M, less than half the 0.55% M/M pace in June (highest since early 2022). With two out of “three critical Summer CPI reports” (dixit Fed Chair Powell) out of the way, markets become more confident that the Fed will pull the policy normalization card when it meets next in September. Especially as activity and labour market data point to growing downside risks to the Fed’s maximum employment mandate. A 25 bps rate cut is now fully discounted. If activity data continue to disappoint in coming weeks (eg retail sales on Friday), we err on the side of money markets starting to contemplate the possibility of the Fed pulling a 50 bps rate cut like they did in September of last year. The option was yesterday floated by US Treasury Secretary Bessent as well. The US yield curve steepened yesterday. Short-term yields lost up to 3.8 bps (2-yr) while the very long end of the curve gained 2.6 bps. European and UK yield curves steepened as well, in bearish fashion and without specific trigger. The move started somewhat after the US CPI release. German yields rose by 0.3 bps (2-yr) to 7.3 bs (30-yr) with the German 30-yr yield taking out technical resistance (2023 & 2025 highs at 3.26%) to close at the highest level since 2011 (3.3%). UK yields added 2.2 bps (2-yr) to 7.5 bps (30-yr) with the very long end of the curve (5.47%) closing in on 5.6% resistance. We keep a close eye on this move as it fits in our medium term bearish view on bonds because of the return of term premia. In FX space, the dollar lost out against the euro. EUR/USD spiked from 1.16 to 1.1650 on the CPI-release but suffered follow-up losses towards the high 1.16-area. The greenback(‘s credibility) got further eroded by Trump’s suggestion that he is weighing a lawsuit against Fed Chair Powell over the renovation of the central bank’s headquarters. The latter is a judicial route Trump is exploring to get rid off Powell. The dollar faced more pressure after Trump’s pick as new commissioner for the Bureau of Labour Statistics floated the idea of pausing the monthly payrolls releases amid accuracy concerns. Until it is corrected, he suggested publishing more accurate though less timely quarterly numbers. US stock markets extended their record races with gains of over 1% on the prospect of a less restrictive Fed policy.

Risk sentiment remains positive in Asia this morning. Japanese bonds underperform after a weak 5-yr government bond auction. Today’s empty eco calendar suggests markets will stick to yesterday’s themes (weaker dollar, steeper curves). Tomorrow and on Friday, more US eco data will help shape Fed expectations with PPI inflation and weekly jobless claims tomorrow and the empire manufacturing survey, retail sales and the University of Michigan consumer confidence survey (including inflation expectations measures) on Friday.

News & Views

OPEC yesterday raised next year’s oil demand growth forecast from 1.3 mb/d to 1.4 mb/d. This year’s expectation was unaltered at 1.3 mb/d (y/y). The revision comes on the back of supportive economic activities. OPEC sees global economic growth of 3% this year and 3.1% in 2026. Some upward revisions were made for the US (1.8%-2.1%), the eurozone (1.2%-1.2%) and China (4.8%-4.5%). Oil supply forecasts outside the Organization of the Petroleum Exporting Countries were downwardly revised from for 2026 from 0.7 mb/d to 0.6 mb/d while this year’s forecast remained steady at 0.8 mb/d. Data from yesterday’s monthly oil market monitor thus suggest a tighter market next year with rapidly depleting oil inventories around the world (1.2 mb/d) unless OPEC continues scaling up previously halted production. We must add that OPEC forecasts of late have been a lot more bullish than other industry prognosis made for example the International Energy Agency.

Yesterday, US inflation data was mixed, but the market reaction was not. Core inflation in the US posted its strongest gains this year, and the yearly figure accelerated more than expected to 3.1% in July. However, headline inflation eased more than expected to 2.7%. Normally, core inflation is the measure the Federal Reserve (Fed) focuses on when deciding monetary policy. In that context, the market could have reacted by scaling back expectations of a September rate cut.

But no — investors instead increased September cut expectations, thinking that imported goods inflation remained lower than feared as companies continued to absorb tariff costs. As a result, the US 2-year yield fell after the data release, the probability of a September cut jumped to 94% from 80% beforehand, and the US dollar slipped back below its 50-DMA. The index had already reversed its summer uptrend last week, the game is on for further US dollar weakness. There is still one more set of PCE, jobs, and CPI data before the next decision (even though the new BLS chief is reportedly willing to pause the monthly jobs releases). Still, the odds favour a 25bp Fed cut in September.

The story doesn’t end there. US Treasury Secretary Scott Bessent is now calling for a jumbo rate cut in September — a 50bp move would help offset US jobs weakness caused by trade policies. That sets the stage for further yield curve steepening, driven by rising rate-cut expectations pulling the short end of the curve lower, while exploding US debt keeps the long end from falling by a similar magnitude. One hope is that Trump’s tariff revenue — and direct collections from companies like Nvidia and AMD on their overseas operations — could fill government coffers, reduce the need for longer-term Treasury issuance, and help contain the long end of the curve. Right now, investors remain more motivated by the prospect of upcoming rate cuts supporting growth than by debt concerns — even if those debt concerns loom large on the horizon.

The S&P 500 advanced to a fresh ATH yesterday, mid-cap stocks rallied more than 2%, and small caps jumped 3%. Bullish sentiment reigns on the back of a softening dollar, robust earnings, rate-cut expectations, and persistent tech appetite.

Speaking of the US dollar, the greenback’s softness continues to support major currencies. The EURUSD extends gains above its own 50-DMA, while cable is testing solid resistance near the 1.35 mark — which also coincides with its 50-DMA and will likely give way to sterling bulls. Yesterday’s UK jobs data came in significantly stronger than expected, and combined with rising inflation pressures, fuelled expectations that the Bank of England (BoE) will hold off on a November rate cut. That more-dovish Fed/more-hawkish BoE combination should support cable and bring 1.38 back into play in the coming weeks. Elsewhere in FX, the AUDUSD is stronger even after the Reserve Bank of Australia’s (RBA) rate cut yesterday and its signal of more to come.

A softer dollar makes EM investments attractive again, as it reduces borrowing costs and lowers import prices for dollar-denominated raw materials. Cherry on top, lower inflation pressures allow for supportive monetary policies. Brazil’s central bank, for instance, has taken advantage of a stronger real and cheaper imports to cut its Selic rate from 11.75% at the start of the year to around 10% by August without reigniting inflation. Similar trends are visible in Chile and Indonesia, where currency stability has given policymakers room to ease rates and stimulate growth. No surprise then that the MSCI EM index has outperformed the S&P500 this year, riding the tailwinds of easier monetary conditions and a softer greenback — partly offsetting the drag from US trade policies.

Weaker dollar should also help put a floor under the oil selloff, as it makes oil more affordable globally. OPEC has raised its global demand growth forecast by 100,000 barrels per day to 1.4 mbpd, implying a tighter market than previously projected. It also expects non-OPEC supply to shrink by the same amount due to lower prices. While I remain cautious on OPEC’s projections — given their vested interest — the US Department of Energy recently increased its forecast for this year’s global oil surplus to 1.7 mbpd, in contrast. Still, I now believe US crude should not sustainably drop below $60pb if the dollar continues to weaken — a positive adjustment from my earlier $50pb downside view.

In the short run, US crude fell yesterday after a surprise 1.5 million-barrel build in US inventories last week. But geopolitical risks remain tilted to the upside: the upcoming Trump–Putin meeting is unlikely to yield any meaningful progress on Ukraine. Any lack of progress should lead to a rebound in oil prices toward and above $65pb.

In focus today

Today is a quiet day for data releases, with no significant market movers.

Economic and market news

What happened overnight

In Australia, the Wage Price Index (SA) rose by 3.4% yoy in Q2 2025, matching the previous quarter's pace and exceeding expectations of a 3.3% increase. An acceleration in both the public and private sectors drove the stronger-than-expected growth, as public sector wages surged by 4.7%, up from 3.6% in Q1, while private sector wages rose by 3.4%, compared to 3.3% previously.

What happened yesterday

In the US, July CPI landed close to expectations on both headline (+0.19% m/m SA, June +0.29%, forecast +0.2%) and core terms (+0.32% m/m, June +0.23%, forecast +0.3%). Surprisingly, the modest uptick in core inflation was mostly driven by services. This would typically be seen as a sign of sticky inflation and hence interpreted as a hawkish signal. However, the fact that core goods and food inflation remained stable at still modest levels alleviated markets' concerns of rapid pass through of tariff-related costs. While we do expect core goods inflation to pick up speed towards fall, the reading supports the case for the Fed's September rate cut.

President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell, urging an immediate cut to benchmark interest rates. Trump also hinted at permitting a lawsuit against Powell, citing mismanagement of renovations at the Federal Reserve's buildings.

In Germany, the German ZEW indicator - measuring financial analyst views on the German economy - saw some weakening in August. Analysts rolled back on their assessment of the current situation (-59.5 to -68.6) and expectations (52.7 to 34.7), though the latter remained somewhat above the historical average. According to ZEW, experts were somewhat disappointed with the EU-US trade deal in terms of the economic outlook, while the weak German GDP figures for Q2 added to the weak current assessment index. A weak ZEW indicator should not be overinterpreted, and one should put more emphasis on tier-1 growth indicators such as the PMIs/IFO surveys. Markets seem to share that view as today's downside surprise did not trigger any noticeable reaction.

Equities: Global equities extended gains yesterday, with leadership coming from the US cyclical sectors and small caps. US indices closed at day-high and several indices at new all-time highs. While this pattern has repeated several times in recent months, what stood out yesterday was the market's focus on macro data, in particular, the US inflation print, rather than political headlines or daily news flow. The reaction was more or less textbook alike for the current phase of the cycle, fitting neatly with our strategy view from last month's report that investors are becoming increasingly data-driven, and less focused on the daily political noise.

In the US yesterday, Dow +1.1%, S&P 500 +1.1%, Nasdaq +1.4% and Russell 2000 +2.99%. Overnight, the positive momentum carried into Asia, with strong equity performance across the region. European futures are pointing higher, and U.S. futures are marginally in the green.

FI&FX: The in-line US July CPI print reinforced expectations that the Fed will have room to cut rates in September, lifting risk sentiment and pushing front-end US yields lower. EUR/USD edged higher to the 1.17 mark. The Swedish National Debt Office resumed bond auctions last week, issuing SEK 17.5bn in T-bills after a six-week summer break. Today's auction holds greater significance as it marks the first nominal government bond auction since late June.