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US jobs report smashes expectations, triggering dollar rebound

The US job creation engine accelerated dramatically last month, further bolstering the case for a rate hike at the Federal Reserve’s meeting later this month. According to the Bureau of Labor Statistics, 162,000 jobs were added in August—representing a massive overshoot relative to the 55,000-position consensus forecast—while the previous two months were revised down by a total -23,000 positions, bringing the three-month average pace of job creation up to 71,000, from 30,000 ahead of the update. Perhaps more crucially, the unemployment rate held at 4.1%, and average hourly earnings climbed 0.3% month-over-month, speeding up from the 0.1% pace set in...

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USD under pressure. US jobs data in focus.

• Positive vibes. Equities rose & the USD slipped back as markets tempered near-term US Fed rate hike bets & USD/JPY fell. AUD at top of recent range.• Data pulse. Post Q2 AU GDP markets factoring in another RBA hike by November. High chance it happens this month. US jobs report out tonight. Global Trends Risk sentiment has been positive over the past couple of sessions with oil prices stabilising (albeit at elevated levels with brent crude tracking near ~US$96/brl) and traders paring back expectations for near-term US Fed rate hikes. Odds of a mid-September rate rise by the US...

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Ructions in Japanese yen dominate global currency markets

Good morning. The dollar is back on the defensive after the yen posted its biggest two-day gain since last month’s historic US-Japanese intervention. Brent crude is trading just below $95, after this week’s escalation in military hostilities between the US and Iran. Sovereign-bond yields are steadying below their recent highs, and equity futures are holding firm ahead of the North American open. The euro and pound are treading water amid a lack of domestic catalysts. The yen is up almost 2%, having surged twice in the last day. The causes are somewhat mysterious. One possibility is that the moves were...

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Bank of Canada holds, emphasises upside price risks

The Bank of Canada left its policy settings unchanged this morning, while also adopting a somewhat surprisingly-optimistic view on the Canadian economy amid an intensifying trade conflict with the United States. Officials led by Governor Tiff Macklem maintained the policy rate at 2.25% for a seventh consecutive meeting after delivering nine cuts between June 2024 and September 2025. In the official statement setting out the decision, policymakers noted “demand for labour remains subdued and indicators point to continued excess supply in the economy” and warned that high uncertainty and “new US tariffs and threats of further action” could derail any...

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Dollar climbs as US and Iran exchange fire, global yields march higher

Good morning. The dollar is advancing against all its major counterparts as the conflict in the Middle East turns hot and the rout in global bond markets grinds on. The euro, pound, and yen are trading softer ahead of a raft of US data releases, including the monthly ADP employment print, durable goods orders, and Beige Book survey—none of which are typically market moving, but any of which might contribute to expectations for monetary tightening in the months ahead. Oil prices are climbing after the US launched another round of strikes on Iranian targets—including two tankers—and Tehran said it had...

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