Weekly Chartbook

• Mixed markets. Equities slipped back & USD ticked up overnight. AUD & NZD remain on the backfoot. JPY weaker after some BoJ comments.• US data. US jobs report out tonight. There has been a tendency for non-farm payrolls to exceed analyst forecasts the past few months. Will this continue?• AUD trends. The unfolding pull-back in the AUD isn’t unusual at this time of year. Late-July/August...

The Federal Reserve’s preferred inflation measure exhibited signs of acceleration last month even as personal spending growth slowed, providing more evidence of a “stagflation-lite” situation in the US economy. Data released by the Bureau of Economic Analysis this morning showed the core personal consumption expenditures index—which excludes food and energy costs—rising 0.3 percent in June from the...

• USD strength. Positive USD data & a patient Fed has supported the USD. This has weighed on other currencies like the AUD & NZD.• AU CPI. Q2 inflation softer than predicted. This reinforced expectations looking for the RBA to cut rates in August & deliver more ‘relief’ later this year.• Seasonal trends. USD rebound & unfolding AUD weakness inline with seasonal patterns...

The Federal Reserve downgraded its assessment of the economy even as it held interest rates steady for a fifth straight meeting, and stopped short of executing the sort of communications pivot that might have prepared markets for an imminent rate cut. The Federal Open Market Committee voted in a split 9-2 decision to maintain the target range for the federal funds rate between 4.25 to 4.50 percent—a...

After a series of rate cuts, the Bank of Canada decided to leave interest rates unchanged for a third consecutive time this morning, but signalled a willingness to cut rates again if inflation stabilises and the economy continues its underperformance. As was widely expected, the overnight rate was left at 2.75 percent after seven consecutive cuts were delivered between June 2024 and March of this year,...

The world’s biggest economy staged a snappish recovery in the second quarter as tariff front-running effects were unwound, but signs of moderating growth were clearly visible, suggesting that momentum is falling off. Real gross domestic product climbed at a 3-percent seasonally-adjusted annual pace from April through June, reversing a -0.5-percent drop in the first three months of the year, and topping...

The US dollar is gaining as investors turn more cautious ahead of a raft of important economic data releases and central bank decisions through the remainder of the week. In a pattern familiar to aficionados of the ‘dollar smile’ theory, the greenback is climbing on continued outperformance in the US economy, a firming in rate expectations for the Federal Reserve, and a dimming growth outlook in other...

The dollar is outperforming all of its major counterparts after the US reached a trade deal with the European Union, reducing uncertainties facing businesses and investors on both sides of the pond. Treasury yields are ticking higher, equity futures are pointing to modest gains at the open, and measures of implied volatility are pushing higher as traders brace for an intense and tumultuous week. The...

• Dealmaker. Trade optimism supported US equities & USD at end of last week. AUD & NZD drifted a little lower. EUR ticked higher this morning.• US/EU deal. Over weekend US/EU announced a 15% tariff framework. Deal is similar to US/Japan. More ‘stability’ but economic headwinds remain.• Event Radar. Q2 AU CPI due (Weds). In the US this week earnings season continues, Q2 GDP &...

Risk-sensitive assets are looking buoyant this morning as perceived tail risks recede and investors turn more optimistic on the direction of global growth. The US dollar is up slightly, Treasury yields are inching higher, and major American stock indices are climbing ahead of the North American open after series of strong corporate earnings releases in recent days, coupled with a drumbeat of trade...