Global Financial Condition Highlights * Fed on the cusp of rate cuts despite core inflation holding near 3 %, underscoring a stagflation backdrop (weakening labor market vs supply-driven price pressures). * Rising geopolitical tensions—US threats of broad tariffs on China and tougher sanctions on Russia—are shifting sentiment toward risk-off. * Soft PPI
We’re seeing a clear stagflation backdrop: PPI and core CPI prints are in-line but labor-market data disappointed, while University of Michigan sentiment undershot and 5-year inflation expectations jumped. This mix virtually guarantees Fed rate cuts next week despite core inflation sitting above 3%, keeping downward pressure on the US
We’ve seen yesterday’s PPI core at 2.8% YoY (vs. 3.5% expected) and headline at 2.6% YoY (vs. 3.3%), which pointed to a soft CPI—yet today’s headline and core CPI matched forecasts at 3.1% YoY and 0.3% MoM, while initial jobless
We’ve seen a sharp downside surprise in US PPI, with headline printing 2.6% YoY vs. 3.3% expected and core at 2.8% vs. 3.5%. Given the historical 80–90% correlation between PPI and CPI surprises, we’re positioned for tomorrow’s CPI to undershoot, sharply increasing
We continue to see broad dollar weakness driving our macro view. USD/JPY’s opening gap on Japanese political news has already been largely faded, reinforcing our medium-term JPY-positive stance as narrowing rate differentials, lower hedging costs and elevated recession risks underpin safe-haven flows. On EUR/USD, the decisive breach
Global Financial Condition Highlights * US labor data slid sharply (JOLTS, ADP, claims and August NFP at 22 k), signaling a labor-market recession. * Fed is poised to begin rate cuts mid-September (25–50 bps), shifting to a dovish stance. * Geopolitical tensions rising: BRICS coordination, US–EU secondary Russia sanctions, and Japanese
We see mounting evidence of US labor‐market softness, with JOLTS and ISM‐services data underperforming and consensus now looking for sub‐60k NFP this Friday. That weakness is underpinning calls for the Fed to begin cutting rates starting at the Sep 16–17 meeting (25 bp), with at least
We remain in a bearish-dollar regime as our leading indicators point to a softening U.S. labor market (JOLTS below forecasts and goldman’s 60k NFP preview), putting renewed upside pressure on gold toward 3,700 in the coming week and 4,000 on a longer horizon. Political turmoil in
We remain in a broadly bearish U.S. dollar regime, with gold holding onto its up-trend and eyeing 3,600–3,700 amid persistent technical breakouts and renewed Chinese buying each Asian session. Political turmoil in Japan’s ruling party has sparked a short-term USD/JPY spike, but our structural
Global Financial Condition Highlights * US macro data remains soft (Chicago PMI at 41.5 vs. 46 forecast), reinforcing a dovish Fed outlook. * Legal uncertainty over Trump’s tariffs (appeals court ruling “illegal,” pending Supreme Court review) may weigh on the USD via potential policy drift. * Liquidity is light into Labor
Global Financial Condition Highlights * President Trump’s firing of Fed Governor Lisa Cook and renewed tariff threats exacerbate USD weakness and policy uncertainty. * Fed Chair Powell’s Jackson Hole remarks leaned dovish—he signalled openness to a September rate cut—prompting markets to reprice Fed easing. * Geopolitical developments around the
We see gold’s daily chart forming a bullish engulfing and breaking a corrective wedge, and Powell’s surprisingly dovish Jackson Hole remarks—highlighting labour-market risks and opening the door to a September cut—have driven the dollar lower and gold sharply higher. Momentum now targets the 3,500 area,
market outlook
We remain focused on three key themes. First, a very dovish RBNZ decision—with two officials voting for a 50 bp cut—has shifted our bias against the New Zealand dollar, leaving NZD crosses vulnerable. Second, gold’s daily bullish-engulfing pattern and wedge break signal upside, but two looming catalysts—
market outlook
We see geopolitics remaining tense after Ukraine’s outright rejection of Russia’s territorial-freeze proposal, leaving markets without a clear peace catalyst. Gold is consolidating within its corrective wedge, struggling to rally until a decisive political or macro surprise materializes, while equities and oil would likely rally on any unexpected
market outlook
I’ve just returned after a brief two-week hiatus, so here’s a concise update on how markets have evolved in my absence. Global Financial Condition Highlights * U.S. politics is a major driver: Trump’s appointment of Stephen Miran to the Fed signals a push for easier policy and
market outlook
We saw US labor data come in far weaker than expected, with July nonfarm payrolls at 73 K versus the 104 K forecast and May/June both revised down by roughly 230 K combined. Fed funds futures now price a roughly 75 % chance of a 25 bp cut in September,
market outlook
We see a broad dovish tilt from major central banks weighing on bond yields and the U.S. dollar, while equities—led by tech—continue to grind higher on improving growth forecasts. Disinflationary signals from our most authoritative sources have driven 10-year Treasury yields back below 4.00%, supporting rate-sensitive
market outlook
We expect today’s FOMC to lean dovish—two dissenters and Fed guidance toward a September cut should weigh on the USD and lift gold, which remains anchored above the $3,200/oz support level. Secondary 100% tariffs on any country buying Russian goods, plus still-high U.S. trade levies
market outlook
Global Financial Condition Highlights * Trade tensions eased as the US-Japan deal (15% reciprocal tariffs; $550 bn investment) and a 15% US-EU tariff compromise were finalized, removing major sources of uncertainty. * Fed poised to adopt a dovish tone at Wednesday’s FOMC, laying groundwork for a September rate cut; President Trump’
market outlook
We’re seeing a risk-on tilt as US–EU trade talks edge toward a deal, reducing tariff uncertainty. That dynamic is weighing on safe havens—gold may test its recent support just above 3 300 before resuming an uptrend, and the yen is under pressure as BoJ policy stays dovish
market outlook
We’re seeing a clear shift into risk-on mode after the US–Japan trade deal removed significant tariff uncertainty and paved the way for stronger equity, commodity and high-beta FX demand (AUD, NZD, CAD, GBP). At the same time, a dovish Bank of Japan and political turnover in Tokyo are
market outlook
Global Financial Condition Highlights * Fed leadership uncertainty – persistent rumors around Chair Powell’s potential dismissal keep the USD under pressure and bolster safe-haven demand. * Softer US producer inflation – June core PPI undershot forecasts, reinforcing a dovish tilt for monetary policy. * Geopolitical tensions – tariff threats on EU goods and continued Ukraine
market outlook
We continue to view gold as fundamentally bullish amid lingering Fed uncertainty and mixed U.S. data, with the metal holding above its higher-timeframe support trendline and bumping up against near-term resistance around $3,350. While short-term chop may persist without a fresh catalyst, a decisive breakout would reinforce the
market outlook
We saw another dovish PPI print yesterday (core PPI YoY 2.6% vs. 2.7% expected), reinforcing the view that underlying inflation is cooling and limiting the risk of another Fed hike. At the same time, persistent rumors that the Fed Chair could be dismissed remain a key tail risk.