- Fed's Daly: Inflation impact of tariffs hasn't been as large as forecast
- Gold showed some impressive resilience today
- Mexican central bank cuts rates by 25 bps, as expected
- Crude oil futures settle at $64.98. Near unchanged for the day
- Ethereum leads a dive in crypto
- Fed's Logan suggests shifts away from targeting Fed funds rate
- U.S. Treasury auctions off $44 billion of 7 year notes at a high yield of 3.953%
- Trump: I'm going to take the tariff money and give it to farmers
- Fed's Goolsbee: Labor market is largely stable with some mild cooling
- It's a down day in the European equity markets. German DAX the biggest loser.
- Ken Griffin: For corporate America, the weaker dollar is a real tailwind
- It's starting to look like the FX market underestimated the power of fiscal policy
- Copper miners shine as the full impact of the Freeport-McMoran mine disaster becomes clear
- US August existing home sales data out early: 4.00m vs 3.96m expected
- Fed Schmid: Fed is close to meeting its mandate, but policy must look forward
- A tidal wave of better data has the USD moving higher What technical levels are in play?
- The market is re-thinking the Federal Reserve rate cutting path
- US August goods trade balance -85.50 billion vs -95.20 billion expected
- US wholesale inventories for August -0.2% vs +0.2% expected
- US August durable goods +2.9% versus -0.5% expected
- US Q2 final GDP +3.8% vs +3.3% prelim
- US initial jobless claims 218K versus 235K estimate
- investingLive European markets wrap: Currencies muted, stocks stay in retreat
- Fed's Miran: Other policymakers are more concerned about tariffs driving inflation
The US dump of economic data was largely stronger and it helped to set the tone for the market price action:.
- Housing: Existing home sales for August came in at 4.00m vs 3.96m expected, though sales fell -0.2% m/m (exp -1.5%, prior +2.0%). Median prices rose 2.0% y/y, while inventory stood at 1.53m, down -1.3% m/m but up 11.7% y/y. The report underscores that housing may be bottoming, but the rebound looks more U-shaped than V-shaped, especially after yesterday’s unusual 20% surge in new home sales.
- Trade: The advance goods trade balance improved sharply to -85.5B vs -95.2B expected (prior -102.8B). This largely unwinds tariff-related distortions seen earlier in the year, bringing the deficit back in line with the four-year average.
- Inventories: August wholesale inventories fell -0.2% vs +0.2% expected (prior revised to 0.0%). Weakness was led by nondurables (-0.6% vs +0.3% prior), while durables were flat (0.0% vs +0.2% prior). On a yearly basis, wholesale inventories are up just 0.7%, signaling softer restocking momentum.
- Durable goods: A standout beat, with August durable goods orders up +2.9% vs -0.5% expected (prior -2.8% revised -2.7%). Core nondefense capital goods ex-air gained +0.6% vs -0.1% expected, while ex-transport rose +0.4% vs flat expected. This marks a solid rebound after a string of weak prints and points to firmer investment demand.
- GDP: Q2 final GDP was revised sharply higher to +3.8% vs +3.3% prelim (prior Q1 -0.5%). Strength was led by final sales +7.5% vs 6.8% prelim and consumer spending +2.5% vs 1.6% prelim. Core PCE ticked up slightly to +2.6% vs 2.5%. The revision highlights an even stronger consumer underpinning growth.
- Labor: Initial jobless claims fell to 218K vs 235K expected (prior 232K). The 4-week average slipped to 237.5K from 240.2K, while continuing claims eased to 1.926M vs 1.935M expected. Claims have now settled back toward the low end of their 2025 range, reinforcing the picture of a still-resilient labor market.
Bottom line: Today’s data painted a picture of solid U.S. momentum — with GDP and durable goods surprising strongly to the upside, jobless claims signaling labor market resilience, and the trade deficit narrowing. Housing remains a soft spot, with existing sales lagging despite price gains, but overall the U.S. economy looks firmer than expected heading into Q3.
Fed commentary today underscored a cautious but divided committee.
- Dallas Fed Pres. Logan stayed on technical ground, suggesting the Fed should modernize its framework by targeting the repo rate instead of fed funds — a plumbing shift, not a policy one.
- Chicago Fed Pres Goolsbee warned that front-loading cuts could be a mistake, stressing vigilance on inflation even as business investment remains resilient. Schmid described policy as “slightly restrictive and in the right place for now,” backing the recent cut as insurance against labor-market risks but underscoring that decisions must remain forward-looking and data dependent.
- Fed Governor Miran, by contrast, struck a dovish chord, arguing that policy is too tight, tariffs are not fueling inflation, and structural shifts like immigration and tax policy are pushing neutral lower, leaving the economy vulnerable to shocks. Miran the most recent Fed Governor and still Chairman of the White House Council of Economic Advisers (CEA) will likely keep his dovish stance and loyalty to Trump.
- Late in the day, SF Pres Daly echoed a middle ground. She said rates remain modestly restrictive and that a little more cutting will likely be needed over time, but cautioned against going all the way to neutral, calling it too risky. Daly added that the U.S. economy is in okay shape, though the Fed must closely monitor both inflation and the labor market for signs of weakness.
Bottom line: The Fed chorus was mixed — Logan stayed technical, Goolsbee and Schmid leaned cautious on inflation, Daly signaled gradual but limited easing ahead, and Miran pressed for an earlier shift. The policy debate remains centered on how far to cut without risking a resurgence of inflation or leaving the economy exposed to downside shocks - although the data today suggested the slowdown may just be an aberration.
The combination did give yields a boost and sent the USD higher as well.
In the US debt market, the shorter end moved up the most with the 2 year trading at 3.661%, up 6.3 basis points. Since the Fed cut ratess on September 17 and signaled two more cuts between now and year end, the yield has moved up from 3.468% - up around 20 basis points. The 10 year yield today is up 2.5 basis points to 4.171%, and up from 3.995% on September 17th (around 18 basis points).
In the USD, the NZD and the AUD fell the most vs the strong USD. For the NZD it fell -0.88% and the AUD it fell -0.70%. The GBP and the EUR also declined solidly with a fall of -0.80% and -0.64% respectively.
Technically,
EURUSD: The EURUSFD dropped below the 200 bar MA on the 4-hour chart at 1.1702 and later in the day, dipped below the 50% midpoint of the move up from the August 1 low at 1.16549. If the momentum continues lower in the new day, traders will look to focus on a retest of the 100 day MA at 1.1590.
GBPUSD: The GBPUSD fell away from the 50% of the move up from the August 1 low at 1.34322 and below a swing area between 1.33607 to 1.33784. The price is trading near a swing area at 1.33309. That will be a barometer for the new trading day. Sellers are more in control with 1.3362 to 1.3378 as close risk that if holds, would keep the sellers in firm control.
USDJPY: The USDJPY moved above a swing area between 149.12 to 149.17 and broke higher. The price climbed to 149.92, just short of the next target at the natural resistance at 150.00. The high from August 1 extended all the way to 150.886 before reversing hard to the downside helped by weaker employment and would be targeted if the 150.00 level is broken with momentum.
AUDUSD: The AUDUSD fell below the 50% of the move up from the August low at 0.6560 and to the 61.8% at 0.65257. The price stalled at that level and bounced modestly (trading at 0.6539 currently). The next target on more selling will be the 100 day MA at 0.65141. Back on September 2, the low stalled just ahead of that MA and bounced.
NZDUSD: The NZDUSD fell below the 50% of the move up from the April low at 0.58017. That level was also near the low from August 25. The momentum on the break reached to a swing area at 0.5759 and 0.5772. The low reached 0.5758. A move below that level would increase the sellers control and have traders looking toward 0.57268 (61.8% of the same move higher).
