Headlines:
- Dollar holds steady as traders eye US data in second half of the week
- US, Japan reportedly in final stages of talks to bring down auto tariffs
- Switzerland August CPI +0.2% vs +0.2% y/y expected
- Eurozone July retail sales -0.5% vs -0.2% m/m expected
- Germany August construction PMI 46.0 vs 46.3 prior
- UK August construction PMI 45.5 vs 45.0 expected
- US August Challenger layoffs 85.979k vs 62.075k prior
- Ifo institute slashes German economic growth forecasts in latest outlook update
- German economy set to only grow by 0.1% in 2025 - IfW
Markets:
- USD leads, AUD lags on the day
- European equities higher; S&P 500 futures up 0.2%
- US 10-year yields down 2.3 bps to 4.187%
- Gold down 0.4% to $3,545.09
- WTI crude down 1.0% to $63.33
- Bitcoin down 1.2% to $110,877
It was a slower session as markets are settling back to a more tentative mood awaiting US data before making the next move.
The fact that the bond market has also eased off the pressure is helping with broader market sentiment at least. 30-year yields in the US are backing off further after clipping the 5% mark yesterday, now seen at 4.86%.
With bond yields feeling more contained, that is not seeing much other notable movements in other markets.
The dollar is holding steadier across the board with light changes among major currencies mostly. EUR/USD is down 0.1% to 1.1645, mired by large option expiries between 1.1600 to 1.1700 today. Meanwhile, USD/JPY is up just 0.2% to 148.31 and not doing all too much as well during the session.
The commodity currencies are down slightly with AUD/USD lower by 0.4% to 0.6515 but overall it isn't too significant in the context of this week so far.
In the equities space, we are seeing stocks nudge a little higher again. European indices are posting modest gains while US futures are also resting a little higher with tech shares leading the way. All eyes though will be on US data to reaffirm risk sentiment towards the latter stages this week.
As for commodities, we are seeing gold cool off after hitting fresh record highs in the past two days. But price is still holding comfortably above $3,500 so that's still a strong of confidence on the part of buyers to keep the momentum up in anticipation of the US jobs report tomorrow.
