As the US markets remain inactive, scarce volatility has allowed for a resurgence in appetite for risk-linked assets at the start of a data-packed week. Expectations of a Fed rate cut in September continue to be well-supported.
Key Highlights for Tuesday, September 3:
The US Dollar Index (DXY) saw a slight retreat while holding above the 101.00 level. Key data releases for September 3 include the ISM Manufacturing PMI, final S&P Global Manufacturing PMI, Construction Spending, and the RCM/TIPP Economic Optimism Index.
EUR/USD saw a reversal from recent lows, testing the 1.1080 level on a weakened Greenback. ECB speakers Jochnick, Nagel, and Buch are scheduled to speak on September 3.
GBP/USD followed suit with a bounce from recent highs near 1.3100, with the BRC Retail Sales Monitor expected on September 3.
USD/JPY climbed to two-week highs above 147.00 on Yen depreciation, with the final Jibun Bank Services PMI release on the Japanese calendar for September 4.
AUD/USD approached the key 0.6800 mark on Dollar weakness, with Australian Current Account figures set for release on September 3.
WTI prices saw a small recovery above $74.00 per barrel on supply concerns from Libya, partially recovering from Friday’s pullback.
Gold prices dipped below $2,500 per ounce troy following Friday’s decline, while silver prices hit three-week lows near $28.30 due to negative Chinese business activity data.
Analysis:
In summary, the current market conditions are influenced by the inactivity in US markets, leading to a renewed interest in risk assets. Expectations of a Fed rate cut in September continue to drive sentiment. Key data releases and central bank speeches will provide further guidance for traders in the coming days. Supply concerns in oil markets and weak economic data from China are also impacting commodity prices. Investors should stay informed and monitor these developments closely to make informed decisions regarding their portfolios.