The USD is at the highs to start the day vs most of the major currencies, but still relatively little changed. In the video above, I take a technical look at the EURUSD, USDJPY and GBPUSD and outline the bias, the targets and the risks for each.
This week, the key events begin early Tuesday in the US with the Reserve Bank of Australia’s policy decision at 12:30 A.M. ET (Aug 12), where the cash rate is expected to decline to 3.60% from 3.85%. This will be accompanied by the RBA’s Monetary Policy Statement, rate statement, and press conference. Australia’s data flow continues later in the week with the Wage Price Index on Tue, Aug 12 at 9:30 P.m. ET, forecast to rise 0.8% q/q, followed by labor market figures on Wed, Aug 13 at 9:30 p.m. ET, with employment change expected at 25.3K (vs 2.0K last month) and the unemployment rate declining to 4.2% from 4.3%.
In the U.S., the focus this week is on inflation, spending, and sentiment. July CPI is released Tue, Aug 12 at 8:30 a.m. ET, with headline CPI forecast at +0.2% m/m (core +0.3%) and the y/y rate rising to 2.8%(from 2.7%). Producer prices follow on Thu, Aug 14 at 8:30 a.m. ET, with headline PPI expected to rise by 0.2% and core PPI also up 0.2%. At the same time, weekly jobless claims are projected at 225K (vs 226K last week). Retail sales are out Fri, Aug 15 at 8:30 a.m. ET, with headline sales seen up 0.5% m/m (vs 0.6% last) and core +0.3% (vs 0.5%). The week wraps with the University of Michigan’s preliminary consumer sentiment on Fri at 10:00 a.m. ET, expected at 61.9, with inflation expectations at 4.5%.
From the U.K., the key release is GDP m/m on Thu, Aug 14 at 2:00 a.m. ET, forecast to rebound 0.2% in July after a 0.1% decline in June, offering an early read on third-quarter growth momentum.
Over the weekend, Federal Reserve Governor Michelle Bowman, who holds a permanent vote on the FOMC and a dove, signaled support for three rate cuts by the end of 2025, citing a sharp deterioration in the U.S. labor market. Speaking at a bankers’ conference in Colorado Springs, she pointed to significant downward revisions in recent nonfarm payrolls — May revised from 144,000 to 19,000 (-125,000) and June from 147,000 to 14,000 (-133,000) — as evidence of weakening economic momentum. Bowman argued that the apparent slowdown in growth and a less dynamic labor market outweigh the risks of higher inflation, making it appropriate to move from a moderately restrictive stance toward neutral. She expects to back a cut at each of the Fed’s remaining meetings this year — September 16–17, October 28–29, and December 9–10 — aligning with recent dovish signals from other Fed officials including Daly, Waller, Williams, and Kashkari.
Also over the weekend , Nvidia and AMD have reached an unprecedented agreement with the Trump administration to give the U.S. government 15% of revenues from certain chip sales in China in exchange for export licences. Under the deal, Nvidia will share 15% of revenue from H20 chip sales, while AMD will provide the same percentage from MI308 chip sales to China. The arrangement, confirmed by a U.S. official, was a condition for licences granted last week, shortly after Nvidia CEO Jensen Huang met with President Trump. The administration has not yet determined how the funds will be used. Export control experts note that no U.S. company has previously agreed to share revenues to secure export approval, marking this as a first-of-its-kind arrangement aligned with the administration’s broader strategy of tying market access to measures that generate U.S. jobs and revenue. Wow. Who would have thought the US goverment would have a revenue sharing deal with US companies? Has a dam just been broken?
Later this week Trump and Putin will meet in Alaska to try and end the war in Ukraine. The proposal for Ukraine to cede land to Russia is a contentious point of discussion. Ukraine President Zelenskiy said over the weekend that Ukraine could not violate its constitution on the territorial issues, adding that “Ukrainians will not gift their land to the occupiers.”
Shares of the two companies are down in premarket trading. Nvidia shares are trained down $1.01 or 0.55% at $181.67. Meanwhile AMD shares are down $2.90 or -1.68% at $169.86.
- Dow industrial average is up 126 point
- S&P index is up 13.55 points
- NASDAQ index is up 38 points
in the US debt market yields are down modestly with the longer end lower:
- 2-year yield 3.760%, +0.2 basis points
- 5-year yield 3.820%, -0.7 basis points
- 10 year yield 4.269%, -1.4 basis points
- 30 year yield 4.831%, -2.3 basis points
This article was written by Greg Michalowski at investinglive.com.