The USD is mixed to kickstart the US trading day, with the USD higher vs the EUR (+0.09%) and the JPY (+0.22%), and modestly lower vs the GBP (-0.14%). The AUDUSD is lower after the RBA rate cut (-0.45% – so the USD is higher). In the video above, I take a look at the 3 major currency pairs – the EURUSD, USDPY and GBPUSD – from a technical perspective, and also look at the AUDUSD after the rate decision. Kickstart your day, by understanding what the price action is saying technically. It is a driver for investor sentiment after all.
The US CPI data will be released at 8:30 AM and will be an influence in the price action of course. Headline CPI is expected to rise by 0.2% versus 0.3% last month. The core measure is expected to rise by 0.3% versus 0.2%. Year on year the headline is expected at 2.8%, while the core is expected at 3.0% up from 2.9%. Traders and analysts will be buying the goods inflation which would be indicative of tariff -related inflation (things like furniture and clothing and appliances). Overall, however, over 60% of the CPI is services with:
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Shelter (primarily housing and rents): ~32–34%, with owner’s equivalent rent alone around 22%
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Healthcare services: Roughly 7% of the CPI, though this underestimates broader health expenditures (higher in PCE).
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Core goods (goods excluding food and energy): About 20% of CPI, with new and used cars comprising ~3.5% and ~4%, respectively.
Meanwhile, overnight (for US traders at least), the RBA cut rates by 25 bps to 3.60% as expected, with moderating inflation and an uncertain outlook the catalyst. The decision was unanimous, with the bank prioritizing price stability and full employment. Inflation is expected to trend toward the 2–3% target range, and labour market conditions have eased slightly, though remain tight. The RBA sees risks from US tariffs and global policy shifts, and acknowledges lags in the effects of past policy moves.
In its quarterly outlook, the RBA projects core inflation around 2.5% through 2027, GDP growth slowing to ~2.0%, and unemployment steady near 4.3%. Long-run productivity growth was downgraded to 0.7%, while inflation and GDP forecasts were trimmed slightly. The bank sees balanced supply and demand through 2027, stable labour markets, and minimal impact from global trade uncertainty so far
Bank of America’s July Consumer Checkpoint report showed that total credit and debit card spending per household rose 1.8% year-over-year, the fastest growth rate since January. Seasonally adjusted spending per household increased by 0.6% month-over-month, up from 0.4% previously.
A widening gap emerged between the wage and spending growth of lower-income households and other groups. Lower-income households saw their after-tax wage growth slow to just 1.3% YoY in July, while higher-income households experienced an acceleration to 3.2% YoY.
Overall, consumers remain in good financial health with elevated deposits and continued borrowing capacity, though signs of financial stress are beginning to appear among lower-income households
President Trump and Russian’s Putin are scheduled to meet on August 15, 2025, in Alaska with the focus on peace in Ukraine. Meanwhile Russia is saying that an attack on Defense ministry official was foiled and Zelenskiy posted that they see Russian army is not preparing to end the war, but are making preparations that are indicative of a new offensive. HMMMM. I get the idea, that this meeting is just a smokescreen.
In Germany, the August ZEW survey showed current conditions falling to -68.6 (vs. -65.0 expected, prior -59.5) and the outlook dropping to 34.7 (vs. 39.8 expected, prior 52.7). ZEW attributed the decline to disappointment over the US-EU trade deal, with sentiment hit particularly in the chemical and pharmaceutical sectors.The US July NFIB small business optimism index rose to 100.3 (vs. 98.6 expected, prior 98.6), driven by improved views on business conditions and expansion prospects. However, the Uncertainty Index jumped eight points to 97. Labor quality concerns increased, with 21% citing it as their top problem — now the leading issue for small businesses. NFIB’s chief economist noted optimism despite high uncertainty, with hopes for more clarity in coming months from permanent tax deductions and finalized trade policy
US stocks are little changed ahead of the CPI with the Dow up 32 points, the S&P up 4.5 points and the NASDAQ index up 25 points.
Looking at the US yields, they are higher with the two-year up 1.8 basis points at 3.772%, and the 10 year yield up one point basis points to 4.290%.
This article was written by Greg Michalowski at investinglive.com.