By Spec FX Market Insights
US equities extended their winning streak overnight, driven by inflation data that matched expectations and reinforced the market’s growing confidence in a September Federal Reserve rate cut.
The Nasdaq led the rally with a 1.4% gain, followed by the S&P 500 up 1.13%, while the Dow Jones added 1.1%. Both the S&P and Nasdaq closed at fresh record highs, underscoring renewed risk appetite across markets.
CPI Reinforces Rate Cut Expectations
The latest CPI print landed exactly in line with forecasts, taking the heat off the US dollar and prompting traders to reprice the Fed’s policy outlook. The US Dollar Index (DXY) fell 0.43% to 98.10, reflecting reduced demand for the greenback as rate cut bets solidified.
In the Treasury market, moves were more measured — the 2-year yield slipped 3.7bps to 3.731%, while the 10-year yield edged up just 0.4bps to 4.289%, indicating a cautious but steady stance among fixed-income investors.
Commodities: Oil Under Pressure, Gold Rangebound
Crude oil prices retreated as concerns over softer US demand combined with geopolitical undercurrents from last week’s Trump–Putin meeting.
- Brent crude: -0.72% to $66.12
- WTI: -1.32% to $63.06
Gold remained rangebound, closing marginally higher at $3,346.64/oz, as traders awaited fresh macro catalysts.
AUD in Focus: Jobs Data Ahead
The Australian dollar remains in the spotlight following the Reserve Bank of Australia’s widely expected 25bp cut, which lowered the cash rate to 3.60%.
While yesterday’s Wage Price Index print met expectations at 0.8% q/q, attention now shifts to Thursday’s employment report. Market consensus expects a +25k gain in jobs and a drop in the unemployment rate from 4.3% to 4.2%. Any deviation from these forecasts could trigger sharp moves in the AUD, especially given heightened volatility in recent data.
Adding to the risk, large option expiries are due today, potentially amplifying market swings if liquidity thins.
What’s Next?
The global macro calendar remains light today, with no tier-1 releases from Europe and muted Asian session flows aside from AUD-related moves. Later in the US session, focus will turn to Crude Oil Inventories, which could influence energy prices into the end of summer.
Additionally, remarks from Fed officials Barkin and Goolsbee will be closely monitored for clues on inflation dynamics and September policy intentions.
Spec FX View:
Markets remain data-dependent, but for now, risk sentiment has regained the upper hand. Traders should remain alert to shifts in central bank communication and high-impact data releases, as these could quickly alter the current bullish narrative.