Gold (XAU/USD) maintains a bullish bias around $4,400, supported by a weaker US Dollar (USD) and fading expectations of further interest rate hikes by the Federal Reserve (Fed).
TD Securities expects the UK labour market to remain soft but stable in June, with employment rising 100k on a three‑month basis and unemployment edging down to 4.7%. Headline average weekly earnings are forecast to slow to 4.0%, while ex‑bonus pay holds at 3.4%.
The US Dollar Index (DXY) extends losses for the third consecutive day on Monday, with bears testing levels at two-month lows below 99.40 during the European session.
West Texas Intermediate (WTI) US Oil advances on Monday and trades around $82.10 at the time of writing, up 0.70% on the day. Oil prices remain supported by the deadlock between the United States (US) and Iran, which keeps concerns about Oil flows through the Strait of Hormuz elevated.
Brown Brothers Harriman’s (BBH) Elias Haddad expects the Riksbank to keep its policy rate at 1.75% for a seventh consecutive meeting while leaving the door open to a later hike as inflation runs above projections.
Dow Jones futures decline by 0.12%, trading around 53,740 during European hours on Monday. Meanwhile, S&P 500 futures gain, hovering around 7,820, and Nasdaq 100 futures surge by 0.5%, trading near 30,290.
Commerzbank’s Tatha Ghose notes that the Central Bank of the Republic of Türkiye's (CBRT) survey shows market participants revising inflation forecasts higher and expecting only gradual rate cuts from current effective levels.
Silver prices (XAG/USD) rose on Monday, according to FXStreet data. Silver trades at $65.46 per troy ounce, up 1.17% from the $64.70 it cost on Friday.
MUFG’s Derek Halpenny and Lee Hardman report that Japanese government bond yields are rising despite weaker-than-expected GDP, as markets focus on prospects for further Bank of Japan rate hikes.
DBS Group Research’s Philip Wee argues that the US Dollar (USD) is losing momentum as markets reassess United States (US)-Japan intervention, shifting Bank of Japan (BoJ) and Federal Reserve (Fed) expectations, and rising US fiscal risks.
TD Securities’ James Rossiter argues that the Federal Reserve is leading a structural shift away from detailed forward guidance and explicit reaction functions, forcing markets to infer policy from incoming data.
Chris Turner at ING notes that a busier United Kingdom (UK) data calendar, including jobs, wages and July Consumer Price Index (CPI), could challenge the 55bp of Bank of England (BoE) tightening still priced in.
The EUR/USD pair builds on last week's bounce from the vicinity of the 1.1500 psychological mark and gains strong follow-through positive traction on Monday.
Brown Brothers Harriman’s (BBH) Elias Haddad expects Canada’s July Consumer Price Index (CPI) to keep core inflation below 2%, reinforcing an extended Bank of Canada (BoC) pause.
Commerzbank’s Tatha Ghose reports that Polish headline and core inflation have re-accelerated, with seasonally adjusted monthly rates now clearly above target. This makes earlier signals from National Bank of Poland (NBP) Governor Adam Glapinski about possible rate cuts obsolete.
The British Pound (GBP) extends gains for the second consecutive day on Monday, as investors cut back US Dollar (USD) long positions, amid a dovish repricing of the Federal Reserve’s (Fed) monetary policy.
United Overseas Bank’s (UOB) Quek Ser Leang observes that USD/JPY price action remains choppy, with the pair closing around 159.30 after a dip to 158.58. Intraday direction is unclear, with trading expected between 158.80 and 159.60.
MUFG’s Derek Halpenny and Lee Hardman note that weaker United States (US) data and lower short-term Treasury yields are undermining US Dollar (USD) support, even as the US Dollar Index (DXY) holds above its 200-day moving average near 99.200.
AUD/JPY extends its gains for the second successive day, trading around 113.20 during the European hours on Monday.
ING analysts Ewa Manthey and Warren Patterson note that ICE Brent is trading just below $90/bbl, supported by Middle East tensions and attacks on vessels in the Strait of Hormuz.
Brown Brothers Harriman’s (BBH) Elias Haddad argues that upcoming Australian wage and labour data are unlikely to shift Reserve Bank of Australia pricing, with futures only partly discounting one final hike.
Commerzbank’s Volkmar Baur argues that softer New Zealand inflation data make a September rate hike by the Reserve Bank of New Zealand (RBNZ) unlikely after July’s move.
The New Zealand Dollar (NZD) keeps crawling higher against a weaker US Dollar (USD) with price action reaching the 0.5920 area for the first time since early June. Kiwi Dollar bulls did not flinch after a set of downbeat data from China on Monday and kept buying the pair, with the US Dollar depreci
The AUD/USD pair attracts strong follow-through buying at the start of a new week and surges past the 0.7100 mark, hitting a fresh high since June 5 as sustained US Dollar (USD) selling offsets China's weak macro data dump.
United Overseas Bank’s (UOB) Quek Ser Leang notes GBP/USD invalidated a recent neutral call by breaking above 1.3555 and closing higher near 1.3532. Intraday, the British Pound (GBP) may extend toward 1.3570, with 1.3600 as firm resistance.
Canada’s July Consumer Price Index (CPI) figures will be the focus of attention when published on Monday.
OCBC’s Sim Moh Siong and Christopher Wong highlight that September Bank of Japan (BoJ) hike odds have risen sharply, but the Japanese Yen (JPY) has reacted only modestly. They argue a sustained Yen recovery likely needs clearer commitment to faster policy normalisation.
The Euro (EUR) holds minor gains against the British Pound (GBP) for the third consecutive day on Monday, favoured by European Central Bank (ECB) - Bank of England (BoE) monetary policy divergence.
The Indian Rupee (INR) remains stronger against the US Dollar (USD) on Monday after two days of losses, with the USD/INR pair trading around 95.60 at the time of writing.
Gold (XAU/USD) maintains its bullish tone through the first half of the European session and currently trades around $4,400, up for the second straight day. The commodity, however, remains below the highest level since June 5, touched last Thursday, amid a mixed fundamental backdrop.
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