Articles

• Prior month -17
• Services index -11 vs +5 last month
• Manufacturing shipments -15 vs -21 last month

Other details:

• Employment xx versus -5 last month
• Wages xx versus +15 last month
• Prices paid xx versus 3.00 last month
• Prices received xx versus 1.31 last month
• New orders xx versus -23 last month
• Backlog of orders xx versus -20 last month
• Capacity utilization xx versus -13 last month
• Capital expenditures xx versus -9 last month
• Services expenditure xx versus -14 last month

Fifth District manufacturing activity slowed in August, according to the
most recent survey from the Federal Reserve Bank of Richmond. The
composite manufacturing index edged down from −17 in July to −19 in
August. Of its three component indexes, shipments rose from −21 to −15,
new orders decreased from −23 to −26, and employment fell from −5 to
−15. Firms
grew less optimistic about local business conditions, as the index
decreased from −21 to −24. The index for future local business
conditions fell notably from 7 to −18 in August, with fewer than 10
percent of respondents expecting conditions to improve in the next six
months. However, the future indexes for shipments and new orders
remained solidly in positive territory, suggesting that firms continued
to expect improvements in these areas over the next six months.The
vendor lead time index decreased slightly into negative territory. On
balance, firms continued to report declining backlogs in August as that
index remained negative.The average growth rate of prices paid
decreased in August. The average growth rate of prices received
increased somewhat, although it remained relatively low. Firms expected
little change in price growth over the next 12 months.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Shares of AI high-flyer Super Micro Computer are down 10% in the pre-market after a short report from Hindenburg Research alleged “accounting manipulation, sibling self-dealing and sanctions evasion.”

The company has a $35 billion market cap and soared from $250 at the start of the year to as high as $1229 as it becamse something of an AI meme stock. It closed at $562 yesterday.

“Our 3-month investigation, which included interviews with former employees & experts as well as a review of litigation & customs records, found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures & customer issues,” Hindenburg says.

Read the report here.

This article was written by Adam Button at www.forexlive.com.

• Prior was +0.3%
• Prices 6.5% y/y vs +6.0% expected
• Prior was 6.8% y/y

FHFA data:

• -0.1% m/m vs +0.0% prior
• Prices +5.1% y/y vs +5.7% prior

These two data sets are telling a somewhat-different story as the 20-city numbers stay strong while the national numbers from the FHFA slacken.

In the latest round of earnings from home builders, there was some positive commentary around trends in late July and early August as rates came down.

This article was written by Adam Button at www.forexlive.com.

Today, European sovereign yields are breaking out of a consolidation pattern in a sign of waning demand for safety.

The charts speak for themselves as it’s a consistent move from west to east.

UK 10s:

French 10s:

Italian 10s are up 8 bps today in the largest jump since June:

Bunds have broken out of the recent consolidation pattern:

US 10s are still near the lower end of the range but are up 4.5 bps today in the second day of selling. Today we also get $69 billion in 2s for sale, followed by 5s and 7s in the subsequent two days.

There isn’t a good explanation for what is driving these moves as the only data we got today was German GfK consumer sentiment at -22.0 compared to -18.2 expected. I think the calendar could be a factor on rebalancing flows or some other quirk.

Keep a close eye on Treasuries today.

This article was written by Adam Button at www.forexlive.com.

• As long as disinflation path converges to 2% before end of 2025, then I’m comfortable with gradual policy easing.

There is nothing new here. The market sees a 100% chance of a cut in September and a total of 64 bps of easing by year-end.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Things to look out for in today’s Consumer Confidence data
• Lavrov condemns Ukraine’s demands and warns West against ‘playing with fire’
• UK CBI Distributive Trades -27 vs -43 prior
• Markets still leaning mostly risk on as we head deeper into the session
• UK PM Starmer warns of ‘painful’ October budget,
• Two Libyan oilfields shut and another at lowest output
• BofA is bulilsh on the AUD due to differentials and a weaker USD
• UBS hikes US recession odds to 25% from prior 20%
• Today’s FX option expiry levels for the NY cut
• EURUSD has been following yield differentials higher
• What are the main events for today?
• Equity futures mostly green across the board this morning
• German detailed YY GDP 0.0% vs -0.1% expected
• German Consumer sentiment -22 vs -18.2 expected
• Swedish PPI YY for July -0.1 vs 0.8% prior
• BofA likes the USD lower and GBP higher
• Goldman maintains recommendation to stay long GBPCHF
• Fed officials keep door to 50bp cuts open

Markets:

• GBP leads, USD lags on the day
• European equities flat; S&P 500 futures down 0.05%
• US 10-year yields up 3 bps to
  3.848%
• Gold
  down 0.30% to $2,510
• WTI
  crude down 0.57% to $76.98
• Bitcoin
  down 0.61% to $62,438

It was another
quiet session with no market moving data releases. The only notable news was
UK’s PM Starmer warning of “painful” budget in October which hints to tax
rises, although he promised not to raise them for working people.

In the
markets, there’s been very little movement. The most notable moves have been in
the bond market where long-term Treasury yields have been rising faster than
short-term ones. Although that could be just daily noise, it’s something to
keep an eye on as the Fed cuts into a resilient economy (at least for now).

The focus
will now switch to the American session where the labour market data in the US
Consumer Confidence report will take the centre stage.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

With all the focus on the labour market right now, there are a few data points within today’s Consumer Confidence report that could get some attention and worth being aware of.

1. Jobs hard to find (overlaying this with the unemployment rate should explain why it’s useful and why it would matter going into next week’s jobs data).

2. Ratio between Jobs plentiful and jobs not so plentiful (a big drop in this one can get attention as well)

3. Ratio of Present situation versus forward expectations (this has in past cycles offered a fairly decent trigger for recessionary conditions – but please keep in mind this has not been a regular cycle so pinch of salt, but the current macro context makes this interesting)

Unfortunately these aren’t part of the usual calendar release which is usually only the headline number, so it will require some digging in the report. But big surprises in these ones could get more attention today and worth keeping on the radar.

This article was written by Arno V Venter at www.forexlive.com.

• Russian Foreign Minister Lavrov on Ukraine’s demands that the West let it strike deep into Russia: “This is blackmail.”
• Russian Foreign Minister Lavrov: Russia has its own nuclear weapons doctrine, which is being adjusted.
• Russian Foreign Minister Lavrov: Playing with fire is very dangerous for those who are entrusted with nuclear weapons in the West.

This article was written by Arno V Venter at www.forexlive.com.

GB CBI Distributive Trades -27 vs -43 prior

This article was written by Arno V Venter at www.forexlive.com.

As we head deeper into the quiet Tuesday session, markets are still leaning mostly risk on across major asset classes.

Bonds: yields have continued to push higher (bonds lower) in a follow-through from yesterday’s bounce, with 10-year treasury yields trading close to 3.85%.

Equity futures: green across the board (apart from the ASX200 which is still the underperformer), with the Hang Seng and Nikkei both up over 1% so far.

FX: The safe haven JPY continues to be the biggest lower with the USD the second weakest, while the GBP is the strongest and closely followed by the NZD and AUD as well.

Commodities: Have mostly been choppy this morning, with WTI, silver and platinum flip flopping between positive and negative this morning. While copper is comfortably in the lead and natgas the clear underperformer.

Catalysts remain thing for the price action we are seeing though so as always be careful out there.

This article was written by Arno V Venter at www.forexlive.com.

• UK PM Starmer: The budget coming in October will be painful.
• UK PM Starmer: Those with the broadest shoulders should pay the heaviest burden.
• UK PM Starmer: I will have to make big asks of the public, to accept short term pain for long term good.

Pound has seen some very marginal weakness on the news, but still the strongest currency on the session.

This article was written by Arno V Venter at www.forexlive.com.

Two oilfields in southeast Libya shut down, another oilfield reduced production to lowest capacity – engineers.

This comes on the back of yesterday’s announcement of the force majeure.

Oil has been trading mostly rangebound in today’s session after yesterday’s solid run higher.

This article was written by Arno V Venter at www.forexlive.com.