Daily Market Outlook by Trader's Way

[katetrades]

Forex Major Currencies Outlook (Aug 17 – Aug 21, 2026)

FOMC minutes, preliminary August PMI data from Eurozone and the UK, inflation data from the UK and Canada, Q2 GDP from Japan, employment data from the UK and Australia as well as industrial production and retail sales data from China will highlight the busy week ahead of us.

USD

July inflation report came in line with expectations with headline CPI ticking down to 3.4% y/y from 3.5% y/y in June while core CPI ticked down to 2.5% y/y from 2.6% y/y the previous month. Energy prices dropped 1.5% m/m with gasoline showing a 2.9% m/m decline. Airfares were the biggest contributor to the reading rising 2.2% m/m, due to higher jet fuel prices, and leading to a 0.1% m/m rise in headline CPI, as expected.. On the core side we had a 0.2% m/m increase as expected with shelter, the biggest component of CPI, increasing 0.1% m/m and 3.2% y/y. Core CPI services ex shelter rose 0.2% m/m after a small decline in June due to medical services rising 0.4% m/m vs -0.1% m/m the previous month. Supercore came in at 0.277% m/m, which is over 3% annualized, but it came in at 1.92% y/y signalling success. Inflation is slowly dripping towards the Fed’s target which will take away the need for rate hikes.

Retail sales report for the month of July showed weaknesses across the board as headline number came in at -0.6% m/m after a 0.2% m/m in June. The biggest drop was seen in nonstore retailers, online, which fell 2.2% m/m and could be attributed to the fact that Amazon Prime Day was last month, followed by a drop of 1.8% m/m in motor vehicle and parts dealers. Growth was seen in clothing stores at a tune of 1.9% m/m. Control group, used for measuring of GDP, came in at -0.4% m/m. Ex autos and ex autos and gas categories declined by 0.3% m/m and 0.2% m/m respectively. One positive is that food services and drinking places, a good proxy for discretionary spending, rose 0.5% m/m. Fiscal deficit continued to expand and is now at $432bn in July, almost 50% higher than $291bn seen in July of last year.

The yield on a 10y Treasury started the week at 4.65%, rose to 4.74% and finished the week at around 4.68%. The yield on 2y Treasury started the week at 4.21%, rose to 4.27% and finished the week at around 4.17%. Spread between 2y and 10y Treasuries started the week at 45bp and finished the week at 51bp. After the CPI report where odds were 50/50 FedWatchTool sees the probability of a no change at a September meeting at around 66% while probability of a 25bp rate hike is at around 34%. WTI prices did not move as much as in previous weeks and finished the week at around $82.50. Gold’s rise stalled at around $4450 and finished the week at around $4375. AI trade has returned in full force and caused S&P to reach new ATH.

This week we will have minutes from July FOMC meeting. We had three dissenters at this meeting so it will be valuable to get more information in the discussion that was going on.

Important news for USD:

Wednesday:​

• FOMC Minutes​

EUR

Final inflation numbers from Germany for the month of July saw headline CPI remain at 2.8% y/y as preliminary reported, jumping from 2.3% y/y in June due to surge in energy prices. Core CPI, on the other hand, ticked down to 2.4% y/y. Services inflation came in at 2.9% y/y, down from 3.1% y/y the previous month, but still elevated. French reading also saw confirmation of preliminary print of 2.1% y/y but core reading jumped to 1.3% y/y from 1% y/y in June. Italy and Spain inflation came in higher than preliminary reported.

This week we will have preliminary August PMI data.

Important news for EUR:

Friday:​

• Manufacturing PMI (Eurozone, Germany, France)​
• Services PMI (Eurozone, Germany, France)​
• Composite PMI (Eurozone, Germany, France)​

GBP

Preliminary reading of Q2 GDP showed a growth of 0.4% q/q, in line with expectations, with a 1.2% y/y growth vs 1.1% y/y as expected. The report shows that growth was led by services sector which rose 0.5% followed by construction with 0.3% growth. Real final household consumption rose by 0.3% while government spending fell by the same amount. Business investment grew by 1.7% while both export and import volumes grew by 0.5%. June growth surprised to the upside, coming in at 0.3%, and that helped push Q2 reading.

This week we will have employment and inflation data with latter expected to increase due to higher energy prices as well as preliminary August PMI data.

Important news for GBP:

Tuesday:​

• Payrolls Change​
• Unemployment Rate​

Wednesday:​

• CPI​

Friday:​

• Manufacturing PMI​
• Services PMI​
• Composite PMI​

AUD

RBA has left its cash rate at 4.35% as was widely expected. The decision was unanimous. The statement shows that although effects from the Middle East conflict were less than expected inflation still remains too high. This year’s three rate hikes are tightening financial conditions and it is reflected in gradual slowing of consumer spending. Additionally, as a result of previous rate hikes, the economy is slowing down. The statement also warns that period of prolonged uncertainty may also lower the growth. Inflation is not expected to come down to midpoint of targeted range until late 2027 and there are upside risks to that projection. The board will continue monitoring developments and are standing ready to further raise cash rate if necessary.

RBA Governor Bullock reiterated that there are upside risks to inflation and added that they are prepared to deliver further rate hikes if data calls for it. She clarified that there was no talk of rate cuts at this meeting. The discussion was whether to hold or hike rates which gives it a more hawkish tone as there was no discussion about hiking at the previous meeting.

Chinese inflation data for the month of July showed CPI at 0.5% y/y vs 0.8% y/y as expected and down from 1% y/y in June. The report shows a plunge in transportation fuel to just 0.8% y/y from 15.% y/y the previous month. The weakness is also seen in food and rent categories. PPI rose 3.5% y/y, slower than 3.9% y/y market has expected and down from 4.1% y/y seen in June.

This week we will have employment data from Australia as well as industrial production and retail sales data from China.

Important news for AUD:

Monday:​

• Industrial Production (China)​
• Retail Sales (China)​

Thursday:​

• Employment Change​
• Unemployment Rate​

NZD

RBNZ’s Q3 survey of inflation expectations survey showed 1-year expectations for Q3 of 2026 at 2.6%, down from 3.4% seen in Q2. The 2-year expectations are at 2.3%, down from 2.5% seen in the previous quarter. Easing of inflation pressures lowers the chance of another rate hike in September, but it does not rule it out completely, and Kiwi is suffering as a result of it.

CAD

June building permits growth surged 18.5% m/m after declining 3% m/m in May. The surge was led by non-residential building permits, 37.5%, of which institutional permits surged 90.2%. Residential permits rose at a healthy pace of 6.3% m/m. CAD has gained strength and pushed USDCAD below the 1.39 level.

This week we will have July inflation data expected to decline further.

Important news for CAD:

Monday:​

• CPI​

JPY

BoJ Summary of Opinion from July showed that policymakers are increasingly worrisome of inflation overshooting their target. They have noted weak JPY, leading to higher import prices, strong AI demand and high energy costs caused by the US – Iran war as the main reasons for higher inflation risks. This report indicates that we should see greater chance of a September hike although markets are not yet pricing it in as JPY continues to weaken.

This week we will have preliminary Q2 GDP data.

Important news for JPY:

Monday:​

• GDP​

CHF

SNB total sight deposits for the week ending August 7 came in at CHF462.4bn vs CHF465.2bn the previous week. This makes it fifth consecutive week of declines as SNB stopped injecting liquidity into the markets as they are satisfied with where Swissy is heading. First estimate of Q2 GDP show that economy grew at a healthy pace of 1.5% q/q.​

 

[katetrades]

Forex Major Currencies Outlook (Aug 24 – Aug 28, 2026)

Q2 GDP from the US and Canada, PCE inflation, Q2 retail sales from New Zealand and Jackson Hole Symposium will highlight the week ahead of us. We will also get Nvidia earnings on Wednesday and U.S. Treasury Secretary Scott Bessent will hold a press conference on Monday discussing sanctions against Iran and touching on long-dated Treasury bond yields.

USD

MoU between US and Iran has expired and there was more aggressive rhetoric coming from both sides as there is no good will to extend the ceasefire. There were talks that Iran seized UAE oil tanker while US threatened to bomb Oman in retaliation.

US Treasury issued a statement saying that they will be increasing “by at least double, the size of liquidity support buyback operations for longer-dated nominal coupon securities (the 10-year to 20-year sector and the 20-year to 30-year sector). The current maximum size of $2 billion per operation will be at least $4 billion per operation. This change is effective September 9, 2026 and will be in effect for the remainder of this refunding quarter (through November 4, 2026). Treasury will provide more information about future buyback sizes at the next Quarterly Refunding, scheduled for November 4, 2026.”

The main idea of the move is to inject additional liquidity into the market to fight surging yields on the long-end. This was an unscheduled announcement indicating that US Treasury is not liking the level of yields in the long-end and it is signalling to the market that it is closely watching yield levels and could potentially put limit on them, which markets are already dubbing “Bessent put”. Those buybacks of longer-dated bonds will have to be financed with additional bills issuance. This will result in higher yields on the short-end and lower yields in the long-end and essentially a flatter yield curve.

FOMC minutes were not as hawkish as feared given the fact that three members dissented and voted for a rate hike. The language showed that “many” stated that interest rates will have to be higher if inflation does not come down but “most” opted for no change in rates at the July meeting. Risks to employment and growth are seen as “skewed to the downside” while risks to inflation are seen as “skewed to the upside”.

The yield on a 10y Treasury started the week at 4.69%, rose to 4.75% and finished the week at around 4.74%. The yield on 2y Treasury started the week at 4.18%, rose to 4.25% and finished the week at around 4.24%. The yield on a 30y Treasury reached new 30-year high of 5.32%and has declined after Treasury's unscheduled buyback announcement. Spread between 2y and 10y Treasuries started the week at 52bp and finished the week at 50bp. FedWatchTool sees the probability of a no change at a September meeting at around 65% while probability of a 25bp rate hike is at around 35%. WTI prices not moved straight up finishing the week above $87. Gold surged after announced treasury buybacks and reached $4600..

This week we will have second reading of Q2 GDP, Fed’s preferred inflation measure PCE and Jackson Hole symposium. The topic for the event is Financial Innovation: Implications for Payments and Policy. It is not economic one and it will not spur a debate regarding monetary policy but it is still worth paying attention for any hints.

Important news for USD:

Wednesday:​

• GDP​
• PCE​

Thursday-Friday:​

• Jackson Hole Economic Symposium​

EUR

ECB Chief Economist Philip Lane stated in an interview that inflation could remain around 3% for the remainder of the year due to situation in the Middle East and added that it all depends on how the situation around US – Iran war will develop. Markets are fully pricing September rate hike and Lane distanced itself from talking about future rate hikes reiterating that the bank remains data-dependent and will make decisions on meeting-by-meeting basis.

Final CPI reading for the month of July saw both headline and core numbers unchanged from preliminary readings at 2.9% y/y and 2.5% y/y and both tick up from 2.8% y/y and 2.4% y/y in June. The report shows that services contributed most to inflation with 1.55% followed by energy with 0.94%. Increase in energy prices was the main culprit for inflation ticking higher as it printed 10.3% y/y vs 8.5% y/y the previous month. Services inflation ticked up to 3.3% y/y from 3.2% y/y in June.

Preliminary PMI data for the month of August saw further outperformance by manufacturing sector. Manufacturing rose to 52.8 from 51.9 in July beating expectations of a 51.8 print. German reading was particularly strong with a 54 print. The report notes stock building as the main reason for increase in manufacturing activity but points out that there are signs of increase in demand fir AI-related tech goods. Services sector was surprisingly unchanged at 51.7 while both German and French readings contracted. Increase in tourism spending is helping boost services sector. There were easing price pressures which will be welcomed by the ECB but the report notes that further rate hikes cannot be ruled out. Composite has ticked up to 52.1 from 52 in July.

GBP

Payrolls change for the month of July saw economy drop another 13k jobs after losing the same amount of jobs in June. This makes it six consecutive months of job losses. The report notes that wholesale and retail sector registered the largest annual decrease in payroll employment, losing 75k jobs, while the administrative and support services sector posted the biggest increase, adding 63k jobs. June ILO unemployment rate was unchanged at 4.9%. Average earnings including bonus declined to 4.1% 3m/y from 4.4% 3m/y seen in previous three months. The discrepancy between private and public sector wages is getting more pronounced as former decreased to 3.7% 3m/y while latter increased to 6.2% 3m/y.

July inflation report saw headline CPI rise 2.9% y/y, as expected, from 2.6% y/y in June. The main cause for overall increase in prices were energy prices which led to higher household energy bills. Food inflation came down and printed 1.3% y/y, a well-behaved reading. Core CPI was unchanged at 2.6% y/y while markets were expecting a tick down to 2.5% y/y. Services eased to 3.4% y/y from 3.6% y/y the previous month. Combination of weaker payrolls data and inflation coming in as expected will not push BoE towards a rate hike and will only lower its chances.

Preliminary August PMI data saw manufacturing decline to 51.5, as expected from 51.9 while services jumped to 52.8 from 52.1 and markets expected it to decline to 51.8. Composite was thus lifted to 52.5 from 52.2 in July. The report notes that tech investment is propping the economy and at the same time job losses are moderating. US – Iran war still causes a ton of uncertainties which will keep BoE on hold but with hawkish rhetoric.

AUD

Employment report for the month of July saw economy lose 15.8k jobs vs adding 15k jobs as expected. The unemployment rate ticked up to 4.5%, highest since 2021, while markets were expecting it to stay at 4.4%. At the same time, participation rate ticked down to 66.9%. On the positive side, June reading was revised higher to 80.3k jobs with composition of jobs changing in favor of more full-time jobs. Composition of jobs in July saw economy add 15.8k full-time jobs while part-time jobs declined by 32.1k. The rise in unemployment rate will exert downward pressure on AUD but positive revisions and job composition will keep it sustained. RBA Deputy Governor Hauser stated that inflation is too high and he sees upside risks to it. He added that monetary policy will have to tighten further in order to reduce demand in the economy and bring inflation down. Hauser clarified that he does not see recession, merely a slowdown. His hawkish comments will keep AUD supported but after jobs report it may lead to another pause by RBA.

Economic data from China for the month of July were very soft. Industrial production rose 4.5% y/y after 5.3% y/y in June while retail sales rose only 0.6% y/y accentuating struggles with domestic demand. Fixed Asset Investments continued their decline and posted a fourth month of negative prints coming in at -6.7% y/y after a -5.7% y/y print the previous month while the unemployment rate rose to 5.2% from 5% in June. Official statistics department blamed weak data on bad weather but there are issues mounting in the data of the past months that are completely unrelated to the weather. These numbers are showing that economy is screaming for some stimulus.

NZD

July services PMI printed 50.6, a small decline from 50.9 in June, thus making it a second month in expansion. New orders led the way with inventories and activity/sales following and all above the 50 level while employment still struggles in contraction. Electronic card sales, covering almost 70% of total retail sales, rebounded in July and showed growth of 1.3% m/m and 3.4% y/y.

This week we will have Q2 retail sales data.

Important news for NZD:

Monday:​

• Retail Sales​

CAD

July inflation report saw headline CPI rise to 3% y/y from 2.8% y/y in June while markets were expecting a 2.9% y/y print. Gasoline prices surged 3.6% m/m and it reflected in an increase of transportation prices which were also impacted by the World Cup. Air transportation also saw surge in prices due to higher energy costs. Additionally, all three core measures saw increases with median printing 2% y/y, trim 1.9% y/y and common 2.7% y/y. Travel accommodations saw biggest drop in prices of 4% m/m and there was also a drop in rent prices of 0.5% m/m.

This week we will have Q2 GDP data.

Important news for CAD:

Friday:​

• GDP​

JPY

Preliminary reading of Q2 GDP saw a big miss as it came in at 0.3% q/q and 1.1% y/y vs 0.5% q/q and 2% y/y as expected and down from 0.5% q/q and 1.8% y/y in the previous quarter. There was no growth in private consumption while business investment declined 1.2% q/q. The main driver of growth was external demand as exports outpaced imports. This print will complicate the picture for BoJ as with economy not as strong as expected they will not be able to easily raise rates.

Inflation report for the month of July saw prices picking up and inflation creeping back towards the 2% target as headline and ex fresh food, energy CPI both rose 1.9% y/y from 1.7% y/y in June. Core CPI, ex fresh food, printed 1.8% y/y, up from 1.6% y/y the previous month. Increase in headline number is due to higher energy prices caused by the US – Iran war. On the other hand, surge in wholesale prices to 7.2% y/y was led by higher electricity charges. Services inflation ticked up to 1.2% y/y and since this is closely followed by the BoJ it increases chances of a September rate hike.

Preliminary August PMI data saw further improvements in the economy. Manufacturing rose to 55.1 from 54.5 in July on the back of another surge in new export orders driven by relentless demand for AI related components. Employment continued to increase in sector while input costs eased but selling prices continued to increase rapidly indicating that companies are passing costs to consumers at a faster pace. Services PMI rose to 52.3 from 51.2 the previous month and thus lifted composite PMI to 53.4 from 52.7 in July.

CHF

SNB total sight deposits for the week ending August 14 came in at CHF458.8bn vs CHF462.4bn the previous week. Sixth week of declining deposits as SNB moved to the sidelines and let market dictate Swissy strength.​

 

[katetrades]

Forex Major Currencies Outlook (Aug 31 – Sep 4, 2026)

RBNZ and BoC meetings, NFP, inflation data from the Eurozone and Switzerland coupled with employment data from Canada, Q2 GDP data from Australia and Switzerland and official PMI data from China will highlight very busy week ahead of us.

USD

US – Canada trade negotiations did not manage to produce any kind of deal and they led to 50% tariffs on $20bn of Canadian goods. In response to the collapse in negotiations, Canadian Prime Minister Mark Carney announced dollar-for-dollar retaliation starting September 8 stating that they are now in a state of “economic war”. There was a lot of bad blood between sides with each blaming the other for failed negotiations.

US Treasury Secretary Scott Bessent announced new set of economic sanctions on Iran. However, they were much softer than feared and are described as a “warning shot”. He added that government can use TGA to buyback Treasuries which is not fundamentally different from using bills to fund buybacks. Stanley Druckenmiller, legendary investor, criticized buyback program stating that “The long-term Treasury yield is the most important price in the world.” He also added that there were no genuine market dysfunctions calling for this move and that when government is defending the level it never works as markets keep testing government’s resolve to defend it.

July PCE data saw both headline and core readings unchanged at 3.7% y/y and 3.3% y/y respectively. Monthly figures were for 0.2% for both headline and for core, Second estimate of Q2 GDP was unchanged from advanced reading and showed economy grow by 1.5% annualized. Contribution of personal consumption was increased to 2.31pp while other three components were drag on GDP with net exports deducting 1.14pp from the GDP as imports surged on the back of high demand for foreign AI infrastructure products.

Fed Chairman Warsh stated in his speech in Jackson Hole that inflation numbers are "more concerning" and that if there are no signs that underlying inflation is moving towards objective they will have more work to do. He added that he cannot describe financial conditions as restrictive. Warsh clarified that even though CPI and PCE readings were better than expected they are still not pointing to meaningful improvement in underlying inflation trends. Such hawkish words from Fed Chairman pushed USD and a chance of 25bp rate hike in September higher and pulled stocks and gold down.

The yield on a 10y Treasury started the week at 4.74%, rose to 4.74% and finished the week at around 4.73%. The yield on 2y Treasury started the week at 4.24%, rose to 4.36% and finished the week at around 4.34%. Spread between 2y and 10y Treasuries started the week at 50bp and finished the week at 39bp. FedWatchTool sees the probability of a no change at a September meeting at around 42% while probability of a 25bp rate hike is at around 58%.

This week we will have ISM PMI data and NFP on Friday. Headline number is expected to come around 50k while the unemployment rate is seen ticking up to 4.2%.

Important news for USD:

Tuesday:​

• ISM Manufacturing PMI​

Thursday:​

• ISM Services PMI​

Friday:​

• NFP
• Unemployment Rate

EUR

Final Q2 GDP from Germany was revised up to 0.3% q/q and 1% y/y from 0.2% q/q and 0.9% y/y as preliminary reported. The report shows that the biggest contributor to grow was external demand as exports rose 2% q/q. Household consumption rose 0.1% while gross fixed capital investment declined 0.2%. French final Q2 GDP was revised down and it now shows no growth q/q vs 0.2% q/q as preliminary reported, thus making France barely avoid technical recession as Q1 print was also revised down and now shows a decline of 0.2% q/q, and 0.5% y/y vs 0.7% y/y as preliminary reported.

ECB policymaker and member of the Governing Council Isabel Schnabel stated that bank will need to act and raise rates in order to prevent any possible second-round effects as inflation is expected to stay above the 2% target for an extended period. She also pointed out that economic growth is picking up which could could keep inflation higher. There is a chance that at September meeting there will be talks about upside risks to growth. Schnabel is a well-known hawk so her comments carry the usual hawkish tone.

Preliminary August inflation print from France saw headline CPI rise to 2.4% y/y as expected from 2.1% y/y in July on the back of rising energy prices. Spanish reading surged to 4.3% y/y from 3.6% y/y the previous month, higher than 4.2% y/y as expected. The increase was led by rise in energy and food prices while core CPI ticked down to 2.9% y/y.

This week we will have preliminary August inflation data expected to climb back over 3% on the back of higher energy prices.

Important news for EUR:

Tuesday:​

• CPI​

GBP

Pound had a quiet week as there were no news from the UK. Currency was left to market’s devices and it lost ground against the majors with biggest drops seen against AUD. That pair was pushed down on the back of higher than expected inflation in Australia.

AUD

Minutes from the RBA August meeting showed board unanimous in their decision to keep rates unchanged at 4.35%. There was a discussion about pre-emptive rate hike as members see inflation risks skewed to the upside. July CPI saw inflation easing to 3.5% y/y from 3.8% y/y in June but markets were bracing for a 3.2% y/y print and were negatively surprised that prices grew by 1% m/m, more than 0.8% m/m expected increase. This unexpected inflation print raises the chances that RBA will act in September. Household spending for the month of July rose 1.1% m/m, smashing expectations of a 0.4% m/m growth and it now sits at 7% y/y. This adds to the probability of a September hike but it is toned down with unexpected drop of 3.6% q/q in CAPEX for Q2. This is a big miss as expectations were for it to come flat and a huge drop from 6.5% q/q growth seen in the first quarter of the year.

This week we will have Q2 GDP data from Australia and official August PMI data from China.

Important news for AUD:

Monday:​

• Manufacturing PMI (China)​
• Non-Manufacturing PMI (China)​
• Composite PMI (China)​

Wednesday:​

• GDP​

NZD

Retail sales for Q2 showed a drop of 0.5% q/q while an increase of 0.1% q/q was expected. This comes after the Q1 print was revised up to show a 1% q/q growth. The report shows that biggest declines were seen in fuel, accommodation as well as food and beverage services while biggest increase was seen in sales of electrical and electronic goods. Retail sales rose 3.3% y/y, down from 4.5% y/y as expected.

This week we will have RBNZ meeting. Reuters poll shows 90% of economists expecting a rate hike. Given that elections are on November 7 it will be interesting to see whether the bank will keep their hawkishness or they will tone down their rhetoric and signal pause. The reason for change in tone would be that Labour party, leading in polls, is actively advocating for bringing back full employment as a part of RBNZ’s dual mandate. Since the unemployment rate is trending higher that will make it hard for bank to remain hawkish.

Important news for NZD:

Wednesday:​

• RBNZ Interest Rate Decision​

CAD

Q2 GDP saw economy rebound from very weak Q1 at 0.8% q/q, as expected and 3.3% annualised vs 3.4% annualised as expected. The economy grew by 0.3% m/m in June, same as in May and it helped quarterly reading come in line with expectations. July projections sees economy coming in flat.

This week we will have BoC meeting and employment data. Given the escalation in tariffs with USA we cannot see BoC making any changes to the rate.

Important news for CAD:

Wednesday:​

• BoC Interest Rate Decision​

Friday:

• Employment Change
• Unemployment Rate

JPY

BoJ Deputy Governor Himino, most hawkish member, stated that rate hikes now are necessary in order to avoid sudden and bigger moves in the future as inflation stays above the 2% target. He warned that inflation above the 2% target would have negative impact on the economy. Himino added that weaker yen is contributing to higher imported inflation which makes overall inflation move higher faster. His talk puts greater probability of a 25bp rate hike in September although he declined to commit to it.

August inflation data for Tokyo area saw increases across all three measures. Headline CPI ticked up to 1.9% y/y from 1.8% y/y in July. Ex fresh food category, core CPI, ticked up to 1.8% y/y from 1.7% y/y the previous month while ex fresh food, energy, “core-core” CPI, rose to targeted 2% y/y from 1.8% y/y in July. Most notably wholesale inflation surged 7.2% y/y which reflects cost pressures caused by US – Iran war. Analysts warn that increases in wholesale prices slowly feed into inflation prints so this sharp rise puts upward pressure on inflation. This is another data point pushing odds up for a September hike.

CHF

SNB total sight deposits for the week ending August 21 came in at CHF463.7bn vs CHF458.8bn the previous week. After unscheduled announcement of Treasury buybacks SNB pumped more liquidity into the markets through raising sight deposits.

This week we will have inflation and Q2 GDP data.

Important news for CHF:

Thursday:​

• CPI​
• GDP​

 

[katetrades]

Forex Major Currencies Outlook (Sep 7 – Sep 11, 2026)

ECB meeting as well as August PPI and CPI data from the US will highlight the week ahead of us. Please note that markets will be closed in the US on Monday for Labor day so liquidity will be lower.

USD

US has struck Larak Island and in retaliation Iran fired missiles from four different launching sites towards the Straight of Hormuz. Tensions are brewing and moving towards further escalation and WTI gaped on the market open to above $86/bbl. Treasury Secretary Bessent spoke at the G20 meeting and stated that Iran is lashing out militarily since they are losing economically as sanctions imposed on them are creating serious pressure. On the domestic economy he stated that the plan is to grow their way out of the debt. Joh Ternus has taken over as Apple CEO from September 1. Presidents Trump and Xi will meet in Washington on September 24. Fed Governor Waller stated that if CPI data shows that process of disinflation has stalled he is open to vote for rate hikes in September. On the other hand, if it shows that inflation eases he is open to leave rates unchanged. Waller refrained from giving exact numbers but if the three-month inflation number gets to 2.8% he would be satisfied with that.

ISM manufacturing PMI for the month of August eased to 54.6 from 55.6 in July missing the expectations of 55.2. The report shows drops in employment, production, backlog of orders and new orders, although all remain in expansion with production running near the 60 level. Prices paid was unchanged and remains very elevated at over 70 warning that inflation pressures are not budging. ISM services PMI rose to 55.4 in August from 54.1 in July stronger than 54.2 that markets were expecting. Business activity and new orders continued to improve, both rising above the 60 level while employment improved a bit but is still in contraction territory. Prices paid rose further pushing further from the 70 level and putting inflation pressures front and center.

August NFP smashed expectations with headline number showing economy added 162k jobs vs 56k as was expected. On top of almost triple more jobs than expected there were positive revisions to the previous two months of 55k jobs. The unemployment rate stayed at 4.1% while participation rate moved up to 61.6% from 61.4% in July. Wages moved higher as they rose 0.3% m/m and 3.1% y/y. Majority of added jobs were in private sector, private payrolls grew by 127k while government provided 35k jobs. Leisure and hospitality added 62k jobs followed by private education & healthcare with 29k while construction added 22k and manufacturing added 16k. This is a very strong report and will only amplify importance of next week’s CPI for the future of monetary policy.

The yield on a 10y Treasury started the week at 4.72%, rose to 4.82% and finished the week at around 4.78%. The yield on 2y Treasury started the week at 4.35%, rose to 4.42% and finished the week at around 4.39%. The yield on a 30y Treasury reached new 30-year high of 5.32%. Spread between 2y and 10y Treasuries started the week at 37bp and finished the week at 42bp. FedWatchTool sees the probability of a no change at a September meeting at around 40% while probability of a 25bp rate hike is at around 60%. WTI prices surged during the week as US – Iran war escalated as US conducted attacks on Iranian tankers and stayed above $90 for the remainder of the week.

This week we will have PPI and CPI data. Comments from Governor Warsh put more importance on CPI print but given that PPI comes out before CPI its importance cannot be overstated. Using data from PPI and CPI we can estimate with great accuracy what Fed’s preferred inflation measure PCE will be.

Important news for USD:

Thursday:​

• PPI

Friday:​

• CPI​

EUR

Preliminary August inflation report saw headline CPI rise to 3.3% y/y from 2.9% y/y in July on the back of surge in energy prices which rose 14.3% y/y and 2.9% m/m. Core CPI eased to 2.4% y/y from 2.5% y/y the previous month as services inflation came down to 3%. So far there are no signs of second-round effects from higher energy prices but the longer they stay elevated the greater the chance that those second-round effects appear. German CPI saw prices rise 2.9% y/y vs 2.8% y/y in July, but slower than 3% y/y increase as expected. The increase was led by energy prices which rose 10.3% y/y. Additionally, core print was unchanged at 2.4% y/y. Another positive is that services inflation declined for the second consecutive month and is now at 2.8% y/y.

Final August manufacturing PMI came in at 52.7 vs 52.8 as preliminary reported, up from 51.9 in July on the back of German reading which was revised up to 54.3. Output and new orders continued to increase while input and output prices continued to ease. Italian and Spanish manufacturing PMIs dipped into contraction. Services PMI was revised slightly down to 51.6 from 51.7 as preliminary reported as well as it was the previous month. The report shows that output and new orders continued to expand and were joined by employment, first expansionary reading this year. On the inflation side, input prices eased a bit while output prices rose again signalling that inflationary pressures are moving from companies to consumers.

This week we will have ECB meeting. Rate hike is fully priced in so investors will be looking for clues about future rate hike path. Additionally, we will get new projections and given Schnabel’s hawkish rhetoric as well as Q2 GDP surprising to the upside, we may see upward revision to growth.

Important news for EUR:

Thursday:​

• ECB Interest Rate Decision​

GBP

August final manufacturing PMI was revised up to 51.7 from 51.5 thus showing a smaller decline from 51.9 in July. The report shows that, unlike in the Eurozone, output and new orders growth slowed down. It adds that “Business confidence rose to a six-month high and job creation was the strongest for two years.” Services PMI was revised to 52.5 from 52.8 but it still shows improvement from 52.1 the previous month. Output and new orders grew moderately, pace of decline in employment slowed down while both input costs and output prices rose thus flashing warning signals about mounting inflation pressures. Composite was unchanged at 52.5, up from 52.2 in July.

AUD

Q2 GDP showed a growth of 0.4% q/q and 2.1% y/y beating expectations of 0.3% q/q and 1.8% y/y growth. Household consumption grew by 0.4% and added 0.2pp to the GDP. Net trade contributed 0.1pp to the growth as export rose 0.8% while imports rose 0.5%. There was no contribution from private investment as business investment declined 0.5%. This stronger than expected print increased chances of September hike while markets have fully priced in November hike.

Official August PMI data from China showed manufacturing improve to 49.8 from 49.2 in July, beating expectations of a 49.6 print, but still staying in contraction. Production, new orders and new export orders all returned to expansion though, Non-Manufacturing stayed at 49 with new orders continuing to drop further into contraction while new export orders and employment stayed unchanged but deep in contraction. It is of note that services are mainly catering to domestic Chinese population so they are pointing to weakening of domestic demand. Composite was lifted up by manufacturing print to 49.5 from 49.3 the previous month.

NZD

August business confidence came in at 53.6, down from 56.1 in July. The report showed improvements in export and employment intentions while profit expectations and investment intentions declined. Inflation figures are troublesome as pricing intentions and cost expectations both rising with wage growth expectations ticking up. Inflation expectations for 1-year ahead moved up to 3.26% from 3.14% the previous month indicating that price pressures are persistent and that there is still work to be done by the RBNZ.

RBNZ has raised its Official Cash Rate (OCR) by 25bp to 2.75% as was widely expected. The board stated that gradual hikes now avoid the need for bigger rate hikes in the future. Four out of seven committee members, including governor Breman, see upside risks to inflation as inflation is expected to return to 1-3% targeted range by mid-2027. All members agreed that downside risks to activity were significant. Additionally, they agreed that further rate hikes may be needed depending on the balance of risks. OCR projections were left unchanged. Governor Breman stated that monetary policy remains accommodative and that further rate hikes are likely. She did not comment on the pace or path of future rate hikes. Breman added that economic growth is expected to strengthen adding that the Committee can bring down inflation without disturbing economic growth. There are hawkish tones in the statement and governor speech but they are less hawkish than markets expected and NZD has weakened. Markets now see December as the next hike meeting.

CAD

BoC has kept rate unchanged at 2.25% as widely expected but surprised markets with a hawkish rhetoric. The statement says that “upside risks to the Bank’s inflation forecast have increased.” There were improvements in the labor market with the unemployment rate coming down and in overall growth. Members have noted increase in uncertainty due to US tariffs and threats of further actions which pose significant risks to sustainability of economic recovery. Governing council will asses the inflation outlook and is prepared to adjust monetary policy as needed. The decision could be characterized as hawkish hold as upside risks to inflation and downside risks to growth have been stressed.

After three strong employment reports August report was a disappointment as economy lost 41.7k jobs while markets expected it to add 15k jobs. The unemployment rate stayed at 6.4% while participation rate ticked higher. Wages continued to slow and rose 2% y/y compared to 3% y/y in July thus lowering pressures on inflation. Full-time jobs saw losses of 35.9k while part time jobs lost 5.8k.

JPY

Preliminary industrial production data for the month of July saw 0.1% m/m and 4.1% y/y growth thus beating expectations of a -0.5% m/m and 3% y/y print. Additionally, for the same month, retail sales rebounded after unexpected drop in June and grew by 2.4% m/m and 4% y/y. Final manufacturing PMI for the month of August was revised down to 54.9 from 55.1 as preliminary reported but it still shows improvement from 54.5 in July on the back of surge in new orders due to very strong semiconductor and AI related component demand. Final services were revised up to 52.5 from 52.3 rising further from 51.2 in July as new businesses, output and employment continue to rise. Composite printed 53.5, up from 52.7 the previous month.

Yield on a 10y JGB has crossed the 3% level during the week, thus making it highest since 1996, only to drop back below it towards the end of the week. JPY has strengthened on better economic data as well as talks about September rate hike and repatriation of funds into JGBs now that they offer more attractive yield for investors.

CHF

SNB total sight deposits for the week ending August 28 came in at CHF457.3bn vs CHF463.7bn the previous week. After previous week’s sudden increase sight deposits have resumed their downward trajectory and reached new four month low as SNB keeps injecting liquidity into the markets. Swiss Bankers Associations survey showed that all of surveyed members expect no change in rate in 2026 while 60% of them see no change to rate in 2027 as well.

August inflation report saw headline number rise to 0.8% y/y from 0.4% y/y in July on the back of higher energy prices. Core CPI ticked up to 0.4% y/y from 0.3% y/y the previous month. Q2 GDP saw economy grow by 1.5% q/q and 2.8% y/y with former being highest quarterly growth since 2021 and latter highest since 2022.​

 

[katetrades]

Forex Major Currencies Outlook (Sep 14 – Sep 18, 2026)

Fed, BoE, BoJ meetings, inflation data from the UK and Canada, retail sales from the US and China, along with industrial production data from China, Q2 GDP from New Zealand and employment data from the UK will highlight the busy week ahead of us.

USD

US and Iran pushed their hostilities to another level with US hitting Kharg Island and Iran retaliating by hitting US military bases in Jordan as well as US destroyers in the Straight of Hormuz. At the same time tensions between Houthis and Saudis are on the rise as rumours about Houthis hitting Saudi pipeline are circulating. As a result, WTI has crossed $100/bbl while Brent crude oil passed psychologically important price of $105/bbl. US escalated number of goods that will be hit by 50% tariffs and moved to ban imports of alcohol, dairies, motorcycles and certain autos as a response to Canada’s retaliatory tariffs.

US Treasury Secretary Bessent poked markets by saying “I am the house now” and dared traders to bet against JPY. Many people have found out how dangerous it is to get in conflict with markets so this is a high risk move. Treasury buyback was announced to the tune of $6bn. This is three times more than before, but less than what markets were looking for, which was around $!0bn. US President Trump promised $5000 pay check to every US adult if Republicans make a full sweep in the midterms.

August CPI report showed headline number at 3.4% y/y, as expected and unchanged from July, rising 0.4% m/m also as expected. Core reading ticked down to 2.4% y/y, as expected, from 2.5% y/y the previous month but monthly figure came in at 0.3% vs 0.2% as expected. Supercore has surged 0.5% m/m vs 0.2% m/m in July and 3.022% y/y vs 2.843% y/y the previous month. This report pushes chances of September rate hike to over 80%.

The yield on a 10y Treasury started the week at 4.79%, rose to new high for the year of 4.98% and finished the week at around 4.92%. The yield on 2y Treasury started the week at 4.37%, also rose to new high for the year of 4.60% and finished the week at around 4.60%. The yield on a 30y Treasury reached 5.39%, yet another new high for the year and level not seen since 2007. Spread between 2y and 10y Treasuries started the week at 41bp and finished the week at 34bp. FedWatchTool sees the probability of a no change at a September meeting at around 14% while probability of a 25bp rate hike is at around 86%. WTI prices surged during the week as US – Iran war escalated and price of WTI almost got to the $105/bbl.

This week we will have Fed meeting and August retail sales report. We will get new SEP and dot plot but Chairman Warsh will abstain from delivering his forecast as he stated several times.

Important news for USD:

Wednesday:​

• Fed Interest Rate Decision
• Retail Sales

EUR

ECB has raised its key interest rates by 25bp as was widely expected thus brining deposit rate to 2.50%. New projections show upward revisions to growth and inflation. GDP is now seen at 0.9% for 2026, 1.4% for 2027 and 1.5% for 2028 while inflation is unchanged for 2026 at 3% but revised up for 2027 and 2028 to 2.5% and 2.1% respectively. The statement shows that Middle East conflict continues to push prices higher and that inflation will stay elevated for prolonged period of time. The outlook remains highly uncertain with risks to the upside for inflation and downside for the growth. Governing Council will continue basing its decisions on inflation outlook and is not pre-committing to any rate path.

ECB President Lagarde stated in her opening statement that economy is proving to be resilient and that resilience will continue into Q3. She characterized labour market as robust but warned that growth in employment continues to slow. Lagarde stated that there was no discussion about future rate hike path and added that today’s decision was unanimous and a “no-brainer” adding that inflation has been lower recently compared to what was expected, particularly food inflation. Lagarde’s press conference added to the notion that this was a hawkish hike and although they are not pre-committing October looks as likely for another rate hike.

AfD, a German right wing political party won elections in Saxony-Anhalt. The population of Saxony-Anhalt is 2.3 million so the victory there does not have implications on a federal government but they have made steps to challenge powers in Berlin. Additionally, it shows declining popularity of current Chancellor Merz and his ruling party CDU.

GBP

BoE Governor Bailey stated that risks to inflation are to the upside as energy prices push prices up and food prices seem tilted upwards as well. He sees labor market as softening and adds that increase in youth unemployment is a concern. July GDP surprised to the upside with 0.4% m/m growth while expectations were for it to come flat. IT sector was the biggest contributor, adding almost half to the total GDP, with services output overall increasing by 0.4% m/m.

This week we will have employment data, inflation data, expected to move above the 3%, and BoE meeting. Expectations are for no change to rate with a 6-3 vote.

Important news for GBP:

Tuesday:​

• Payrolls Change​
• Unemployment Rate​

Wednesday:​

• CPI​

Thursday:​

• BoE Interest Rate Decision​

AUD

RBA Deputy Governor Hauser stated that inflation represents “one big problem” for the central bank and added that it is a result of a three-headed monster: the Middle East crisis, an AI-driven global boom, and weak domestic supply capacity. He stated that question lingers whether they have done enough in fight against the inflation and markets interpreted it as a nod to the September hike.

August inflation data saw CPI rise to 0.8% y/y, as expected, from 0.5% y/y in July. Energy prices were the main culprit for increase in inflation followed by high tech prices. On the other hand, food prices and rents were drag on inflation. PPI rose to 3.8% y/y from 3.5% y/y the previous month and stronger than 3.7% y/y as expected. Coal and crude oil prices were biggest contributors.

This week we will have economic activity data from China.

Important news for AUD:

Tuesday:​

• Industrial Production (China)​
• Retail Sales (China)​

NZD

August manufacturing PMI came in at 53.1, slowing down from 54.3 in July but still healthy in expansion and above long-term average of 52.5. Kiwi had a tough first part of the week as risk off mood in the markets caused it to decline against all of the majors.

This week we will have Q2 GDP data.

Important news for NZD:

Thursday:​

• GDP​

CAD

CAD has had a sideways week as it was influenced by factors outside of its influence such as overall risk off mood in the markets and US – Iran developments. It managed to gain ground against Swissy but lost ground against other majors.

This week we will have inflation data. BoC has flagged upside risks to inflation so if we get a hotter than expected print that will increase chances of a December hike and consequently strengthen the CAD.

Important news for CAD:

Monday:​

• CPI​

JPY

Final Q2 GDP reading saw it revised up to 0.4% q/q and 1.4% annualized from 0.3% q/q and 1.1% annualized as preliminary reported. Private consumption stayed flat while business investment was revised up now showing a 0.9% decline compared to 1% decline as preliminary reported. Net export contribution was unchanged at 0.5pp. July wages showed average cash earnings rising 4.7% y/y after an upwardly revised 4% y/y growth in June. Additionally, real wages rose for the seventh consecutive months and printed 2.4% y/y growth for the biggest real wages increase since May of 2021. These two data points indicate that rate hike next week is a certainty.

This week we will have BoJ meeting. Rate hike is almost fully priced in, lifting rate to 1.25%, so the attention will be focused on the rate path.

Important news for JPY:

Friday:​

• BoJ Interest Rate Decision​

CHF

SNB total sight deposits for the week ending September 4 came in at CHF452.6bn vs CHF457.3bn the previous week. Deposits continue their downward trajectory and reach lowest levels in seven months as SNB keeps pumping liquidity into the markets to influence Swissy’s strength.​