The Morning Update

The U.S. dollar advanced ahead of key economic data, oil prices rose, equity markets were mixed with cautious sentiment, and bond yields edged higher as inflation and manufacturing figures loom. Today’s key U.S. economic releases include weekly jobless claims, durable goods orders, and flash PMI data, all of which will offer fresh signals on labor market strength, business activity, and inflation pressures. U.S.-China trade tensions remain high as China imposed rare earth export controls and the U.S. added tariffs and expanded its Entity List, casting uncertainty over the upcoming Trump-Xi summit. Bitcoin traded around $109,466, rebounding from earlier lows as it consolidates near $110,000 ahead of key U.S. economic data.

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In the news.  Trump’s renewed pressure on Venezuela has fueled speculation of a possible coup or U.S. intervention, though analysts note both options face major political, logistical, and international obstacles. The U.S. military struck two vessels in the Pacific, signaling an apparent expansion of its campaign against alleged drug trafficking in international waters. Israel’s Knesset moved forward with West Bank annexation legislation, despite opposition from the ruling majority party, escalating political tensions domestically and internationally. Marco Rubio warned that Israel’s West Bank annexation efforts risk undermining the Gaza cease-fire and Trump’s peace plan, calling the moves counterproductive and unsupported by the U.S. The EU joined the U.S. in imposing new sanctions on Russia, targeting energy exports, defense suppliers, and financial networks, in a coordinated effort to pressure President Putin to engage in Ukraine peace talks. The EU agreed in principle to use income from Russia’s frozen assets to fund a €140 billion loan for Ukraine’s defense and reconstruction, with broad member support but ongoing legal and liability concerns.

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In currency markets. Japan’s new coalition plans significant fiscal spending to support growth but signals it will not revive Abenomics-style policies, focusing instead on targeted investments and structural reforms, leaving the yen largely stable amid cautious investor sentiment. The CNY edged up 0.07%, the MYR gained 0.02%, while the THB slipped 0.24% versus the USD, reflecting modest currency shifts amid trade tensions and regional market sentiment. AUD/USD declined 0.15% and the NZD/USD fell 0.22%, pressured by a stronger U.S. dollar and cautious market sentiment ahead of key economic data. the MXN gained 0.18%, the ZAR rose 0.12%, while the PLN and CZK edged lower by 0.09% and 0.05% versus the USD, reflecting mixed investor sentiment and regional economic factors.

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In commodity markets. Trump targeted Russia’s top oil companies with fresh sanctions, escalating economic pressure on Moscow and contributing to a rise of 4% in global oil prices. After U.S. sanctions, India plans to cut Russian crude imports, which made up about 36% of its total, potentially halting purchases by year-end. Gold rose 0.79% per ounce and silver gained 1.31%, rebounding from yesterday’s sharp declines as safe-haven demand returned amid global economic uncertainties. Wheat fell 0.22%, soybeans rose 0.36%, and coffee slipped 0.42%, as markets reacted to shifting supply-demand conditions, ongoing export activity, and persistent volatility across agricultural commodities.

USD/CAD edged higher as the Canadian dollar softened following a 0.8% decline in August retail sales, reflecting ongoing market volatility and cautious investor sentiment amid global economic and geopolitical developments.

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EUR/CAD drifted lower as the Canadian dollar showed resilience despite softer retail sales, with market sentiment influenced by broader economic and geopolitical developments.

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EUR/USD slipped as the euro remained pressured by a stronger U.S. dollar, despite stable Eurozone inflation at 2.2% and steady economic growth forecasts.

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GBPEUR edged lower as the pound weakened amid softer UK economic signals, while the euro remained supported by steady Eurozone growth and inflation.

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GBPUSD weakened as UK inflation remained steady at 3.8%, while a strong U.S. dollar and cautious market sentiment added downward pressure.

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