Global markets face renewed uncertainty as weak US non-farm payrolls and rising unemployment stoke recession fears, prompting calls for Fed rate cuts while Trump finalises candidates for Fed Chair. Trade tensions intensified with new Russia sanctions, tariff exemptions on metals, and stricter terms for Japan, while OPEC+ raised output.
KEY INDICATORS
US labour market
August non-farm payrolls grew far below expectations, while June data was revised into negative territory for the first time since 2020.
The unemployment rate rose to a four-year high.
White House adviser Hassett predicted upward revisions but questioned the reliability of the current data.
Senate leader Schumer cited weak jobs data to push for overturning Trump’s tariffs.
Trump, Labour Secretary Dremer, and Treasury Secretary Bessent all criticised the Fed for delaying rate cuts.
Bessent warned that revised 2024 employment figures may reduce jobs by 800,000.
Commodities and dollar
Dollar Index fell 0.54% to 97.74, erasing most of last week’s gains.
US Treasury yields declined: 10-year at 4.08%, 2-year at 3.52%.
Spot gold closed at $3,586/oz, up 1.12% for a third week; silver rose 0.82% to $40.97/oz.
Crude prices dropped, with WTI down 2.61% to $61.69/barrel and Brent down 1.81% to $65.66/barrel.
Equities performance
US stocks ended lower: Dow -0.48%, S&P 500 -0.32%, Nasdaq -0.03%.
Broadcom +9.41%, Tesla +3.64%; Chinese tech: Baidu +4%, Alibaba +3.57%.
European equities fell: DAX 40 -0.73%, FTSE 100 -0.09%, Euro Stoxx 50 -0.53%.
MARKET MOVERS
EUR/USD
- Primary trend: Bullish, though short-term momentum is softening as RSI drifts lower.
- Support level: 1.1675 (secondary: 1.1700)
- Resistance zone: 1.1755 (secondary: 1.1780)
- Long strategy: Buy on dips near 1.1675 support, target 1.1755 initially, extend towards 1.1780, stop-loss below 1.1675.
- Short strategy: Consider tactical shorts on rallies into 1.1755–1.1780 resistance, target 1.1700 initially, extend back to 1.1675 if momentum stalls.
- Range trade: Buy near support and sell near resistance if price consolidates between 1.1675–1.1780.
- Risk management: Keep stops tight within the prevailing bullish bias.
GBP/JPY
- Primary trend: Bullish, though overbought conditions suggest a short-term pullback may unfold.
- Support level: 199.05 (secondary: 199.50)
- Resistance zone: 200.45 (secondary: 200.70)
- Long strategy: Buy on dips near 199.05 support, target 200.45 initially, extend towards 200.70, stop-loss below 199.05.
- Short strategy: Consider tactical shorts on rallies into 200.45–200.70 resistance, target 199.50 initially, extend back to 199.05 if momentum stalls.
- Range trade: Buy near support and sell near resistance if price consolidates between 199.05–200.70.
- Risk management: Keep stops tight given the overbought backdrop.
DAX 40 (Germany)
- Primary trend: Bearish, though recent RSI strength points to a short-term bounce.
- Support level: 23,500 (secondary: 23,545)
- Resistance zone: 23,805 (secondary: 23,950–24,000)
- Long strategy: Consider tactical longs only if price holds above 23,805, target 23,950 initially, extend towards 24,000, stop-loss below 23,805.
- Short strategy: Sell into rallies near 23,805 resistance, target 23,545 initially, extend back to 23,500 if momentum stalls, stop-loss above 23,805.
- Range trade: Sell near resistance and cover near support if price consolidates between 23,500–23,805.
- Risk management: Keep stops tight given the prevailing bearish backdrop.
NEWS HEADLINES
Federal Reserve & policy – leadership race intensifies
Trump confirmed Fed Chair finalists as Hassett, Walsh, and Waller, while Treasury Secretary Bessent withdrew.
Senate Republicans are planning rule changes to fast-track Fed governor confirmations.
US trade & sanctions – tariff adjustments and Russia measures
Trump prepared a second wave of sanctions against Russia.
The US exempted gold, tungsten, and uranium from global tariffs, effective Monday.
Trump signed an executive order to adjust tariffs under future trade agreements, including potential zero duties on scarce goods, agricultural products, aircraft parts, and pharmaceutical inputs.
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