OpenAI set to start mass production of its own AI chips with U.S. semiconductor giant Broadcom The chip co-designed with US semiconductor giant Broadcom, would ship next yearchip to be used internally at OpenAI rather than make it available to external customersThe Financial Times has the report, gated, citing people familiar with the partnership.Broadcom CEO Hock Tan said earlier on Thursday that the firm had locked in over US$10bn in AI infrastructure orders from a new customer, without naming it. Reuters provided a summary. This article was written by Eamonn Sheridan at investinglive.com.

President Donald Trump said his administration will soon impose tariffs on semiconductor imports from companies that have not shifted production to the United States. Speaking ahead of a dinner with technology executives, Trump said the duties would be “substantial, not that high, but fairly substantial,” while exempting firms that are already building or planning U.S. facilities.The move reflects Trump’s strategy of using tariffs as leverage to pressure companies and governments to invest in America. Apple CEO Tim Cook, who was present at the dinner, was singled out by Trump as being “in pretty good shape” given Apple’s pledge to boost U.S. investment to $600 billion over the next four years.Trump previously indicated tariffs of around 100% on imported semiconductors, but said they would not apply to firms with U.S. manufacturing commitments. Major Asian chipmakers such as TSMC, Samsung, and SK Hynix have already announced U.S. investments.The policy has unsettled global markets and drawn legal challenges. A lower court recently struck down much of Trump’s earlier tariff regime, but his administration has asked the Supreme Court to intervene to preserve his sweeping powers under a 1977 emergency law. This article was written by Eamonn Sheridan at investinglive.com.

People's Bank of China USD/CNY reference rate is due around 0115 GMT.The People's Bank of China (PBOC), China's central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a "band," around a central reference rate, or "midpoint." It's currently at +/- 2%. How the process works:Daily midpoint setting: Each morning, the PBOC sets a midpoint for the yuan against a basket of currencies, primarily the US dollar. The central bank takes into account factors such as market supply and demand, economic indicators, and international currency market fluctuations. The midpoint serves as a reference point for that day's trading.The trading band: The PBOC allows the yuan to move within a specified range around the midpoint. The trading band is set at +/- 2%, meaning the yuan could appreciate or depreciate by a maximum of 2% from the midpoint during a single trading day. This range is subject to change by the PBOC based on economic conditions and policy objectives.Intervention: If the yuan's value approaches the limit of the trading band or experiences excessive volatility, the PBOC may intervene in the foreign exchange market by buying or selling the yuan to stabilize its value. This helps maintain a controlled and gradual adjustment of the currency's value. This article was written by Eamonn Sheridan at investinglive.com.

Say what you like about Trump, he plays the media very astutely. Trump levied tariffs on autos from Japan at 27.5%On Thursday, US time, he signed an order with the tariffs now at 15% instead. I have seen plenty of headlines, including from reputable financial media, loudly hailing that Trump has lowered tariffs on Japanese autos. Depends on the time frame you choose to cherry pick I guess. Just months ago you could buy a Japanese auto without added tariff taxes. In 7 days the price will be higher due to the 15% tariff. Hats off to Trump, he has played the media masterfully.-Meanwhile, Japan's top trade negotiator Akazawa says Japan has signed an MOU on Japan's investment package.So, the agreement is an 'understanding' Sheesh. And, Akazawa is sstill pushing for more favourable treatment on other goods:nothing changed from July 22nd agreement with regards to the USD 550bln investment packagethe amended executive order does not mention most favored nation treatment for pharma and chips, and will continue to push for the treatment This article was written by Eamonn Sheridan at investinglive.com.

Bank of America forecasts the euro will strengthen to 1.20/1.25 next yearsays the U.S. dollar risks slipping from slight overvaluation into undervaluation.Analysts noted the dollar has been overvalued for much of the past decade, though 2025 so far has brought it closer to fair value thanks to German fiscal stimulus, ongoing trade tensions, and questions over U.S. institutional stability.BofA warned that further erosion of institutional strength could push the dollar below fair value, creating scope for a more pronounced rally in the euro. This article was written by Eamonn Sheridan at investinglive.com.

Gold could soar to $5,000 an ounce if President Trump’s escalating manipulation of the Federal Reserve undermines confidence in U.S. markets, Goldman Sachs warned in a note. The bank said political pressure on the Fed threatens to erode trust in bonds, equities, and the dollar, pushing investors further toward safe-haven assets.Gold is currently trading around $3,545, near record highs. Goldman’s head of commodities research Samantha Dart wrote that: “a scenario where Fed independence is damaged would likely lead to higher inflation, lower stock prices, and an erosion of the dollar’s reserve currency status. In contrast, gold is a store of value that doesn’t rely on institutional trust.”The White House has intensified its campaign against the central bank, with Trump calling for criminal probes into Fed Chair Jerome Powell and Governor Lisa Cook, while also attempting to fire Cook. Analysts say these efforts, alongside Trump’s stated intention to appoint loyalists who favour lower interest rates, raise fresh concerns about the Fed’s autonomy.Goldman estimated that even a modest rotation from Treasuries into gold could be enough to trigger a major rally: “If 1% of the privately owned U.S. Treasury market were to flow into gold, the gold price would rise to nearly $5,000 per ounce”the bank also outlined a “tail risk” scenario of $4,500reaffirmed gold as its “highest-conviction long recommendation in the commodities space.” This article was written by Eamonn Sheridan at investinglive.com.

U.S. equities remain attractive despite lofty valuations, according to UBS. In a note released Thursday, the bank acknowledged that the S&P 500 is trading at about 22 times forward 12-month earnings—a level that ranks in the top 5% since 1985 and has sparked investor concerns over expensive pricing.UBS argued, however, that valuation alone is not a reliable guide to short-term market performancehistorically, high multiples have not had a strong relationship with returns over the following 12 monthsInstead, the bank pointed to robust corporate earnings and the prospect of easier monetary policy as key supports for the market:strong earnings momentumeasing Fed policy have tended to help stocks advance despite more demanding valuations.With rate cuts expected to resume later this month, the firm sees the backdrop for equities as constructive. This article was written by Eamonn Sheridan at investinglive.com.

Posting this as a PSA. Trump signed the new price hikes just an hour ago:Trump has finally signed the US-Japan trade agreementBase tariff on goods from Japan is 15%. Starts in 7 days! I have a 6 cylinder and an 8 cylinder Japanese car. Imports from Australia are only 10% if you are looking for a bargain and/or arbitrage opportunity ;-) This article was written by Eamonn Sheridan at investinglive.com.

August US ADP employment +54K vs +65K expectedISM August services PMI 52.0 vs 51.0 expectedUS September S&P Global final services PMI 54.5 vs 55.4 prelimUS initial jobless claims 237K vs 230K expectedFed's Williams says he expects rates to come down gradually over timeWilliams: Expects tariff impact to play out into the middle of next yearMore from Williams: Sees reduced upside risk to inflation from tariffsUS EIA weekly oil inventories +2415K vs -2031K expectedMiran says tightening US borders is 'deflationary'Miran: No one in the Trump admin has asked me to lower ratesCanada July trade balance -4.94B vs -4.75B expectedUS Q2 unit labor costs +1.0% vs +1.2% expectedUS July trade balance -78.3B vs -75.7B expectedMarkets:Gold down $8 to $3550WTI down 71-cents to $63.26S&P 500 up 53 points to 6501US 10-year yields down 4.6 bps to 4.16%USD leads, NZD lagsThe stock market liked what it saw in the economic data on Thursday as a wave of releases painted a picture of an economy that's subdued but not crumbling. Yesterday's Beige Book and JOLTS data triggered some fears of a harder landing but today's numbers -- particularly the ISM services data, highlighted middling growth. That kind of trajectory is a good one for continued rate cuts even if it doesn't mean strong demand. With that, the S&P 500 finished at the highest daily close ever at 6202 and just shy of the intraday record. It was a nice rally given that the index was in negative territory shortly after the open.The same dynamic helped to lift the US dollar as some fears were allayed. The gains were mostly modest but it was enough to wipe out yesterday's decline in USD/JPY.Naturally, there is some angst about Friday's non-farm payrolls report but the market wasn't showing a great deal of anxiety. This article was written by Adam Button at investinglive.com.

Trump has finally signed the US-Japan trade agreement. White House adds:Japan working toward expedited implementation of a 75% increase of U.S. rice procurementsU.S. will apply baseline 15% tariff on nearly all Japanese importsThe next we'll hear about this will be some dispute between Japan and the US on one one or more of the terms because its not really a deal at all. I'll STFU now. ;-) This article was written by Eamonn Sheridan at investinglive.com.

US stocks traded lower early but steady bids in the latter half of the session and a surge of buying into the close (for the 3rd day) nearly pushed it to a record. The close of 6502 was the best levels of the day and just shy of the 6207 record set August 25. It was also the highest daily closing level ever.Changes for the main indexes:S&P 500 +0.8%Nasdaq +1.0%Russell 2000 +1.3%DJIA +0.8%Toronto TSX Comp +0.5% This article was written by Adam Button at investinglive.com.

Highlighting the event agenda is Federal Reserve Bank of Chicago President Austan Goolsbee. He participates in a moderated Q&A before an mHub Industry Disruptor Series event, in Chicago at 2300 GMT/1900 US Eastern time.We heard from his colleague Williams on Thursday:More from Williams: Sees reduced upside risk to inflation from tariffsWilliams: Expects tariff impact to play out into the middle of next yearFed's Williams says he expects rates to come down gradually over timeAll eyes will be on the data Friday from the US:Friday's non-farm payrolls report is a nightmare to trade This article was written by Eamonn Sheridan at investinglive.com.

Trump fired the head of the BLS after last month's revision-filled non-farm payrolls report and this is the first one since. The move to fire Bureau of Labor Statistics Commissioner Erika McEntarfer was obviously political and no one takes seriously Trump's accusation that she 'faked' jobs numbers.So what now?On the face of it, I'd imagine it would be very difficult to upend all the processes that go into making the jobs report in a month. Then again, maybe just the chill leads to a series of small efforts to make sure that nothing is 'undercounted' or that seasonal adjustements are tweaked and that's enough. Or maybe someone at the top will just take a sharpie to the numbers in a desperate attempt at self-preservation.What I'm certain of is that I know the worst-case scenario: Something like 500K new jobs. The consensus is +75K and an outrageously strong report -- even if it's the usual statistical noise -- would forever-damage the report's credibility going forward. Where it starts to get tricky is how low you can go and still retain believably. Is it 200K?I'm not sure where the market will draw the line.The flipside would be if we get a negative number or further large downward revisions. That raises a totally different set of questions and begs for even more political interference.That brings us back to the middle. What if it's a tad strong or a tad weak? What is the market willing to believe?I don't think anyone has the answers and it's best not to try and be a hero. This article was written by Adam Button at investinglive.com.

Declines to comment if market pricing for a Sept cut (95%) is correctGood to see tariffs not thus far driving persistent inflationIt may take longer to gauge full impact of tariffs in inflation data This article was written by Adam Button at investinglive.com.

The week started out in poor fashion for stocks and it's been a choppy ones but the bulls are winning again.Amazon is leading the way today with a 3.7% gain that's brought it within a fraction of a new record high. The dynamic that unfolded in today's economic data was a good one for stocks. The numbers were soft enough to keep a steady stream of rate cuts coming but not so soft as to flash warning signs about a recession. In a leverage-driven market, I tend to think that rates are a much bigger factor than the strength of the economy anyway.You can see some of that dynamic playing out in the bond market this week. Yields rose early in the week but they've been reeled in on the softer economic data.Technically, not much stands in the way of another rise above 6500, though the bears will argue that seasonals are negative in September. In the short term though, we will have to wait for tomorrow's jobs report. The problem is that it's going to be hard to believe in them. This article was written by Adam Button at investinglive.com.

Bond market more focused on economic fundamentals right nowBond market is relatively calm right nowFed needs to keep economy on track and allow tariffs to pass throughMy base case is tariffs stay in place but I do consider other scenariosCore goods inflation has shifted higher on tariffs This article was written by Adam Button at investinglive.com.

It's bizarre that Trump is completely politicizing the Fed over the pace of rate cuts. I don't think there is anyone at the Fed who is significantly more dovish than Williams and they all see the same destination, it's just a difference of a six month timeline in getting there, which shouldn't even be a game breaker in a moderately weak economy.Fed must balance inflation and job risks right nowMon pol is modestly restrictive, appropriate in current economyTrade and immigration factors slowing activity, GDP will grow 1.25-1.5% this yearExpects jobles rate to rise to about 4.5% next yearSees PEC inflation at between 3-3.25% this year, 2.5% in 2026Expects target inflation in 2027Clear signs that tariffs are impacting prices and buying powerTariffs likely to add 1.00-1.50% inflation this yearLabor market cooling to pre-pandemic trendsLabor market currently in balanceThis is a nice slate of forecasts, time will tell if he's right. This article was written by Adam Button at investinglive.com.

Prior was -2392KDistillate +1681K vs -598K expGasoline -3795K vs -1068K expThe gasoline number helps to balance it out a tad but this isn't a great report for crude. On the kneejerk though, there market is largely unmoved. This article was written by Adam Button at investinglive.com.

It's not really surprising that Miran is following Trump's talking points in his Fed nomination but I would like to see the argument for how deporting low-wage workers is deflationary. I guess you can argue that pushing people out can lower housing prices but that's the same kind of 'one off' as tariffs, which he's also arguing aren't inflationary. This article was written by Adam Button at investinglive.com.

USD/JPY is at the best levels of the day, up 66 pis to 148.75.The climb is a continuation of the moves that followed today's data slate. The numbers weren't great but they were good enough to sooth nerves after yesterday's Beige Book highlighted the risks around a stagnant economy. There could also be an element of position squaring ahead of Friday's non-farm payrolls report and the turn of the calendar into September.Technically, the wipe out of yesterdays' decline in short order is a good sign but it also reinforces a series of higher lows and higher highs that began in mid-August.Overall though, there isn't a strong signal on the chart but if tomorrow's jobs number is decent, then there is a fair chance we price-out some Fed cuts and push back to 151.00. This article was written by Adam Button at investinglive.com.