The dollar is trading down as we get into the new week, continuing the drop from Friday.Even as oil prices continue to keep in the $80s and Treasury yields are remaining somewhat sticky, the dollar is starting to come under renewed pressure now. The charts are pretty telling about the current predicament for the US currency. And it's all to do with the Fed.[EUR/USD daily chart]The most notable chart among dollar pairs right now is the EUR/USD. The pair is now moving back above the 100-day moving average (red line), after the Friday attempt to break the key level fell a little short.But as we get into the new week, buyers are seeing renewed vigour and we're also seeing a test of the 50.0 Fib retracement level of the swing lower from April to June at 1.1586.If buyers can hold above both the key technical points, that will be a big win in establishing a stronger upside bias for the pair in the coming days. Besides the Fed minutes, there won't be all too much else to distract traders this week; barring any major US-Iran surprises.As such, that could afford some technical breathing room to the upside with the 200-day moving average (blue line) only seen at 1.1627 currently.Adding to that, we're also starting to see AUD/USD claw its way back up to a fresh two-month high:[AUD/USD daily chart]Buyers have been trying to shrug off the 100-day moving average (red line) here too, especially in the past two weeks. There have been some pushing and pulling but ultimately, the move higher today looks to be one that signifies that price action is "coming up for air".So, that could free up the path for a further push towards a test of 0.7200 next.Besides that, we're also seeing GBP/USD move up to 1.3550 levels with the July high of 1.3558 in focus. A firm break above that frees up the path towards testing the May highs next around the 1.3600-50 region.After weeks of anticipation and wondering about the Fed outlook, it appears that traders are starting to lean more towards a less hawkish Fed for September.Before the US CPI report last week, the odds of a move next month was still somewhat of a coin flip. But now, we're seeing traders price in just ~29% odds of rate hike with ~71% odds of no change.Even looking to year-end, traders are no longer pricing in a full 25 bps rate hike by the Fed for the remainder of 2026. The next full 25 bps rate hike is only priced for January next year with just ~36 bps of rate hikes priced in by June next year.And with little else standing in the way between now and Jackson Hole next week, this narrative could run for a bit more; all else being equal. So, just be wary of that. This article was written by Justin Low at investinglive.com.

China's delayed July data looms as markets eye demand and PBOC's yuan stanceBloomberg says dark trade oil shuttles are the reason Iran war hasn't spiked oil pricesBig Tech's AI spending is $3 trillion bigger than balance sheets showYen edges higher as traders push back Fed rate hike bets, shrug off soft GDPSingapore NODX growth holds above 20% for fourth straight month in JulyPBOC sets USD/ CNY reference rate for today at 6.7873 (vs. estimate at 6.7382)Japan Q2 GDP growth undershoots forecasts, complicating BOJ's hike timelineChina's Securities Daily warns against chasing gold at current highsUK data - Housing slump and hiring freeze cloud outlookMore NZ data: Retail card spending (July) +1.3% m/m (prior -1.4%)Bessent eyes Iran economic squeeze, but Chinese teapot ties limit optionsNZ services sector holds above breakeven for second month as PMI eases to 50.6 (prior 50.9)China delays July economic data release to late afternoon slotTrump orders cuts to South Korea drills, links move to cost of Iran warGoldman Sachs: labour market "not that interesting" as inflation dominates Fed debateOil- weekend recap & what's ahead: Iran vows to keep Hormuz shut, Trump tells Americans to accept high gas pricesMonday open indicative forex prices, 17 August 2026 - little change from late FridayWeekend:Bitcoin analysis shows what bulls need to do next to end this bearish 2026Stock earnings: 3 Key lessons for investors and tradersWhy Retail Traders Are Rethinking Traditional Prop FirmsFriday:investingLive Americas FX news wrap 14 Aug: Stocks finish mixed as yields rise and the dollar fallsSummary:Oil traded in a narrow range as US-Iran talks remained stalled and Hormuz shipping continued at a trickle, with no tankers moving oil on Friday.Iran said the Strait of Hormuz will stay shut until the US "accepts defeat," while Trump told Americans over the weekend to expect higher gasoline prices.IRGC Political Deputy Yadollah Javani said Iran's actions so far have been defensive but could become offensive, while Deputy Foreign Minister Kazem Gharibabadi and Foreign Minister Abbas Araghchi reiterated that any reopening of the strait remains on Iran's terms.Japan's Q2 GDP grew a weaker than expected 0.3% q/q (1.1% annualised), but the yen firmed toward 159 to the dollar as traders instead focused on fading Fed rate hike expectations.The dollar broadly lost ground following last week's data flow, including a soft US retail sales print on Friday.Singapore's July non-oil domestic exports rose 24.2% y/y, just shy of forecast, extending a fourth straight month of growth above 20% on AI-linked electronics demand.Asia-Pacific stocks traded mixed in quiet holiday-thinned trade, with South Korean markets closed and uncertainty building with the expiry of the 60-day US-Iran ceasefire.Oil prices moved in a narrow range between small gains and losses on Monday, with US-Iran talks still stalled and shipping through the Strait of Hormuz continuing only in trickle volumes. No tankers moved oil through the strait on Friday, according to tracking firms, and negotiations showed no sign of resuming as the new week began.Tehran maintained its hard line over the weekend. Iran's Deputy Foreign Minister Kazem Gharibabadi said Saturday that the Strait of Hormuz would remain closed until Washington accepts what he characterised as its defeat, while Foreign Minister Abbas Araghchi said Iran had not yet decided whether to resume talks with the US and set conditions for shipping to resume through the waterway. IRGC Political Deputy Yadollah Javani said Iran's actions to date have been defensive in nature but could take on an offensive character going forward. President Trump, addressing a rally on Friday, said Americans should be prepared to accept somewhat higher gasoline prices and floated the possibility of eventually declaring the strait US territory.In Asia, Japan's economy expanded 0.3% quarter on quarter in the April to June period, well below the 0.5% forecast, with annualised growth of 1.1% missing expectations of 2.0% as weak capital expenditure and flat consumption weighed on domestic demand. Despite the soft print, the yen edged higher against the dollar, rising to just under 159, a second consecutive day of gains, as traders focused more on pushed-back expectations for a Federal Reserve rate hike this year than on the domestic data. The move came alongside broader dollar weakness following last week's data flow, including a soft US retail sales report on Friday.Singapore's non-oil domestic exports rose 24.2% year on year in July, just below the 25% forecast, marking a fourth consecutive month of growth above 20% as AI-linked electronics demand continued to offset weaker non-electronics shipments.Asia-Pacific equities traded mixed following a quiet weekend for macro newsflow, with South Korean markets closed for a public holiday and investors weighing uncertainty as the 60-day US-Iran ceasefire period approaches its expiry.---Note, still to come - China data due at 3pm beijing time, delayed today:7:00 GMT (8 hours behind Beijing) 3:00 a.m. US Eastern Time (EDT) This article was written by Eamonn Sheridan at investinglive.com.

The unusual afternoon timing already flagged for Monday's release means Chinese risk pricing will be concentrated later in the Asian session than usual, leaving European markets to open without full clarity on the data and adding a layer of positioning risk around the open. Weak July credit figures released ahead of the activity data reinforce the case for a soft print, with new yuan loans contracting and both aggregate financing and loan growth slowing, all pointing to still-tepid demand for credit even as authorities continue rolling out consumer trade-in support. Any confirmation of broader deceleration in industrial output or investment would sharpen focus on whether the PBOC leans toward further easing, while also testing how comfortable policymakers remain with recent CNY strength, a key swing factor for regional currencies and commodities tied to Chinese demand such as copper and crude.--- Soft credit numbers are raising the stakes for China's delayed July activity data, with investors watching for signs Beijing is ready to ease further.Summary:China's National Bureau of Statistics shifted the release of July activity data, including industrial output, retail sales, fixed asset investment and property prices, to 3pm Beijing time on Monday, an unusual scheduling change first reported by Bloomberg.The delay pushes the data into the Asian afternoon session, meaning European markets will open before the figures cross, adding to positioning uncertainty around the open.Fixed asset investment is expected to stay subdued, weighed down by continued softness in the property sector, following a weak second quarter GDP print.New yuan loans fell by 340 billion yuan in July, while growth in aggregate financing slowed to 7.4% and RMB loan growth moderated to 5.2%, reinforcing expectations of soft credit demand.Key questions for markets are whether domestic demand is beginning to stabilise and whether the PBOC remains comfortable with further CNY strength.A downside surprise in the activity data could weigh on regional risk sentiment and pressure Asian currencies closely linked to China's growth outlook, while a confirmed slowdown could raise the odds of further PBOC easing. China's National Bureau of Statistics has pushed back the release of its July activity data to 3pm Beijing time on Monday, an unusual scheduling shift that has drawn attention from investors already bracing for a soft set of numbers. As reported by Bloomberg, the delay pushes the data drop into the Asian afternoon trading window, meaning European markets will open before the figures cross and North American markets will still be in their pre-market hours, adding an extra layer of positioning risk around the open.The package due for release covers industrial production, retail sales, fixed asset investment and residential property prices, all closely watched gauges of how China's economy is faring in the second half of the year following a weak second quarter GDP print. Fixed asset investment is expected to remain subdued, weighed down by the ongoing downturn in the property sector, while industrial output is projected to show some deceleration from June's pace.The data lands against a backdrop of softening credit conditions. New yuan loans fell by 340 billion yuan in July, while growth in aggregate financing eased to 7.4% and RMB loan growth moderated to 5.2%, both pointing to still-fragile demand for credit even as authorities continue to roll out consumer trade-in incentives aimed at supporting retail spending. Retail sales are expected to hold up relatively better than other components, helped by that targeted government support, though the broader picture remains one of uneven momentum across the economy.The two central questions for markets are whether China's domestic demand is beginning to find a floor, and whether the People's Bank of China remains comfortable allowing further yuan strength given the softer growth backdrop. A confirmed broader slowdown could raise the odds of additional PBOC easing, including a cut to reserve requirements or benchmark interest rates, to keep full-year growth targets within reach. Given China's outsized role in global demand for industrial commodities, any downside surprise in Monday's figures carries the potential to ripple into copper and crude oil pricing, regional equity indexes and Asian currencies more broadly, all of which remain closely tied to signals on the health of Chinese growth.3:00 p.m. Beijing Time = 07:00 GMT (8 hours behind Beijing) = 3:00 a.m. US Eastern Time (EDT) (12 hours behind Beijing).The traditional morning release slot (typically 10:00 a.m. Beijing time) corresponds to 02:00 GMT / 10:00 p.m. US Eastern Time (previous day). This article was written by Eamonn Sheridan at investinglive.com.

The clandestine shuttle trade helps explain why Brent has held broadly in an $80 to $90 range through August rather than testing the $150 levels once feared at the war's outset, effectively acting as an informal supply buffer the market has come to depend on without fully pricing the risk behind it. Any meaningful slowdown in these flows, whether from escalating attacks or insurers pulling back cover, would remove that buffer quickly and could reintroduce the kind of upside price risk markets assumed away months ago. The apparent build-up of idle Saudi tanker capacity off Oman also hints at a potential further supply cushion if Riyadh follows the UAE, Iraq, Qatar and Kuwait into the shuttle trade, a development worth watching for any signs it's crystallising.---This is via a Bloomberg (gated) piece. I'd be more pointing to oil reserve releases and the role of China, but here is Bloomberg's argument for pondering.  Markets have quietly been relying on a shadow shipping trade to keep oil prices in check, and few outside the industry seem to appreciate how much weight it's carrying.Summary:A covert oil shuttle trade through the Strait of Hormuz is helping keep global prices in check, transferring barrels onto tankers off the coast of Oman to avoid the riskiest stretch of the waterway.Volumes are running above the roughly 4 million barrels a day markets had estimated, though exact figures are difficult to track given vessels are deliberately obscuring their locations.US Energy Secretary Chris Wright said 9 million barrels a day crossed Hormuz in the prior week, nearly half of pre-war volumes of around 20 million barrels a day.The trade has helped keep Brent trading between $80 and $90 a barrel through much of August, far below the $150 some had feared at the war's outset.The UAE's Adnoc has sold around 135 million barrels via this route despite 23 of its vessels being attacked, resulting in one fatality and 20 injuries, while Iraq, Qatar and Kuwait have also shuttled cargoes out.Saudi Arabia has so far avoided large-scale shuttling of its own crude but is showing early signs of preparing to join, with 16 supertankers positioned off Oman and more en route. There is a story the oil market has not been telling itself clearly enough this year: prices held together through a Middle East war not because the danger passed, but because a covert shipping trade absorbed it on the market's behalf.Since the Iran war broke out, producers across the Gulf have been quietly moving crude out of the Strait of Hormuz by transferring barrels onto tankers waiting off the coast of Oman, often with transponders switched off to avoid drawing attention. It is not a small operation. Volumes are running above the roughly 4 million barrels a day markets had assumed, according to people familiar with the shipments, and satellite data shows the number of vessels gathered off Oman has surged to around 150 from just 40 in January. US Energy Secretary Chris Wright's disclosure last week that 9 million barrels a day crossed Hormuz, nearly half of pre-war volumes, should have been treated as a bigger story than it was.This matters because the alternative counterfactual was genuinely alarming. Traders were bracing for oil near $150 a barrel when the conflict began. Instead, Brent has spent much of August boxed in between $80 and $90, a range that reflects real supply discipline rather than luck. Some credit is due to stockpile releases, pipeline workarounds and softer global demand. But the shuttle trade deserves recognition as a central pillar of that stability, one that has operated largely out of public view.It has not come without cost. The UAE's Adnoc alone has had 23 vessels attacked while transiting Hormuz, resulting in one death and 20 injuries among crew, even as it has pushed ahead with selling roughly 135 million barrels through the route. Iraq, Qatar and Kuwait have found similar, if smaller, outlets. Seafarers have died. Oil spills have appeared in satellite imagery with no clear origin, a quiet reminder of what clandestine trade looks like when something goes wrong. The people actually running this trade describe it plainly: this is a dark trade, and not every ship owner is willing to take the risk.What should give markets pause is how fragile this arrangement really is. It depends on continued military tolerance for the risk, on insurers staying willing to underwrite it, and on producers absorbing losses that would be unthinkable in peacetime. Saudi Arabia's apparent preparations to join the shuttle trade, with over a dozen supertankers now massing off Oman, suggest the practice is becoming more entrenched rather than winding down. That should be read less as reassurance and more as a sign of how normalized this workaround has become. Markets have priced in calm. The people keeping that calm intact are running a considerably higher risk than the oil price curve currently reflects. This article was written by Eamonn Sheridan at investinglive.com.

The scale of off-balance-sheet AI commitments adds a layer of hidden leverage that traditional valuation metrics may be understating, a risk factor equity investors are likely to price in more explicitly if AI demand growth shows any signs of slowing. With Alphabet and Amazon already posting negative free cash flow, further reliance on capital markets to fund these obligations could pressure credit spreads and weigh on sentiment toward the broader AI infrastructure trade. The disclosures are likely to sharpen scrutiny of individual balance sheets heading into upcoming earnings, particularly for companies whose purchase and lease commitments are growing fastest relative to reported capex.--- Big Tech's real AI spending bill is running trillions of dollars ahead of what shows up on the balance sheet.Summary:Nine major tech companies, including Alphabet, Meta, Amazon, Microsoft, Oracle and Nvidia, carry roughly $3 trillion in off-balance-sheet commitments tied mostly to AI infrastructure, according to a Wall Street Journal (gated) analysis.That figure dwarfs the roughly $600 billion in traditional capex these companies reported over the past year and is about triple their outstanding lease and long-term borrowing obligations.Uncommenced lease obligations, including Meta's massive Hyperion data centre project in Louisiana, totalled $1.2 trillion, roughly four times higher than a year earlier.Chip and hardware purchase commitments across the companies stood at $1.9 trillion, with Alphabet's commitments alone reaching $811 billion as of June, more than double the level reported three months prior.These obligations largely remain off balance sheet under current accounting rules until leases begin or products are delivered, making the companies' true financial exposure harder for investors to assess.Alphabet and Amazon have both recently reported negative free cash flow, with commitments of this scale seen as adding risk if AI demand fails to meet expectations. Big Tech's disclosed capital expenditure on artificial intelligence infrastructure understates the true scale of its financial commitments by roughly $3 trillion, according to a Wall Street Journal analysis of securities filings from nine major technology companies. The gap stems from massive lease and purchase obligations tied to data centres and chips that remain off company balance sheets under current accounting rules.The companies examined, including Alphabet, Meta, Amazon, Microsoft, Oracle, Nvidia, Broadcom, SpaceX and Advanced Micro Devices, reported combined traditional capex of about $600 billion over the past year, a figure dwarfed by their off-balance-sheet exposure. Obligations tied to leases that have not yet begun totalled $1.2 trillion, roughly four times the level disclosed a year earlier, while purchase commitments for hardware and other goods stood at $1.9 trillion. Under accounting rules, these obligations typically stay off the balance sheet until rent payments start or products are delivered.Meta's Hyperion data centre project in Louisiana illustrates how such deals accumulate hidden exposure. The company signed a lease with an initial four-year term and options to extend for up to two decades, guaranteeing bondholders will be made whole if it exits early, but because it considers that scenario unlikely, no liability appears on its books. Alphabet's own commitments have grown especially fast, reaching $811 billion as of June, more than double the $332 billion reported just three months earlier, spanning technical infrastructure, inventory and energy agreements that in some cases extend to 2054.The implications cut both ways. Optimists point to surging AI demand and hardware shortages as evidence that future revenue will comfortably cover these obligations. But the commitments are largely non-cancellable regardless of whether that demand materialises, and some companies once seen as having fortress balance sheets have needed to tap capital markets more frequently. Alphabet and Amazon have both recently posted negative free cash flow, meaning spending already exceeds operating cash flow before accounting for these additional trillions in future obligations.Morgan Stanley accounting analysts warned in April that the growing size and complexity of these arrangements is making it increasingly difficult for investors to gauge the true leverage of the companies involved, a concern likely to weigh more heavily on markets if AI infrastructure spending continues to outpace revenue growth. This article was written by Eamonn Sheridan at investinglive.com.

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate. More here on this.PBOC injected CNY 565.5bn via overnight reverse reposzero 7-day reverse repoEarlier:China's Securities Daily warns against chasing gold at current highsChina delays July economic data release to late afternoon slot This article was written by Eamonn Sheridan at investinglive.com.

The yen's modest advance despite a clear GDP miss underscores how currency direction is currently being driven more by shifting Fed expectations than by domestic Japanese data, with fed funds futures now implying a two-thirds chance the Fed holds rates next month. That repricing of US policy risk is doing more to narrow the yield differential than anything coming out of Tokyo, leaving the yen's gains modest and still contained within its recent range rather than signalling a decisive break. The soft GDP print itself is unlikely to alter the BOJ's own tightening path given underlying inflation remains well above target, meaning the policy divergence story between a cautious Fed and a still-hawkish BOJ continues to underpin the currency, even if Monday's move was driven mostly from the US side of the equation.---Earlier:Japan Q2 GDP growth undershoots forecasts, complicating BOJ's hike timeline--- The yen is gaining more from fading Fed rate hike bets than from anything happening in Japan's own economy right now.Summary:The yen strengthened 0.2% against the US dollar to 159.055, a second consecutive day of modest gains, though it remained within its trading range of the past week.The move came even as Japan's Q2 GDP data disappointed, with the economy expanding an annualised 1.1% against expectations of 2.0%, and quarter on quarter growth of 0.3% versus 0.5% expected.Fed funds futures now imply a 66.9% chance the Federal Reserve holds rates at its next meeting, with traders pushing back the timing of any further hike this year.Growth in Japan was held back by a 1.2% quarterly decline in capital expenditure against expectations for a 0.4% gain, and flat private consumption versus a forecast 0.5% rise, as higher prices weighed on household spending.External demand outperformed, contributing 0.5 percentage points to GDP against an expected 0.3, supported by a yen that remains historically weak.Analysts at Capital Economics (cited by Reuters) described the GDP details as mixed, noting the government's efforts to limit pass-through from higher energy costs and a jump in government consumption pointing to early effects from Takaichi's expansionary fiscal policy.The GDP deflator held at 2.6% year on year in Q2, well above the Bank of Japan's 2% inflation target, a factor still expected to support the case for a BOJ rate hike in September. The yen edged higher against the dollar on Monday, largely shrugging off a weaker than expected Japanese GDP report as traders instead focused on pushing back expectations for a Federal Reserve rate hike this year. The currency rose 0.2% to 159.0 (just under) per dollar, a second consecutive day of modest gains, though it remained firmly within the trading range it has held over the past week.The move came despite data showing Japan's economy expanded at an annualised pace of just 1.1% in the April to June quarter, well short of the 2.0% rate economists had expected, with quarter on quarter growth of 0.3% also missing the 0.5% forecast. Growth was weighed down by a 1.2% quarterly decline in capital expenditure, a sharp reversal from the 0.4% gain that had been anticipated, alongside flat private consumption against expectations for a 0.5% increase, as elevated prices continued to weigh on household spending. External demand was a bright spot, contributing 0.5 percentage points to GDP versus an expected 0.3, a trend analysts expect to persist given the yen remains historically weak and continues to support Japanese exporters.Despite the soft headline numbers, the miss is unlikely to derail the Bank of Japan's expected rate hike in September, given the GDP deflator held at 2.6% year on year in the second quarter, comfortably above the central bank's 2% inflation target. Analysts at Capital Economics characterised the details of the report as a mixed bag, noting that the government has so far limited the pass-through from higher energy costs into the broader economy, while a jump in government consumption suggests Prime Minister Takaichi's expansionary fiscal policies are beginning to have an effect.Instead of reacting primarily to the domestic data, currency markets appeared more focused on the shifting US rate outlook, with fed funds futures now pricing a 66.9% probability that the Federal Reserve holds rates steady at its next meeting. That repricing has done more to narrow the yield gap between the two economies than Monday's GDP report, leaving the yen's advance driven largely by developments on the American side of the equation. With the BOJ still seen as leaning toward further tightening given inflation running well above target, the broader policy divergence between a increasingly cautious Fed and a still hawkish Bank of Japan looks set to remain the dominant driver of yen direction in the sessions ahead. This article was written by Eamonn Sheridan at investinglive.com.

The July print, though a touch below the Reuters poll median, extends a run of exceptionally strong export growth that has already prompted a sharp upgrade to Singapore's official 2026 trade forecast, reinforcing the view that AI-linked electronics demand remains the dominant driver of regional trade momentum. With shipments broadening across nine of the top ten export markets rather than being concentrated in one corridor, the data supports the case that Singapore's export strength is structural rather than a single-quarter blip, a useful data point for traders positioning around broader Asian growth exposure. The result also arrives against the backdrop of last week's upgraded GDP and export forecasts, meaning today's figure is more confirmatory than surprising, likely limiting any outsized reaction in the Singapore dollar. The ongoing divergence between resilient electronics shipments and softer non-electronics trade remains worth watching as a gauge of how narrowly based the current export boom is.--- Singapore's export engine keeps running hot on AI-linked demand, even if July's pace came in just shy of expectations.Earlier:Singapore doubles 2026 growth outlook to 4.5-5.5% on tech cycle upgrade---Summary:Singapore's non-oil domestic exports rose 24.2% year on year in July, close to the Reuters poll forecast of 25% and marking a fourth consecutive month of growth above 20%.Robust AI-related demand for electronics drove the gain, even as non-electronics shipments declined over the same period.Exports rose to nine of Singapore's top ten markets, led by shipments to the United States, China and Taiwan, according to Enterprise Singapore.The release follows Enterprise Singapore's upgrade last week to its full-year 2026 non-oil domestic export forecast, raised to 14% to 16% growth from a prior 3% to 5%.It also follows last week's Q2 GDP data showing the economy grew 5.9% year on year, prompting the Trade Ministry to lift its 2026 GDP growth forecast to 4.5% to 5.5% from 2.0% to 4.0%.Officials have attributed the improved outlook to a stronger than expected AI investment boom offsetting a less severe than feared drag from the Middle East conflict. Singapore's non-oil domestic exports rose 24.2% year on year in July, government data showed on Monday, extending a run of growth above 20% to a fourth consecutive month even as the reading came in just shy of the 25% median forecast in a Reuters poll. The growth was driven largely by robust AI-related demand for electronics, which continued to outweigh a decline in shipments of non-electronics goods.Enterprise Singapore said exports rose to nine of the city-state's top ten markets in July, with the United States, China and Taiwan leading the gains. The broad-based nature of the increase suggests the current export strength is not confined to a single trading partner, lending support to the view that AI-linked demand is lifting Singapore's trade performance across multiple corridors rather than in isolated pockets.The July figure lands just a week after Enterprise Singapore sharply upgraded its full-year 2026 forecast for non-oil domestic export growth, lifting it to a range of 14% to 16% from a prior estimate of just 3% to 5%. That revision came alongside separate data showing Singapore's economy grew 5.9% year on year in the second quarter, beating both the Reuters poll estimate and the earlier official advance reading, prompting the Trade Ministry to raise its full-year GDP growth forecast to 4.5% to 5.5% from 2.0% to 4.0%.Officials have attributed the broader upgrade to two offsetting forces: a global AI investment boom that has proven considerably stronger than expected, and an impact from the Middle East conflict that has so far been less severe than initially feared. The improved outlook has applied specifically to AI and technology linked sectors of the economy, while those more directly exposed to Middle East related supply disruptions have continued to lag.Taken together with last week's data, July's export figures reinforce the picture of Singapore as a regional bellwether for how the AI investment cycle is reshaping growth expectations, even as geopolitical risk from the Middle East continues to weigh on other parts of the global economy. With export growth running well ahead of the levels implied by Enterprise Singapore's original forecast range, the July reading suggests the AI-driven tailwind identified last week remains firmly intact heading into the second half of the year. This article was written by Eamonn Sheridan at investinglive.com.

A neutral setting would be around USD/CNY reference rate at 6.7414, only marginally higher than the previous fix, even though the dollar index eased on Friday and the onshore spot rate closed a touch firmer. The central bank is unlikely to simply follow the softer dollar lower, and instead appears set to keep managing the pace of yuan appreciation carefully rather than letting market forces set the tone unchecked.That caution could extend further in the sessions ahead. With the dollar weakening, the PBOC might lean more heavily on its damping mechanism to slow the yuan's advance, potentially widening the gap between the fix and market expectations to around 500 pips from the previous 480. Such a move would lift the USD/CNY midpoint above Friday's 42-month low of 6.7878, underscoring the central bank's likely preference for a gradual, controlled currency path over a rapid yuan rally.***The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence.--- This article was written by Eamonn Sheridan at investinglive.com.

Japan Q2 real GDP prelim +0.3% q/q vs. expected +0.5%Japan Q2 GDP annualised +1.1% vs. expected +2.0%Japan Q2 GDP deflator +2.6% y/yJapan Q2 domestic demand contribution to GDP -0.2%Japan Q2 external demand contribution to GDP +0.5% vs. expected +0.3Japan Q2 exports +0.5% q/qJapan Q2 private consumption 0.0% q/q vs. expected +0.5%Japan Q2 capex -1.2% q/q vs. expected +0.4%---A GDP print this far below expectations complicates the Bank of Japan's path toward further policy normalisation, given the central bank has been leaning on steady domestic demand to justify additional rate hikes after moving away from ultra-easy policy. Flat private consumption and a sharp capex contraction point to a private sector still hesitant to spend, which could see the BOJ tread more cautiously into its next meeting even as elevated producer and consumer inflation keep pressure on policymakers to act. The yen is likely to come under renewed pressure on a weaker growth outlook, particularly if markets scale back September hike odds, while JGB yields may ease on reduced near-term tightening expectations. The external demand contribution beating forecasts offers a partial offset, but is unlikely to be enough on its own to change the broader narrative of a soft domestic economy.--- Japan's economy grew just 0.3% q/q in the April-June quarter, well below the 0.5% forecast, with annualised growth of 1.1% badly missing expectations of 2.0%, as weak capex and flat consumption weighed on domestic demand. Japan's economy is growing slower than expected, leaving the Bank of Japan with a harder case to make for its next rate hike.Summary:Japan's preliminary Q2 real GDP rose just 0.3% q/q, well short of the 0.5% forecast, with annualised growth of 1.1% badly missing expectations of 2.0%.The GDP deflator rose 2.6% y/y, underscoring that price pressures remain elevated even as headline growth disappoints.Domestic demand subtracted 0.2 percentage points from GDP, while external demand contributed a stronger than expected 0.5 percentage points, beating forecasts of 0.3.Private consumption was flat at 0.0% q/q, missing expectations of 0.5% growth, a weak signal given consumption's outsized weight in the Japanese economy.Capital expenditure fell 1.2% q/q, a sharp reversal from the expected 0.4% gain, pointing to corporate caution on new investment.Exports rose 0.5% q/q, helping cushion the broader growth shortfall. Japan's economy grew far more slowly than expected in the second quarter, with preliminary data showing real GDP rising just 0.3% quarter on quarter against forecasts for 0.5%, while the annualised growth rate of 1.1% badly missed expectations of 2.0%. The soft outturn adds a fresh complication to the Bank of Japan's push to normalise policy after years of ultra-loose monetary settings, coming at a moment when the central bank has been weighing further rate hikes against still-elevated inflation.The breakdown pointed to a domestic economy losing momentum even as trade helped cushion the headline number. Private consumption, which makes up more than half of Japan's economy, was flat on the quarter, undershooting expectations for a 0.5% rise and suggesting households remain cautious amid persistent cost of living pressures. Capital expenditure fell 1.2% quarter on quarter, a sharp reversal from the 0.4% gain economists had pencilled in, a sign corporates are pulling back on investment even as the BOJ has signalled a desire to see stronger private-sector spending underpin any further tightening. Domestic demand overall subtracted 0.2 percentage points from growth.External demand provided a partial offset, adding 0.5 percentage points to GDP and beating expectations of a 0.3 point contribution, helped by a 0.5% rise in exports. The GDP deflator, a broad measure of price pressures across the economy, rose 2.6% year on year, a reminder that inflation remains well above target even as growth disappoints, a combination that leaves the BOJ facing a difficult balancing act.The weak print is likely to feed into ongoing debate over the timing of the BOJ's next move. The central bank has spent much of 2026 navigating a gradual exit from decades of ultra-accommodative policy, with markets watching for further hikes as inflation, including recent producer price data, has stayed above target even when undershooting individual forecasts. A soft domestic demand picture, paired with weak capex and flat consumption, gives policymakers reason for caution, even as sticky inflation argues for continued tightening. The yen, already sensitive to shifts in rate expectations, is likely to remain a key barometer of how markets read the BOJ's response to today's data in the weeks ahead.--- This article was written by Eamonn Sheridan at investinglive.com.

The commentary underscores how sensitive gold sentiment remains to any upside surprise in US inflation data, given the current rally rests on expectations of a softer economy and a peaking rate cycle. A hotter than expected inflation print would risk reviving higher-for-longer Fed rate expectations, lifting Treasury yields and undermining the non-yielding metal's appeal, a scenario that could trigger a swift unwind of recent gains. At the same time, steady central bank buying on dips is seen as a structural floor beneath the market, meaning any pullback is more likely to be choppy and range-bound than a sustained reversal. For traders, the piece reads as a caution against extrapolating the recent rally in a straight line.--- State media in China is telling investors gold's rally looks stretched, not broken, and warns against piling in at the top.Summary:Chinese financial outlet Securities Daily cautioned against chasing gold at current price highs.The commentary identified Federal Reserve policy as the single biggest source of uncertainty for gold, with the rally premised on a weakening US economy and an end to the rate-hiking cycle.It warned that if inflation rebounds more than expected, the Fed could keep rates higher for longer, lifting Treasury yields and potentially reversing the case for gold.Rapid near-term gains were flagged as having created heavy profit-taking pressure and technically overbought conditions, raising the odds of a correction.The piece noted a tension between fast-moving speculative offshore flows reacting to policy shifts and steady central bank dip-buying, which it said makes a sustained one-directional move unlikely.It advised retail investors against blindly chasing highs, recommending position sizing aligned with risk tolerance and a long-term allocation approach. Chinese financial commentary outlet Securities Daily has cautioned investors against chasing gold at its current elevated levels, arguing the metal's near-term outlook is clouded by policy uncertainty and stretched technical conditions.According to the commentary, the single biggest variable for gold remains the trajectory of US Federal Reserve policy. The current rally has been built on expectations that the American economy is losing momentum and that the rate-hiking cycle has run its course, but the piece stressed that the inflation outlook underpinning those assumptions is far from settled. Should price pressures surprise to the upside, the Fed would likely be forced to hold rates higher for longer, a shift that would push Treasury yields up and weaken the investment case for a non-yielding asset like gold, potentially triggering a fast correction.The commentary also pointed to signs of market fatigue closer to home. It described the pace of recent gains as having generated substantial profit-taking pressure, alongside technical readings that suggest gold is overbought, both of which raise the probability of a pullback in the near term. Compounding the picture, the piece said speculative flows from offshore investors have been quick to react to shifting policy signals, amplifying short-term price swings, even as central banks around the world continue to treat dips as long-term buying opportunities.That clash, between nimble speculative positioning and patient official-sector accumulation, was cited as the reason a clean, sustained move in either direction looks unlikely for now. Instead, the outlet expects gold to trade in a choppy pattern at elevated levels, with the overall price base drifting gradually higher over time rather than breaking out or collapsing outright.The piece closed with a note of caution aimed at retail investors specifically, urging them not to chase the market blindly at current highs. It recommended sizing any exposure according to individual risk tolerance and approaching gold from a long-term portfolio allocation perspective rather than treating the recent rally as a signal to pile in. This article was written by Eamonn Sheridan at investinglive.com.

The combination of a sharper than usual seasonal drop in asking prices and employers holding firm on both hiring and firing adds to the case for a cautious Bank of England, which has kept rates on hold since December 2025. Weak housing momentum alongside soft hiring intentions points to a consumer backdrop that remains fragile, a dynamic likely to weigh on sterling and keep gilt yields anchored to dovish rate expectations into official labour data due Tuesday. The London-versus-north divergence in house prices also reinforces a narrative of an economy healing unevenly rather than broadly, which could complicate the BoE's read on underlying demand. Markets are likely to treat both data points as reinforcing rather than new information, given confidence readings have sat near post-pandemic lows for some time.--- Britain's housing market and labour market are both losing momentum at once, sharpening the case for a cautious Bank of England.Summary:Rightmove reported UK asking prices fell 2.0% in the four weeks to August 8, sharper than the 10-year average August fall of 1.3% and the steepest since 2018, with prices down 1.0% year on year.London posted the sharpest annual price fall at 3.1%, while prices in the north of England continued to rise, and Rightmove cut its 2026 price growth forecast to flat or as much as a 2% fall.Buyer demand rose 5% since Prime Minister Andy Burnham took office on July 20 but remained 10% below year-ago levels, while the average two-year fixed mortgage rate rose to 5.09% from 4.92%.A separate CIPD survey found UK employer confidence near its weakest levels outside the pandemic, with the net employment balance holding at plus 9 and private-sector hiring intentions at plus 11, both close to record lows outside the pandemic.Only 57% of private-sector employers plan to recruit in the next three months, a joint post-pandemic low, though redundancy levels have not risen, prompting the CIPD to describe a "low-hire, low-fire" labour market.Median expected pay rises held at 3% for more than two years, with 31% of employers reporting hard-to-fill vacancies and 14% expecting significant recruitment difficulties over the next six months. Britain's economic soft patch deepened on Monday, with fresh data pointing to a housing market under pressure and a labour market still reluctant to hire. According to Rightmove, average asking prices for newly listed homes fell 2.0% in the four weeks to August 8, a sharper drop than the 10-year average August fall of 1.3% and the steepest such decline since 2018. On an annual basis, asking prices were down 1.0%, the biggest yearly fall since December 2023, with London leading the decline at 3.1% even as prices in the north of England continued to rise. A summer slowdown and a 12-year high in the number of homes for sale weighed on the market, though buyer demand did pick up 5% following Prime Minister Andy Burnham's arrival in office on July 20, even as it remained 10% below year-ago levels. The average two-year fixed mortgage rate climbed to 5.09% from 4.92% a month earlier, prompting Rightmove to cut its 2026 price growth forecast to a range of flat to a 2% decline, citing geopolitical uncertainty, higher mortgage rates and October's budget as key risks.Separately, a survey from the Chartered Institute of Personnel and Development showed British employers remain stuck in a low-hire, low-fire pattern, with confidence near its weakest levels outside the pandemic. The CIPD's net employment balance held at plus 9, close to its lowest level outside the pandemic, while private-sector hiring intentions stayed at plus 11, matching a record low outside the pandemic era. Just 57% of private-sector employers plan to recruit in the next three months, also a joint post-pandemic low, though redundancy levels have not risen, prompting the CIPD to describe the labour market as low-hire, low-fire rather than one shedding jobs outright. Median expected pay rises held at 3% for more than two years, while 31% of employers reported hard-to-fill vacancies and 14% expect significant recruitment difficulties over the next six months. The CIPD called for lower hiring costs and greater support for youth employment.Together, the two surveys land a day ahead of official labour market data and add to the picture the Bank of England is weighing as it considers its next move on interest rates, which have been on hold since December 2025.--Still a month out from the next meeting for the Bank of England: This article was written by Eamonn Sheridan at investinglive.com.

Any move against Chinese refiners or banks handling Iranian crude carries a direct oil market consequence: curbing discounted Iranian barrels would tighten supply and could push prices higher just as the market absorbs an already elevated geopolitical risk premium from the naval blockade. Traders are likely to treat this as a slow-burn story rather than an immediate catalyst, since Washington has signalled intent without confirming specifics. The China angle is the one to watch most closely, given any escalation against Chinese banks risks a tit-for-tat response from Beijing on critical minerals exports, a flashpoint that could ripple well beyond energy markets.---Earlier:Oil- weekend recap & what's ahead: Iran vows to keep Hormuz shut, Trump tells Americans to accept high gas prices Washington has plenty of Iran pressure points left to pull, but few that squeeze Tehran without also risking a costly fight with Beijing.Summary:Treasury Secretary Scott Bessent has promised unprecedented economic pressure on Iran, expected as soon as next week, though Washington has not detailed specifics.China buys the vast majority of Iran's oil exports, much of it through independent teapot refiners with limited exposure to the US financial system.Treasury has warned two major Chinese banks over handling Iranian funds but has stopped short of formal sanctions, wary of Beijing retaliation ahead of a planned Trump-Xi meeting.Other options include tighter curbs on UAE-based exchange houses used to repatriate Iranian oil proceeds, broader secondary sanctions modelled on the North Korea approach, and confiscating rather than freezing Iranian overseas assets.A land blockade would need cooperation from neighbours including Iraq, Turkey and Pakistan, while secondary tariffs face legal hurdles after a Supreme Court ruling.Analysts describe much of the existing sanctions regime as a "whack-a-mole" exercise that has yet to shift Iran's strategic calculus. Treasury Secretary Scott Bessent says Washington is preparing to hit Iran with economic measures unlike anything seen before, with new steps expected as soon as next week. The administration has not detailed what it has in mind, though the range of remaining pressure points is narrower than it first appears, given Iran is already under a naval blockade and thousands of existing sanctions.China's central role in Iran's oil trade is the most obvious target. Beijing buys the large majority of Iran's crude, much of it processed by independent "teapot" refiners with little exposure to the US financial system, making them harder to deter than larger buyers. Treasury has already sanctioned some smaller Chinese refiners and firms, and according to Bloomberg Economics, has warned two larger Chinese banks they could face secondary sanctions if Iranian funds move through their systems, though it has stopped short of naming them, wary of provoking Beijing ahead of a planned meeting between President Trump and President Xi Jinping.Other levers under discussion include tighter action against exchange houses, mostly based in the United Arab Emirates, that help Iran convert oil proceeds, often received in yuan, into usable currency. Washington could also broaden secondary sanctions to any entity doing business with Iran, an approach modelled on the campaign against North Korea, or move from freezing to confiscating Iranian state assets already within US jurisdiction.A land blockade, requiring cooperation from neighbours including Iraq, Turkey and Pakistan, and secondary tariffs on countries trading with Iran, both face significant obstacles: the former is logistically difficult given mountainous terrain along parts of Iran's borders, while the latter lost its legal underpinning after a Supreme Court ruling.Of the options on the table, targeting Chinese teapot refiners and exchange houses looks the most readily implementable in the near term, since both build directly on measures Treasury has already taken. Broader moves against major Chinese banks, a land blockade or new tariff powers face steeper diplomatic, legal or logistical hurdles, and analysts caution that without a shift in White House priorities toward Iran over China, none of the options are likely to change Tehran's calculus.  This article was written by Eamonn Sheridan at investinglive.com.

NZ electronic card retail sales +1.3% m/mprior -1.4%+3.4% y/yprior +1.3%Electronic cards data covers about 68% percent of core retail sales in NZ and is the main measure of monthly retail activity.Also, Food Price Index inflation +0.1% m/mprior +0.6%Earlier:NZ services sector holds above breakeven for second month as PMI eases to 50.6 (prior 50.9) This article was written by Eamonn Sheridan at investinglive.com.

The modest cooling in New Zealand's Performance of Services Index (this is NZ's Services PMI) offers limited fresh signal for the RBNZ's rate path, with the reading still consistent with tepid but positive momentum rather than a sharp turn. NZD traders are likely to look past the headline given the marginal drop from June, focusing instead on the weak employment and supplier deliveries components as evidence the recovery remains narrowly based. A soft services print, layered on already cautious consumer sentiment, keeps alive the case for further RBNZ easing later in the cycle, though a second straight month above breakeven should cap the more bearish kiwi dollar narratives for now.--- New Zealand's services recovery is holding together, but with hiring still stalled it remains fragile rather than robust.Summary:BusinessNZ's Performance of Services Index (PSI) came in at 50.6 in July, down from 50.9 in June but up from 48.1 in May, marking a second straight month of expansion.BusinessNZ CEO Katherine Rich said the sector's improvement is encouraging but noted employment, at 48.5, remains the soft spot as firms stay cautious about new hires.Respondent comments cited cost of living pressures, fuel and petrol prices, rising interest rates and election uncertainty, with 64% of comments negative, a notably softer tone than in manufacturing.New Orders/Business was the strongest sub-index at 52.6, followed by Stocks/Inventories at 51.6 and Activity/Sales at 50.5.Employment and Supplier Deliveries were the weakest sub-indices, both at 48.5, underscoring how narrowly based the recovery remains.BNZ Senior Economist Doug Steel noted the past two months have produced the best PSI readings in roughly three years, with Activity/Sales rising above 50 for the first time in six months. New Zealand's services sector held onto its expansion in July, with the BusinessNZ Performance of Services Index (PSI) coming in at 50.6, according to BusinessNZ. That was down slightly from June's 50.9 reading but well above May's 48.1, marking the second consecutive month the index has held above the 50.0 breakeven mark that separates expansion from contraction.BusinessNZ chief executive Katherine Rich said it was encouraging to see the PSI hold above breakeven for a second month running, even as the pace of growth eased from June. She flagged employment, at 48.5, as the sector's persistent soft spot, sitting alongside Supplier Deliveries as the weakest of the five sub-indices and a sign that firms remain reluctant to commit to new hires. Rich said the recovery is likely to stay modest until consumer confidence firms up further, rather than turning into the stronger bounce already seen in manufacturing.Respondent commentary painted a similarly cautious picture, with cost of living pressures, fuel and petrol prices, and rising interest rates cited most often as concerns, alongside uncertainty tied to the upcoming election. Sentiment was notably weaker than in the manufacturing survey, with 64% of comments negative.Among the five sub-indices, New Orders/Business was the standout performer at 52.6, followed by Stocks/Inventories at 51.6 and Activity/Sales at 50.5. Employment and Supplier Deliveries lagged at 48.5 apiece, underlining how narrowly based the improvement remains.BNZ senior economist Doug Steel struck a more upbeat tone, noting that the past two months have delivered the best PSI readings in roughly three years and that the Activity/Sales sub-index climbed back above 50 for the first time in six months. Taken together, the data suggest New Zealand's services recovery is real but fragile, with weak hiring intentions likely to keep the RBNZ's broader growth outlook cautious heading into the back half of the year. This article was written by Eamonn Sheridan at investinglive.com.

It's a subdued beginning to the new week for futures. Slightly up for goldNQOil is a touch firmer:Oil- weekend recap & what's ahead: Iran vows to keep Hormuz shut, Trump tells Americans to accept high gas prices This article was written by Eamonn Sheridan at investinglive.com.

The unexpected delay of China’s monthly data drop shifts market risk into the Asian afternoon session, while setting up European markets for a volatile opening. Investors face potential positioning shifts across industrial commodities like copper and crude oil, which remain sensitive to Chinese demand signals. A confirmation of economic cooling could pressure regional equity indexes and the yuan, while reinforcing expectations for swift central bank intervention. China’s unusual scheduling shift for key July economic metrics puts traders on high alert for soft growth data and potential central bank easing.Summary:The National Bureau of Statistics revised its release schedule for July economic figures to 3:00 p.m. Beijing time on Monday.The upcoming data package includes key monthly indicators for industrial production, retail sales, fixed-asset investment, and real estate prices.Industrial output is expected to show deceleration from June, while overall investment remains constrained by ongoing property sector softness.Prior figures showed producer price inflation dropping to a three-month low of 3.5% in July alongside easing consumer price pressures.Markets expect retail sales to show relative resilience, bolstered by consumer trade-in initiatives launched by Beijing.Weak performance across key indicators could compel the People’s Bank of China to deploy reserve requirement cuts or interest rate reductions.China has altered the release schedule for its July economic indicators and associated news briefing on Monday, introducing an unexpected twist for global financial markets as investors seek clarity on the country’s growth momentum entering the second half of the year.The National Bureau of Statistics adjusted the timing of its monthly data drop to 3:00 p.m. Beijing time, pushing the figures into the afternoon trading window in Asia while aligning with early morning activity in Europe and pre-market preparation in North America. The data package covers core measures of economic health, including industrial output, retail sales, fixed-asset capital allocation, and residential property prices.Expectations lean toward a softer set of figures following weakness in recent price metrics. Producer price inflation dropped to a three-month low of 3.5% in July, while consumer price metrics also pointed to muted domestic demand. Factory activity is projected to show a slowdown compared to June levels, and fixed-asset investment continues to contend with headwinds stemming from a multi-year downturn in real estate development. Conversely, retail performance may provide a modest buffer, supported by targeted government policies aimed at stimulating consumer goods trade-ins.The decision by Beijing authorities to shift the timing of the briefing, as reported by Bloomberg, highlights the significance of the upcoming metrics for policy sentiment. Financial institutions note that a confirmation of broader deceleration could prompt the People’s Bank of China to implement additional monetary easing, including cuts to benchmark interest rates or reductions in bank reserve requirements, to ensure full-year targets remain achievable.---Beijing Time is UTC/GMT+8. In August, the US is on Daylight Saving Time (EDT, which is UTC-4).3:00 p.m. Beijing Time = 07:00 GMT (8 hours behind Beijing) = 3:00 a.m. US Eastern Time (EDT) (12 hours behind Beijing).The traditional morning release slot (typically 10:00 a.m. Beijing time) corresponds to 02:00 GMT / 10:00 p.m. US Eastern Time (previous day). This article was written by Eamonn Sheridan at investinglive.com.

The announcement itself carries limited direct market impact, but it reinforces a broader read that Washington is trimming its footprint and spending in secondary security theatres while its resources and political attention remain fixed on the Iran conflict. Any perception that US commitments on the Korean peninsula are softening could add a modest layer of regional risk premium for Korean won assets and defence related equities, though the scale of the drill reduction remains unspecified. The more direct market driver stays the Iran standoff itself, with Hormuz transit still halted and gasoline prices elevated; this move looks more like a fiscal and bandwidth story tied to that conflict than a standalone North Korea policy shift. Trump orders a sharp cut to US-South Korea drills over cost, a move that lines up with an administration stretched thin by its war with Iran.Summary:Trump said on social media he has instructed Defense Secretary Pete Hegseth to substantially reduce the scale of US-South Korea joint military exercises.He called the drills costly, largely funded by the US, and said they send an inappropriate signal given his relationship with North Korea's Kim Jong Un.Trump said it is too late to cancel the exercises outright, hence the reduction rather than cancellation.He separately said he asked South Korea's president to join US efforts to denuclearize Iran, and that the offer was declined.The move comes as Washington remains focused on its Iran conflict, with Hormuz tanker traffic still halted and gasoline prices a domestic political issue. President Donald Trump said on Sunday he has ordered a significant reduction in joint military exercises between the United States and South Korea, citing cost concerns and pointing to what he described as his good relationship with North Korean leader Kim Jong Un.In a post on social media, Trump said the US agreed long ago to participate in the drills, adding that they are expensive, largely funded by Washington, and send an inappropriate and hostile signal to a country he characterised as unthreatening and respectful during his time in office. He said it is now too late to cancel the exercises outright, so he has instructed Defense Secretary Pete Hegseth to substantially reduce their scale.Trump also disclosed that he had separately asked South Korea's president whether Seoul would join US efforts to denuclearize Iran, and said the response was a polite decline. He described the two matters as somewhat unrelated, though he raised them in the same post.The announcement lands as Washington remains consumed by its escalating conflict with Iran, where tanker traffic through the Strait of Hormuz has been halted for weeks and US officials have signalled more financial pressure on Tehran is coming. Scaling back a long running commitment on the Korean peninsula, on cost grounds, fits a pattern of an administration looking to trim exposure in secondary theatres as it commits resources and political capital to the Iran standoff. Whether the reduction in drills reflects a genuine shift in North Korea policy or simply a reallocation of military and fiscal bandwidth toward the Middle East is likely to be debated by regional security analysts in the coming days.The move is likely to draw scrutiny from South Korean officials and from members of Congress who have historically viewed the joint exercises as a deterrent against North Korean aggression. It also comes as Trump continues to face domestic pressure over the economic fallout from the Iran war, including elevated gasoline prices that have become a political liability heading into the November elections. Markets in Seoul and the broader region are likely to watch for any follow-up detail from the Pentagon on the scope and timing of the reduced drills.  This article was written by Eamonn Sheridan at investinglive.com.

Last week's in-line CPI print triggered a modest bond rally, with pricing for the Fed's September meeting easing slightly, according to Goldman Sachs. A cooler than expected PPI reading then helped push the S&P 500 to a record closing high last Thursday. Goldman flags that heavy Treasury issuance and record corporate debt supply tied to the AI infrastructure buildout remain structural, compounding forces behind rising term premium at the long end of the curve, a dynamic expected to persist regardless of near term data surprises. Softer employment data is viewed as largely irrelevant to the policy path, with inflation retaining primacy in the Fed's reaction function. The bank's preferred expression of these dynamics is a curve steepener, reflecting fair value at the front end against ongoing long end pressure, with the biggest payoff reserved for a recession scenario that is not currently the base case.--- Goldman Sachs says inflation still calls the shots for the Fed, even as cooler PPI data sends the S&P 500 to a record and structural Treasury supply keeps grinding long term yields higher.Summary:Goldman Sachs' Mike Mitchell said the week's CPI print was roughly in line, with core CPI up 21.5 basis points, though the read-through to core PCE looked softer (GS expect core PCE to continue to fall towards 2% next year).PPI data released since then came in cooler than expected, helping send the S&P 500 to a record closing high last Thursday.September Fed meeting pricing eased slightly to around nine basis points after the CPI data; retail sales data has also since been released. Goldman Sachs says market pricing for Fed Funds is still too high, GS is not as hawkish.Weaker recent payrolls data is not seen as a significant driver of Fed policy; Mitchell said demographic and immigration shifts mean little job growth is needed to hold the unemployment rate steady.Persistent fiscal deficits and heavy Treasury issuance are cited as structural drivers of rising term premium, alongside AI-related corporate debt issuance Goldman estimates at $250 billion this year and up to $400 billion next year.The week's 10-year Treasury auction was the highest-yielding since 2007 but was well absorbed; the 30-year auction that followed also went smoothly. Mitchell's preferred trade is a yield curve steepener, with the biggest payoff in a recession scenario he does not view as imminent. Goldman Sachs treasuries and inflation trading head Mike Mitchell said the week's CPI print landed roughly in line with expectations, with core inflation up 21.5 basis points, though the read through to the Fed's preferred core PCE gauge looked somewhat softer given a heavier weighting toward services categories that came in soft. He said the print should give the Federal Reserve some comfort heading into its September meeting, speaking on Goldman Sachs' Markets podcast. PPI data released since then also came in cooler than expected, a reading that helped send the S&P 500 to a record closing high last Thursday.Bond markets rallied modestly on the CPI data, with pricing for the September meeting easing by a few basis points to around nine basis points. Mitchell said he does not see the week's weaker payrolls report, the first month of negative job growth in some time, as a significant driver of the September decision. He noted that demographic shifts and changes in immigration policy mean the labor market needs little job growth to hold the unemployment rate steady, which has barely moved over the past year, and that inflation, not employment, remains the Fed's central focus.On the fiscal side, Mitchell pointed to a persistently difficult US budget outlook, a dynamic he described as global rather than US specific, as a structural driver of rising term premium in the bond market. He cited investor discomfort after the Fed chair's comments following the July meeting suggested higher long term yields could substitute for further policy rate moves, a stance the back end of the curve did not welcome. The week's 10 year Treasury auction, the highest yielding since 2007, was nonetheless well absorbed, helped by the softer inflation data, and the subsequent 30 year auction saw a similarly smooth outcome as the cooler PPI reading reinforced the disinflation narrative. He added that heavy corporate debt issuance tied to AI infrastructure buildout, which Goldman estimates could reach $250 billion this year and as much as $400 billion next year, is compounding the same upward pressure on term premium as government supply.Mitchell argued current real yields, near 2.5 percent at the 10 year point and closer to 3 percent at 30 years, are historically elevated and offer value for long horizon investors, alongside a diversification benefit that would reassert itself in a recession or growth shock scenario. His preferred trade is a curve steepener, on the view that front end and belly yields already price likely Fed action while the long end faces ongoing structural headwinds from fiscal and corporate supply. With the CPI, PPI and retail sales releases now behind the market, Goldman is turning its attention to minutes from the Fed's July meeting for further clues on the tone of the September policy debate. This article was written by Eamonn Sheridan at investinglive.com.

Crude held a firm bid into the weekend, with Brent on track for a 6.0% weekly gain and WTI up 5.4%, as traders priced in an extended disruption to Hormuz transit rather than any near term resolution. With essentially no crude tankers moving through the strait on Friday, against a pre-war daily average above 130 vessels, the market is treating the blockade as the operative price driver rather than headline risk alone. Escalating attacks on tankers, including the latest strikes on ADNOC vessels and a bulk carrier hit by an unidentified projectile, keep a war-risk premium embedded in freight and insurance costs. Trump's own rhetoric, both his acceptance of higher pump prices and his suggestion the US could eventually claim the strait, signals Washington sees no quick off-ramp, reinforcing the case for sustained upside risk into the new week. Iran hardens its Hormuz blockade rhetoric as Trump concedes Americans will keep paying more at the pump, with no talks in sight heading into the new week.--Updating weekend oil related news ahead of Globex open at 6pm US Eastern time Sunday. It looks like more of the same stalemate ahead this coming week. Bessent's comments last week on further economic measures to be taken against Iran have ignited analyst speculation, I'll have more to come on this separately. Summary:Iran's Deputy Foreign Minister Kazem Gharibabadi said Saturday the Strait of Hormuz will stay closed until Washington accepts defeat.Foreign Minister Abbas Araqchi said Iran has not decided whether to resume US talks, and set conditions on the strait for shipping to resume.Trump told a Friday rally that Americans should accept "a tiny little bit more" for gasoline, and floated eventually declaring the strait US territory.US gasoline averaged $4.08/gallon Friday, up 29% year on year, per AAA; Brent and WTI both rose on the week (+6.0% and +5.4%).Only two vessels transited Hormuz Friday, none carrying crude; the UAE accused Iran of striking a third ADNOC tanker, and a bulk carrier was hit by an unidentified projectile.Iran's President Pezeshkian acknowledged US sanctions and a port blockade are driving domestic inflation; Houthi missiles killed four civilians in Yemen's Mocha port Friday. Iran on Saturday called on the United States to accept defeat in their ongoing conflict, as tanker traffic through the Strait of Hormuz remained halted and President Donald Trump told Americans to brace for continued high fuel prices as a consequence of the war.There was no sign over the weekend that the two sides were moving toward peace talks or an end to the fighting, which the US and Israel launched on February 28. Iranian Deputy Foreign Minister Kazem Gharibabadi said on Saturday that the strait, a chokepoint that handled roughly a fifth of the world's oil before the war, would be opened and closed only on Iran's terms, and that the blockade would continue until Washington accepted reality. Foreign Minister Abbas Araqchi said Iran had not decided whether to resume talks with the US, telling local media that Washington first needed to meet Tehran's conditions on the strait.Trump, speaking at a political rally in New York on Friday, urged Americans to accept "a tiny little bit more" for their gasoline as the price of preventing Iran from acquiring a nuclear weapon, and suggested the US could eventually declare the strait US territory once the conflict is resolved. The average US price of a gallon of gasoline stood at about $4.08 on Friday, up 29 percent from a year earlier, according to the American Automobile Association, a trend that has fed inflation and become a political liability for Trump heading into November's congressional elections.Only two vessels transited the Strait of Hormuz on Friday and neither was carrying crude, according to ship tracking firm Kpler, a fraction of the more than 130 ships that used to cross daily before the war. The UAE accused Iran of striking a third ADNOC tanker in the strait on Friday, following two earlier incidents the previous evening, while a bulk carrier was also reported struck by an unidentified projectile.Iranian President Masoud Pezeshkian acknowledged on state television that a US blockade of Iranian ports and sanctions on oil exports had driven up domestic inflation, an unusually candid admission of the war's economic toll on Iran. Meanwhile, Iran-backed Houthi forces in Yemen fired ballistic missiles at the Red Sea port of Mocha on Friday, killing four civilians, raising fresh concern about a wider regional conflict as markets head into the new trading week with the standoff still unresolved.  This article was written by Eamonn Sheridan at investinglive.com.