Investors zoomed in on the FOMC meeting minutes to spot clues ahead of Fed head Powell’s Jackson Hole speech.
Meanwhile, the RBNZ interest rate decision and the U.K. CPI figures shook things up in the forex scene, as some surprises came up.
Here’s how major asset classes performed in the latest trading sessions.
Headlines:
- China Loan Prime Rate 5Y for August 20, 2025: 3.5% (3.5% forecast; 3.5% previous); China Loan Prime Rate 1Y for August 20, 2025: 3.0% (3.0% forecast; 3.0% previous)
- U.S. Treasury Secretary Bessent noted that US-China talks are going well and that a trilateral meeting with the EU and Ukraine is being set up in Budapest
- RBNZ cut interest rates from 3.25% to 3.00% as expected, press conference highlighted dovish split decision
- Germany PPI for July 2025: -1.5% y/y (-1.4% y/y forecast; -1.3% y/y previous)
- ECB Chairperson Lagarde clarified that trade deals haven’t completely eliminated tariffs uncertainty
- U.K. Retail Price Index for July 2025: 4.8% y/y (4.5% y/y forecast; 4.4% y/y previous)
- U.K. Consumer Prices Index Growth Rate for July 2025: 3.8% y/y (3.8% y/y forecast; 3.6% y/y previous); Core Consumer Prices Index Growth Rate for July 2025: 3.8% y/y (3.8% y/y forecast; 3.7% y/y previous)
- Euro area Labour Cost Index Flash for June 30, 2025: 3.7% y/y (3.0% y/y forecast; 3.4% y/y previous)
- Euro area Consumer Prices Index Growth Rate Final for July 2025: 2.0% y/y (2.0% y/y forecast; 2.0% y/y previous); Core Consumer Prices Index Growth Rate Final for July 2025: 2.3% y/y (2.3% y/y forecast; 2.3% y/y previous)
- U.S. President Trump called for resignation of Fed official Cook for alleged mortgage fraud
- U.S. EIA Crude Oil Stocks Change for August 15, 2025: -6.01M (3.04M previous)
- FOMC meeting minutes: Majority of policymakers see upside risks to inflation, which was likely a greater threat than employment downside, but would take more time to get clarity on tariffs
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Risk-off flows from the previous trading day appeared to carry over to the early Asian market hours, weighing on bitcoin and equity futures.
Crude oil, however, started on bullish ground while geopolitical tensions between Ukraine and Russia remained elevated in the absence of any immediate ceasefire deal. Still, U.S. Treasury Secretary Bessent tried to keep things cool by citing that a trilateral summit is being arranged in Budapest soon, spurring some profit-taking from the energy commodity’s rally.
A bit of risk appetite peeked back in the markets, possibly driven by Bessent’s remarks citing that US-China talks are going well and positioning ahead of the FOMC meeting minutes, allowing crude oil to extend its rebound. Gains were limited, though, after ECB Chairperson Lagarde clarified that the latest trade deals haven’t completely eliminated tariffs-related uncertainty.
Gold appeared to pick up on these risk-off vibes, accelerating its climb during London market hours and sustaining its gains throughout the U.S. session while dollar weakness came in play.
Bitcoin, which managed to recover from the $113K levels to hold on to the $114K handle, continued to trade sideways for the rest of the day but still closed out with marginal gains while the dollar remained on the back foot.
U.S. equities took a nasty tumble at the start of the New York session, likely dragged by Trump’s calls for Fed official Cook to resign amid mortgage fraud allegations, putting additional weight on USD and yields as well. The FOMC meeting minutes appeared less dovish than expected, as majority of policymakers saw upside risks to tariffs outweighing the potential downside on employment, weighing slightly on Fed easing expectations.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
Forex traders had plenty to chew on throughout the day, starting with mixed Japanese mid-tier data that still kept the safe-haven yen on solid ground thanks to safe-haven demand early on.
The Kiwi sold off sharply when the RBNZ cut interest rates by 0.25% as expected while revealing a “dovish split” that had some policymakers calling for a larger 0.50% easing move.
The Aussie also took some hits from the announcement while risk-off vibes were in play, but sterling managed to break free from the beta currencies bunch when the U.K. CPI surprised strongly to the upside and dampened expectations of any BOE easing soon.
Another round of risk-off flows appeared to kick in when ECB head Lagarde clarified that the latest set of trade deals are doing little to eliminate global tariffs uncertainty, triggering further downside for AUD and NZD during London market hours.
USD pairs had a mixed reaction to Trump’s calls for Fed official Cook to resign, as the dollar tumbled versus safe-haven rivals JPY and CHF while advancing against most higher-yielders. The FOMC meeting minutes sparked a small bounce later on since policymakers seemed more concerned about higher price pressures than labor market setbacks, suggesting that the Fed might not be as dovish as previously thought.
Upcoming Potential Catalysts on the Economic Calendar
- Swiss Balance of Trade at 6:00 am GMT
- U.K. Public Sector Net Borrowing at 6:00 am GMT
- Euro area HCOB Manufacturing & Services PMI Flash at 8:00 am GMT
- U.K. S&P Global Manufacturing & Services PMI Flash at 8:30 am GMT
- U.K. CBI Industrial Trends Orders at 10:00 am GMT
- Canada CFIB Business Barometer at 11:00 am GMT
- U.S. Fed Bostic Speech at 11:30 am GMT
- Canada Producer Prices Index Growth Rate at 12:30 pm GMT
- U.S. Philadelphia Fed Manufacturing Index at 12:30 pm GMT
- U.S. Initial Jobless Claims at 12:30 pm GMT
- U.S. S&P Global Manufacturing & Services PMI Flash at 1:45 pm GMT
- Euro area Consumer Confidence Flash at 2:00 pm GMT
- U.S. Existing Home Sales at 2:00 pm GMT
- U.K. Gfk Consumer Confidence at 11:01 pm GMT
- Japan Consumer Price Index Growth Rate at 11:30 pm GMT
- U.S. Jackson Hole Symposium at 12:00 am GMT
This trading day is shaping up to be a pretty hectic one since we’ve got global flash PMI readings lined up, followed by a couple of top-tier U.S. data points (Philly Fed index and initial jobless claims) then the start of the highly-anticipated Jackson Hole Symposium.
Better keep your eyes and ears peeled for commentary by central bank officials, as these could contain strong hints on future monetary policy action.
As always, look out for global trade developments and geopolitical headlines that could influence overall market sentiment. Stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!
