Markets showed cautious positioning on Tuesday as investors parsed mixed global PMI data and awaited clarity from Fed officials on monetary policy direction.
The dollar traded mixed against majors, while gold briefly hit another record high and Wall Street retreated from recent peaks.
Check out the headlines and economic updates you may have missed in the latest trading sessions!
Headlines:
- Australia S&P Global Manufacturing PMI Flash for September 2025: 51.6 (52.7 forecast; 53.0 previous); Services PMI at 52.0 (51.0 forecast; 55.8 previous)
- Iraq’s plan to resume oil exports to Turkey delayed by repayment details
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Euro Area PMIs came in mixed
- Euro Area HCOB Manufacturing PMI Flash for September 2025: 49.5 (50.8 forecast; 50.7 previous)
- Euro Area HCOB Services PMI Flash for September 2025: 51.4 (50.9 forecast; 50.5 previous)
- France HCOB Services PMI Flash for September 2025: 48.9 (49.9 forecast; 49.8 previous)
- France HCOB Manufacturing PMI Flash for September 2025: 48.1 (50.1 forecast; 50.4 previous)
- Germany HCOB Services PMI Flash for September 2025: 52.5 (49.9 forecast; 49.3 previous)
- Germany HCOB Manufacturing PMI Flash for September 2025: 48.5 (50.0 forecast; 49.8 previous)
- BOE Chief Economist Pill thinks inflation is easing at a “slow pace,” but is more “comfortable” with the current inflation risks
- U.K. S&P Global Manufacturing PMI Flash for September 2025: 46.2 (47.5 forecast; 47.0 previous)
- U.K. S&P Global Services PMI Flash for September 2025: 51.9 (53.8 forecast; 54.2 previous)
- U.K. CBI Industrial Trends Orders for September 2025: -27.0 (-30.0 forecast; -33.0 previous)
- OECD sees global growth easing to 3.2% in 2025 (previous forecast 2.9%) and 2.9% in 2026 (unchanged)
- Canada New Housing Price Index for August 2025: -0.3% m/m (0.1% m/m forecast; -0.1% m/m previous)
- U.S. Current Account for June 30, 2025: -251.3B (-315.0B forecast; -450.2B previous)
- FOMC member Bowman sees three rate cuts in 2025, said policymakers should act to bring down interest rates as the jobs environment weakens
- FOMC member Bostic thinks employment risks are comparable to inflation risks, sees neutral rate at around 1.25%
- U.S. S&P Global Manufacturing PMI Flash for September 2025: 52.0 (52.0 forecast; 53.0 previous); Services PMI at 53.9 (53.0 forecast; 54.5 previous)
- U.S. Richmond Fed Manufacturing Index for September 2025: -17.0 (-10.0 forecast; -7.0 previous)
- US President Trump pushed the EU to stop buying Russian oil and gas, and threatened more tariffs
- FOMC Chair Powell says slowing labor market prompted rate cut, sees ‘challenging situation’ ahead
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
The major assets showed cautious positioning ahead of Fed Chair Powell’s speech, with investors parsing mixed signals from various Fed officials throughout the session.
European equities posted modest gains despite disappointing UK PMI data, as the Stoxx 600 advanced 0.28% while the FTSE remained essentially flat. Better-than-expected Euro Area services PMI (51.4 versus 50.5 forecast) provided support, though German manufacturing continued to contract.
Wall Street retreated from record highs as Powell characterized equity valuations as “fairly highly valued” and emphasized the challenging balance between employment and inflation risks. The S&P 500 declined 0.55% while the Nasdaq dropped 0.95%, with tech shares leading the pullback after recent gains.
Gold surged to another record at $3,790 before settling near $3,760, benefiting from safe-haven demand as Powell offered no clarity on October rate cuts while acknowledging rising downside risks to employment. The 10-year Treasury yield fell 3.9 basis points to 4.11% as bonds rallied on the Fed chair’s balanced but cautious remarks.
Meanwhile, crude oil jumped over 2% to $63.54 after Iraq’s planned Kurdistan exports stalled over payment issues, removing expected supply from calculations. Bitcoin retreated to $112,000, unable to sustain momentum amid broader risk asset weakness.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The dollar traded mixed against major currencies as Fed Chair Powell’s balanced, but cautious remarks on monetary policy sparked modest risk-taking while highlighting persistent uncertainties. During Asian hours, the Greenback showed early weakness against most majors except commodity currencies, with AUD/USD declining on disappointing Australian PMI data while initial softness in crude oil likely weighed on CAD.
The dollar briefly firmed approaching the London open but subsequently retreated as traders digested better-than-expected Euro Area services PMI (51.4 versus 50.5 forecast), though disappointing UK PMI readings across all sectors limited Sterling’s advance.
The Greenback experienced choppy price action around US flash PMI releases, with manufacturing at 52.0 and services at 53.9, both moderating from prior months. Fed Governor Bowman urged decisive action to support the weakening labor market, while Atlanta’s Bostic warned of persistent inflation risks, creating cross-currents ahead of Powell’s speech.
The Fed Chair initially pressured the dollar lower, characterizing the current situation as “challenging” with “no risk-free path,” noting near-term inflation risks tilted upward while employment risks skewed downward. His observation that equity valuations appear “fairly highly valued” prompted mild haven flows into yen and franc. By session’s end, the dollar closed marginally weaker against the majors except the Loonie and Kiwi.
Upcoming Potential Catalysts on the Economic Calendar
- Swiss Economic Sentiment Index for September 2025 at 8:00 am GMT
- Germany Ifo Expectations for September 2025 at 8:00 am GMT
- U.S. Building Permits Final for August 2025 at
- U.S. New Home Sales for August 2025 at 2:00 pm GMT
- U.S. EIA Crude Oil Stocks Change for September 19, 2025 at 2:30 pm GMT
- U.K. BOE member Greene Speech at 4:30 pm GMT
- U.S. Fed Daly Speech at 8:10 pm GMT
- Japan BoJ Monetary Policy Meeting Minutes at 11:50 pm GMT
Data releases are relatively light in the next trading sessions, so existing market themes and headlines will likely continue to move the major assets.
Germany’s September IfO expectations could cause increased volatility among EUR pairs during the London session, while traders could continue to price in FOMC members’ comments during the U.S. session.
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!
