08/09/2025 Daily Reports
• Dollar Rebounds: After soft US jobs data triggered a 0.5% dollar sell-off, political turmoil in France and Japan limited further downside, keeping the greenback supported.
• Japan’s Political Shake-Up: Prime Minister Shigeru Ishiba’s resignation raises fiscal risks ahead of the Oct. 4 LDP leadership election. USD/JPY jumped above 148, though gains may stall before 150.
• France in Focus: Prime Minister Bayrou faces a confidence vote on the 2026 budget. A failure could destabilize French politics and weigh on the euro. Fitch may downgrade France’s rating later this week.
• US Data Calendar: Key events ahead include benchmark revisions to payrolls, August CPI, and $119bn in Treasury auctions. A hotter CPI print (0.4% vs. 0.3% expected) could give the dollar a temporary lift.
• Tax Deadline Factor: The Sept. 15 US corporate tax payment date may keep the dollar firm in the short term, as liquidity tightens and seasonal support kicks in.
• Euro Outlook: EUR/USD looks range-bound between 1.1650–1.1750, with Thursday’s ECB meeting unlikely to shift momentum.
• Sterling Watch: UK political reshuffle leaves Chancellor Reeves untouched, preserving market trust. EUR/GBP likely holds steady near 0.8650–0.8700 until next week’s BoE meeting.
What’s Next?
Political uncertainty abroad is ironically providing the dollar with resilience, even as US data signals a softer economy. In the near term, events like the CPI release and corporate tax deadline may keep the greenback bid, but once FOMC looms, the bearish narrative could reassert itself.
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Weak US jobs data has led to increased speculation about a rate cut; Japan’s Nikkei has surged following the resignation of the Prime Minister; oil and gold prices have rallied due to geopolitical and inflation concerns; Apple and Oracle are set to be the focus of attention this week.
• Global markets are entering the week with a combination of political and economic catalysts. In the U.S., the August jobs report, which was weaker than expected, has led to a heightened probability of a Federal Reserve interest rate cut. Some analysts are now predicting an easing of monetary policy in September. This “soft” data is providing a tailwind for U.S. stock futures and high-duration tech stocks. Investors are now focusing intently on this week’s key inflation reports, with the CPI data release scheduled for Thursday. The dollar has weakened, and gold has surged to near-record highs, reflecting a shift in investor sentiment toward a more dovish Fed. Despite the announcement by OPEC+ of a decision to increase production, there has been an increase in oil prices, as market participants continue to assess the potential for new sanctions on Russia.
• In Japan, the Nikkei index rose and the yen weakened following the surprising resignation of Prime Minister Shigeru Ishiba, who took responsibility for recent election losses. The current political uncertainty has led to speculation that his successor may pursue more aggressive fiscal policies, which would be beneficial for Japanese equities. The market also experienced an uptick following a downward revision to the country’s Q2 GDP.
• Meanwhile, Europe is also monitoring the European Central Bank’s meeting this Thursday, where a consensus expectation is for a rate hold. The Eurozone’s economic sentiment is showing a modest improvement, but recent data indicating a drop in German factory orders poses a challenge for the region’s industrial sector. In the coming week, market attention will be focused on two upcoming events: Apple’s highly anticipated iPhone event and Oracle’s earnings report on Tuesday. These events are expected to provide key insights into the tech and consumer sectors.
