The next two days is going to be a tricky one for markets with month-end trading in focus. And perhaps we got a taste of that already yesterday. As market players move to price in ~55 bps of rate cuts for the Fed by year-end already, the dollar seemed to have found a floor as we approached US trading yesterday. But by the end of it, there wasn’t much to gather with the greenback having surrendered the earlier gains.
Now as we look to European trading today, major currencies are little changed so far with a lack of appetite after the back and forth action yesterday. And understandably so.
With month-end flows potentially muddying the waters, it’s hard to find conviction to dip your toes in during a time like this. That especially as the bigger picture focus will turn towards the US jobs report next Friday. So, there really isn’t much need to be rushing for anything after markets have priced in what they have post-Jackson Hole.
In terms of data releases, there is the US Q2 GDP second estimate as well as the weekly initial jobless claims for today. But barring any surprises, those won’t threaten to shake things up all too much.
So, the month-end focus and post-Nvidia earnings sentiment will be the two key drivers in looking to the day ahead
