Topic: FX Weekly Report

Global equities fell as bond yields and the US dollar weakened on mixed economic date from the US, Europe, and China. The S&P 500 dropped 2.6%, marking its first decline in over a month. The Bank of Canada cut its policy rate to 4.25%, citing economic concerns.

Equities fell after Nvidia’s revenue forecast missed expectations, while a rebounding dollar tempered risk appetite. Markets expect Fed rate cuts, driving the dollar towards its worst monthly drop since November.

Equity benchmarks near record highs as the US dollar drops for a 5th week. Market sentiment remains focused on expected policy easing, with the ECB’s potential September cut bolstered by a dip in wage growth.

Global equities rose for a second week as US inflation fell to 2.9%, boosting optimism for a Fed rate cut in September. The Nasdaq and Topix surged 12% and 22%, respectively. UK job creation exceeded expectations, hinting at further Bank of England rate cuts.

Monday saw major sell-offs in popular trades, with sharp declines in the Nasdaq and USD/JPY. Dovish comments from the Bank of Japan and strong U.S. data later stabilized markets. Uncertainty remains as investors await the Federal Reserve’s next moves.

Central banks are diverging in policy: the Fed left rates unchanged, the Bank of England began easing. Despite this, lower yields driven by weaker growth persist, pushing the 10-year Treasury yield below 4%. Major stock indices declined amid rising recession fears and geopolitical tensions, while the yen strengthened against the dollar.