Today’s Top Headlines

  • Equity futures and commodities take a breather, pushing lower following the European cash open.

  • The DXY is stable above 104.50 mark with EURUSD and USDJPY hovering around 1.07 and 146, respectively.

  • UK labour data doesn’t make a compelling case for continued tightening of monetary policy.


This morning’s UK labour data was a bleak one. The labour market and growth are contracting, while inflation pressures are building. This is a typical stagflation environment for the UK.

Even though today’s 8.5% wage print probably argues for another September hike, it’s likely to be the last. Private-sector pay barely increased between June and July, while the ratio of job openings to the number of unemployed workers is falling quickly.

This means that the fundamental bias for the pound remains titled lower. With positioning still stretched long, there is arguably more downside in play.

On another note, equity futures are taking a bit of a breather after two and half sessions of gains. With the week’s main economic data point (US CPI) only coming up tomorrow afternoon, we could see tepid price action.

Keep an eye on Apple’s iPhone event later today, as that could spark some volatility if there are big surprises.

For the broader currency and commodity space, there isn’t a whole lot to get excited about. The DXY is remaining close to the 104.50 level, while EURUSD and USDJPY remain close to 1.07 and 146. A market to keep an eye on is WTI, which is finding resistance at $88.00.

FX Strength Matrix

In FX, the USD is leading the major currencies to the upside as the index bounced from key support around 104.50 with eyes looking towards tomorrow’s CPI.

The GBP is the weakest of the majors following another contraction in UK job, and as stagflation pressures in the economy continue to build.

Key Events to Watch

  • US CPI (Wednesday)
  • UK Growth Data (Wednesday)
  • Today’s Apple Event

Risk Sentiment

  • Risk appetite is leaning mostly mixed this morning with classic risk assets like equities and commodities mixed, while high beta FX is trading higher.

  • Safe havens are mixed, with bonds and safe haven FX higher, while equity volatility is mixed.

  • The biggest influence on overall risk sentiment today will be incoming US data this week (CPI tomorrow).

Keep in mind that risk sentiment can be fickle, hence why tracking it throughout the session is key.

This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. INFINOX is not authorised to provide investment advice. No opinion given in the material constitutes a recommendation by INFINOX or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

All trading carries risk.