The Jackson Hole–driven dollar selling has now been fully unwound against the EURUSD, while much of the broader decline has also been retraced. In the video above, I outline the U.S. session gains and the technical shifts that continue to drive the price action.
Overnight, Australia’s July monthly CPI came in hotter than expected at 2.8% y/y (vs 2.3% expected, 1.9% prior), with prices rising 0.9% m/m (vs 0.2% prior). Goods inflation accelerated to 2.3% y/y from 1.1%, while the trimmed mean core measure surged to 2.7% y/y from 2.1%—a sharp jump that briefly lifted AUDUSD to 0.6503. However, the currency quickly reversed and is now trading near session lows. While the monthly indicator provides an early look at inflation, it is not as comprehensive as the quarterly release. Importantly, August data (due 24 September) will capture more services inflation and comes just ahead of the RBA’s 29–30 September meeting.
In the U.S., MBA mortgage applications slipped 0.5% in the week ending 22 August, following a 1.4% drop previously. The market index eased to 275.8 from 277.1, with refinancings down to 894.1 from 926.1. On the positive side, the purchase index improved to 163.8 from 160.3. The average 30-year fixed mortgage rate edged higher to 6.69% from 6.68%. As usual, this report was not market-moving, with applications continuing to show their inverse correlation to mortgage rates.
The U.S. and Canada calendars are light today, leaving markets focused on price action and earnings. After the close, Nvidia reports results—a release carrying outsized weight given its role as a bellwether for AI and semiconductors. For more context, see Itai’s post on Post-Earnings Announcement Drift (PEAD), which highlights how Nvidia has historically exhibited strong post-earnings trends.
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