GGMA Markets Briefing: Stocks Rise as Fed Hike Bets Fade Before Payrolls / USDJPY Consolidates / RBNZ's Silk Says Dec Hike Likely / Today: NFP
Good morning,
I hope all is well.
Here is a brief summary of today’s Markets Briefing: Stocks Rise as Fed Hike Bets Fade Before Payrolls, Yen Holds Its Surge
· Stocks rose and the dollar steadied near a four-month low after Fed Governor Waller said he would back holding rates if inflation keeps easing, leaving the odds of a September hike roughly even before today's payrolls.
· The yen held most of its two-day surge as yen-funded carry trades unwound, and traders priced a September BoJ hike with more to follow, while Nomura sees three straight hikes in an extreme case.
· Economists expect the ECB to hike next week and then stop, a far more dovish path than the further moves the swaps market prices into next year.
· Oil is heading for its biggest weekly gain since July on renewed US-Iran hostilities and attacks on Hormuz shipping, and US retail diesel hit a record.
· RBNZ Assistant Governor Silk said the next hike is more likely in December than October, while a former RBA official expects Australia to hike this month.
· Volkswagen's board unanimously backed an overhaul that doubles planned job cuts and halves the model lineup by 2035, with plant decisions deferred.
Today's Macro Roadmap: US payrolls at 14:30 CET decide whether the September hike comes back, with Canada's jobs report at the same minute. BoE Governor Bailey speaks at 10:50 CET and ECB's Lane at 11:00 CET, after German factory orders at 08:00 CET and before euro-area retail sales at 11:00 CET.
Full Article:
Global stocks extended their advance and the dollar steadied near a four-month low after Fed Governor Christopher Waller said he would support holding rates steady if inflation keeps easing, cutting the odds of a September rate rise to roughly even (BBG).
Bloomberg reports that MSCI's Asia Pacific gauge climbed and sent the All Country World Index higher for a third day, while the yen pared some of its two-day surge (BBG). The Nikkei rose 1.5% to 65,180, the Hang Seng gained 2.1%, the CSI 300 added 0.4% and MSCI's emerging-market index rose 0.5%. S&P 500 futures were up 0.1% at 7,760, Nasdaq futures 0.2% and Euro Stoxx 50 futures 0.1%.
Regarding the Federal Reserve, Waller said his decision will be heavily influenced by August inflation data due next week, that he would consider a hike if inflation comes in hot, and that recent data show some signs of disinflation (BBG). Treasuries rallied on the remarks, led by the two-year, which had topped its highest level since January 2025 earlier in the week, and swaps now price about even odds of a quarter-point move on 16 September down from well above even earlier in the week (BBG). Reuters reports that JPMorgan analysts read Waller as pushing back against Chairman Warsh's argument that underlying inflation has not improved, and that the bar for the data-dependent majority to hike this month remains elevated (Reuters). Reuters also reports that part of the rise in yields reflects bets that the neutral rate is moving higher on AI capital spending and heavy government borrowing, with Waller saying he is likely raising his own estimate (Reuters). The two-year yield was at 4.33%, the ten-year at 4.76% and the thirty-year at 5.24%.
In currencies, a rush to unwind yen-funded carry trades sent the yen to a one-month high on Thursday after hawkish comments from Governor Kazuo Ueda and board member Hajime Takata, and traders now price a quarter-point move on 18 September with nearly three more by July (BBG). Nomura's Yujiro Goto said the BoJ could hike at three consecutive meetings through December in an extreme scenario where yen weakness persists, and that Prime Minister Takaichi's stance on further tightening will decide whether the yen's gains hold (BBG). JPMorgan warned that a break below the post-intervention low could see selling beget further selling given the size of remaining short positions, while calling expectations around the pension fund and the BoJ a bit excessive (BBG). Reuters reports that Takaichi is set to retain Satsuki Katayama as finance minister in a reshuffle later this month, signalling continuity on foreign exchange policy (Reuters). The dollar steadied after sliding to its lowest since May as traders cut their bets on a September Fed hike and speculators had already trimmed dollar longs sharply since July (BBG). The yen was at 156.38 per dollar, weaker by 0.4% on the day, and the ten-year JGB yield fell 5 basis points to 2.91%.
Regarding other central banks, economists in a Bloomberg survey expect the ECB to raise the deposit rate by a quarter point on Thursday and then hold through 2027, a far more dovish path than the three further hikes markets price by mid-2027 (BBG). RBNZ Assistant Governor Karen Silk told Bloomberg that the next hike is more likely in December than October, although both remain open, and that she was among four of six committee members flagging upside inflation risks (BBG). In Australia, former RBA official Jonathan Kearns said he is pretty sure the bank hikes this month and expects house prices to fall by around a tenth, the largest drop since the 1930s (BBG). Hungary's central bank plans to lower its inflation target and pause rate cuts at its 22 September meeting, according to a person familiar with its planning (BBG). Bank of England Chief Economist Huw Pill said governments pushing central banks to finance deficits is the defining challenge to their independence (BBG).
In commodities, Brent held near $96 and WTI near $92, both heading for their biggest weekly gain since July as renewed US-Iran hostilities and Iranian attacks on vessels in the Strait of Hormuz rebuilt the risk premium (BBG). Reuters reports that US retail diesel hit a record on Thursday as the Gulf disruption and Ukrainian strikes on Russian refineries tightened distillate supply, with East Coast stocks at a record low ahead of the harvest and heating seasons (Reuters). Gold steadied around $4,471 after rising more than 2% on Thursday and Bitcoin eased 0.6% to 80,948 after its surge on the Waller remarks (BBG). Copper slipped 0.1% and a broad commodity index eased on the day while staying higher on the week.
In corporate news, Volkswagen's supervisory board unanimously backed an overhaul that doubles the group's planned job cuts, halves the model lineup by 2035 and trims investment, with the works council calling the headcount figure a planning assumption and no plant closing immediately (BBG). Anthropic is set to finalise an expansion of its revolving credit facility ahead of the public filing for an IPO it wants to be as large as SpaceX's or larger, according to people familiar with the matter (BBG).
Regarding data, Japanese households cut inflation-adjusted spending by 3.6% in July from a year earlier, an eighth straight decline against a 1.6% fall expected, although spending rose 0.5% on the month (BBG). New Zealand building volumes rose 4.8% in the second quarter against a 1.0% consensus, Korea's July current-account surplus narrowed to $42.08 billion from $49.73 billion, and Sweden's second-quarter current-account surplus widened to SEK 126.2 billion from SEK 93.9 billion.
Today's Macro Roadmap: The US employment report at 14:30 CET is the last labour print before the Fed's 16 September decision, with consensus looking for a modest rebound in payrolls after July's fall and Canada's jobs report at the same minute (LS). Bank of England Governor Andrew Bailey speaks at 10:50 CET and ECB Chief Economist Philip Lane at 11:00 CET inside the quiet period. The UK Decision Maker Panel survey at 10:30 CET and euro-area retail sales at 11:00 CET fill the European morning.
Time Stamp: 4 September 2026, 08:03 CET