Market Analysis
Executive Summary
Month-end flows capped a muted, low-volatility week. FX was subdued while equities drifted higher; commodities (Oil, Gold) outperformed. With Non-Farm Payrolls due next week and key PMIs on deck, we stay tactically cautious into event risk and prefer disciplined sizing until liquidity normalizes post-August.
Macro Themes – Week Ahead
- US labor: ADP preview then NFP; wages and breadth in focus.
- PMIs: China Caixin (mfg/services), US ISM (mfg/services) steer growth narrative.
- Inflation prints: Eurozone CPI; UK Retail Sales; Canada jobs & trade.
Strategy Snapshot
Into data: favor clean balance sheets and high-quality carry; fade stretched moves near month-end/quarter-start. Keep risk tight ahead of Friday’s payrolls.
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Central Bank Watch
Federal Reserve
Tone shifts toward data-dependence with sensitivity to labor and services inflation. QT/liquidity still relevant for USD funding and risk assets.
ECB / BoE
Weak growth vs. sticky core keeps a cautious stance; guidance emphasizes patience and optionality.
Select EM
Preference for credible disinflation + positive real yield; watch external balances and politics.
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G10 FX Overview
USD: Mixed—supported by relative growth/carry; event-risk sensitive.
EUR: Range-bound as soft growth offsets gradual disinflation.
GBP: Constructive while services/wages hold; vulnerable to growth wobble.
JPY: Policy-normalization risk & intervention headlines modulate trend.
Gold: Helped by lower real yields/risk aversion; buy dips within strategic uptrend. -
EM FX Monitor
Seek carry where inflation is slowing and external accounts improve. Manage liquidity pockets around ratings, elections, and commodity-linked shocks; scale entries and avoid crowded carry if vol rises.
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Cross-Asset Signals
- Rates: Front-end OIS vs. policy path; 2s10s as cycle proxy.
- Credit: Spreads/issuance as risk-appetite barometer.
- Commodities: Oil & Gold leadership; metals beta to USD.
- Volatility: G7 1M implied vs. realized to time entries/exits.
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Positioning & Flows
Use CFTC + options risk-reversals + PB flow to confirm/fade consensus. Elevated concentrations call for smaller sizes and tighter invalidation into NFP.
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Weekly Commentary (By Elior Manier)
A muted August finish; month-end flows in focus
We are concluding a fairly muted trading week, with participants usually taking the final trading week of August to reload their batteries before entering the volatile final four months of the year. The session close will be essential to watch as month-end flows tend to move markets quite largely.
Indecisive trading; Ukraine-Russia talks take a step back
Markets consolidated on relatively low-volume trading. Action in FX was almost nonexistent with tight ranges, while equities drifted higher. The S&P 500 printed fresh all-time highs; the Dow Jones holds above prior records (possible double-top risk). It isn’t shocking to get timid action ahead of Non-Farm Payrolls, particularly with the current state of markets.
Jerome Powell is changing his tone, the Federal Reserve’s independence is being challenged, and diplomatic advances are failing: German Chancellor Merz announced that Zelenskyy-Putin talks won’t take place anytime soon. With last month’s weak NFP and a contradicting July PPI putting tariff fears back on the table, the path ahead is unclear again.
Weekly performance across assets
Cryptocurrencies sold off after a decent prior week; BTC formed a double top while ETH briefly made new highs before correcting. Equities were mixed but buoyed by Nvidia earnings. Commodities led—Oil and Gold outperformed (Silver also strong), suggesting Powell’s pivot aided metals’ 2025 bull trend. Watch the US Dollar as a cross-market gauge (a stronger USD can weigh on metals).
Weekly Asset Performance, August 29, 2025 – Source: TradingView The Week Ahead — US NFP in focus
Volumes should pick up with month/quarter turn, but the global focus is Friday’s NFP. ADP arrives Thursday. Markets expect ~78k jobs added after prior revisions. Unemployment remains near 4.2%; wages will be key. Canada’s employment and trade balance land alongside US data, adding USDCAD volatility risk.
Asia Pacific
- China: Caixin Manufacturing PMI (Sun night) sets Asia’s tone; Services PMI (Tue night) refines the picture.
- Australia: PMIs & Q2 GDP (Tue), Trade Balance (Thu), remarks from RBA Governor Bullock; ~one extra cut priced for 2025.
- Japan/NZ: Limited data. BoJ next decision Sep 18; small hike probability priced (~13%).
Nikkei and Hang Seng consolidate near YTD highs; Singapore’s STI pulled back after a record high—question is profit-taking vs. tariff-drag.
US / Europe / UK
- Eurozone CPI (Tue) — core seen ~2% YoY; ECB likely to hold for now.
- UK Retail Sales (Fri) — potential GBP catalyst after a quiet stretch.
- US ISM (Tue/Thu) — manufacturing & services updates feed into growth narrative.
Read More
- US Oil (WTI) breaks $65, Russia–Ukraine talks regress
- EURUSD rangebound awaiting further news — breakout levels
- Gold (XAU/USD) eyes weekly close above $3400/oz on haven demand and DXY weakness
- The Week Ahead — US Non-Farm Employment in focus
Opinions are the author’s and not necessarily those of OANDA Business Information & Services, Inc. or its affiliates. Content provided for informational and educational purposes only. For terms and usage, see MarketPulse (marketpulse.com). © 2025 OANDA Business Information & Services Inc.
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Trade Idea Framework
Template
- Pair
- e.g., USD/JPY
- Bias
- Long / Short / Tactical / Strategic
- Entry
- —
- Stop
- — (daily-close invalidation)
- Targets
- — / —
- Horizon
- — days
Rationale & Risks
Rationale: relative growth, rate differentials, technical structure.
Risks: policy surprises, intervention headlines, volatility spikes. -
Methodology & Disclosures
We blend macro (growth–inflation–policy), market-implied indicators (OIS curves, risk-reversals), and technical structure (multi-TF trend/momentum). Views are back-tested on rolling windows; recommendations always carry explicit invalidation and risk budgets.
This material is for information/education only and does not constitute investment advice or an offer to transact. Trading FX/CFDs involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Conflicts of interest may exist across our business lines.