Danske Research maintains a bearish bias on EUR/USD over the medium-term.

"The US Treasury announced that the size of the first increased long-end buyback operation conducted today will be USD6bn. This was on the lower end of expectations, as it just barely fulfils the guidance for "more than doubling" the earlier amount of USD2bn. Furthermore, the Treasury did not provide guidance for later long-end operations that are conducted roughly every 1-2 weeks. Long-end UST yields ticked modestly higher, US swap spreads tightened and EUR/USD declined, but the moves were relatively contained compared to the August announcement. Brent oil price rose back above USD100/barrel, and other energy prices remain on the rise as well. European TTF natural gas price temporarily broke through EUR80/MWh for the first time since late 2022, and electricity futures prices in Northern Europe have also risen notably in September," Danske notes.

"Overall, euro area's commodity terms-of-trade have reached their weakest level since early 2023, and over the medium-term, we see further rise in energy prices as a relatively larger downside risk to EA growth outlook (vs. the US), and a negative driver for EUR/USD," Danske adds.

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September 10 (Reuters) - Wall Street's main indexes edged lower on Thursday after producer prices data for August raised expectations of an interest rate hike this month, while an escalating conflict in the Middle East kept oil prices above $100 a barrel. [.N]

At 11:30 EDT, the Dow Jones Industrial Average was down 0.44% at 52,152.53. The S&P 500 was down 0.39% at 7,606.23, and the Nasdaq Composite was down 0.43% at 26,140.13.

The top three S&P 500 percentage gainers:

• Reddit, Inc. , up 5.5%

• Charter Communications, Inc. , up 5.2%

• Skyworks Solutions, Inc. , up 4.6%

The top three S&P 500 percentage losers:

• The Cooper Companies, Inc. , down 13.7%

• Freeport-McMoRan Inc , down 7.0%

• Baker Hughes Company , down 6.5%

The top three NYSE percentage gainers:

• Rafael Holdings Inc , up 8.7%

• Bark Inc , up 8.5%

• Designer Brands Inc. , up 8.0%

The top three NYSE percentage losers:

• Skillsoft Corp , down 29.2%

• Redwood Trust, Inc. , down 18.9%

• Biohaven Ltd. , down 14.5%

The top three Nasdaq percentage gainers:

• Tenon Medical Inc , up 76.6%

• Digital Brands Group Inc , up 50.9%

• Professional Diversity Network Inc , up 36.3%

The top three Nasdaq percentage losers:

• CDT Equity Inc , down 42.3%

• Megan Holdings Ltd , down 34.2%

• MKDWELL Tech Inc , down 34.1%

• Meta Platforms Inc : BUZZ - J.P.Morgan turns bullish on Meta's AI monetization potential

• American Eagle Outfitters Inc : BUZZ - Falls on margin pressure, sluggish apparel demand

• AeroVironment Inc : BUZZ - Rises as first-quarter results beat estimates

• Cooper Companies Inc : BUZZ - Drops on revised annual profit forecast

• Navan Inc : BUZZ - Tumbles on cost concerns, overshadowing strong quarter

• Centrus Energy Corp : BUZZ - Falls on $500 mln stock-and-warrants offering

• Shoe Station Group Inc : BUZZ - Tumbles after cutting annual profit, sales forecasts

• Macy's Inc : BUZZ - Falls as downbeat quarterly outlook clouds annual forecast boost

• Axogen Inc : BUZZ - Drops after equity raise for $200 mln BioCircuit acquisition

• Lovesac Co : BUZZ - Slides after annual forecasts below estimates

• Hagerty Inc : BUZZ - Slides after upsized $110.5 mln secondary offering

• Biohaven Ltd : BUZZ - Drops as US FDA seeks more BHV-7000 safety data

• Simmons First National Corp : BUZZ - Rises after KBW upgrades stock

• Designer Brands Inc : BUZZ - Up after raising annual forecasts

• Rio Tinto PLC :

• BHP Group Ltd :

• Southern Copper Corp :

• Free port-McMoRan Inc : BUZZ - Copper miners fall on White House hesitancy over tariff plan

• Tenable Holdings Inc : BUZZ - Tumbles after unveiling $650 mln convertible

• Kinetik Holdings Inc : BUZZ - Rises after report says pipeline operator exploring sale

• Redwood Trust Inc : BUZZ - Plunges on planned convertible debt deal

• TTM Technologies Inc : BUZZ - Falls after unveiling debt package to fund Epiq, STG acquisitions

• BKV Corp : BUZZ - Drops on boosted $500 mln convertible bond sale

• Elevance Health Inc : BUZZ - Rises after positive Q3 comments

Index RIC Index name Percent

change %

S&P 500 -0.4

S&P 500 Information Technology -0.66

S&P 500 Utilities -0.54

S&P 500 Consumer Discretionary -0.12

S&P 500 Materials -1.48

S&P 500 Industrials -0.46

S&P 500 Communication Services 0.03

(Sector)

S&P 500 Financials -0.18

S&P 500 Real Estate -0.34

S&P 500 Health Care -0.38

S&P 500 Consumer Staples 0.44

S&P 500 Energy -0.47

(Compiled by Rajarshi Roy and Miraanta Lowrance in Bengaluru)

Goldman Sachs Research previews the US August CPI report due on Friday.

"We expect a 0.23% increase in August core CPI (vs. +0.2% consensus), corresponding to a year-over-year rate of +2.40% (vs. +2.4% consensus). We expect a 0.39% increase in headline CPI (vs. +0.4% consensus), reflecting higher energy prices. Our forecast is consistent with a similar 0.22% increase in core PCE in August," GS notes.

"Looking beyond August, we expect monthly core CPI increases of around 0.2% for the next couple of months, reflecting the continued slowdown in the shelter categories and shrinking contributions from tariff-related price increases, though risks are tilted to the upside if disruptions to oil markets and associated oil price increases prove more persistent than expected," GS adds.

• EUR/GBP nudges up to 0.8598 following ECB rate rise to 2.5%

• 0.8598 is one-week peak (0.8607 was two-month high on Sept 3)

• Pre-ECB hike high was 0.8592 (Wednesday high was 0.8595)

• 30-year gilt yield rises to its highest level since 1998

• UK July GDP data due on Friday at 0600 GMT; zero growth forecast

• BoE is expected to keep its policy rate at 3.75% next week, by 6-3 vote

EURGBP

(Robert Howard is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research discusses the UST outlook in light of Treasury buyback program.

"Treasury's buyback announcement yesterday was met with some disappointment, driving back-end rates 5bps higher and long-end spreads ended marginally cheaper...The announcement followed Treasury's surprise Aug 19 guidance that it would "at least" double long-end buyback operations for the quarter. Treasury set a max purchase amount of $6b for today's buyback operation and indicated purchase sizes of "= or >$4 billion" for the remaining five long-end buyback operations this quarter," BofA notes.

"We expect Treasury to purchase close to the $6bn max today; buying materially less would risk further back-end cheapening. If Treasury cannot contain the selloff in back-end rates, it may consider more impactful debt-management measures. We continue to recommend clients buy the dip on 30y spreads due to a more activist US Treasury," BofA adds.

 Societe Generale Research discusses the fair-value estimates for USD/JPY.

"The correlations between rate differentials and EUR/JPY simply had the wrong sign. What we know is that the Big Mac Index suggests that [we] could buy a burger in Tokyo for less than half the price we would have to pay in London, and the OECD PPP measure puts fair value for USD/JPY below 100. We are nowhere near fair value but, since the catalyst for these massive mispricings was the explosion in rate differentials after 2020, the fair value that the 2020-2024 correlation between rates and USD/JPY would imply today is 135," SocGen notes.

In order to get USD/JPY down, Japan needs higher rates, but to sustain higher rates, Japan needs brighter growth prospects and, to get those, it surely needs lower oil prices. As a result, we remain sceptical about how far an intervention-led yen rally, even one supported by the US, can go in the absence of stronger Japanese GDP growth to provide credibility for Japan's higher bond yields," SocGen adds.

• AUD/USD rallied to 0.7223 overnight, sellers emerged and the pair turned lower

• US yields extended gains which helped underpin USD buying

• Drops in gold, silver and copper reinforce the USD buying theme

• AUD/USD hit 0.7200 just ahead of NY's open, it was down -0.24% early NY

• Falling daily RSI, today's drop following Wednesday's doji are concerns for bulls

• Rising monthly RSI, pair's hold above the 10- & 21-DMAs gives bulls some comfort

• US August PPI & weekly jobless claims are data risks in NY's morning
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

FX option markets have been focused on USD/JPY 150.00 since the initial drop from the mid 159's last week, but price action in this derivative suggests the biggest and most volatile moves may now be over and any deeper declines toward 150.00 will be harder fought.

Implied volatility is the market's gauge of actual/realised volatility risks, so it's been no surprise to see it surge higher across the 1- to 12-month expiry term structure beside the FX spot price drop. The benchmark 1-month expiry actually exceeded the late July intervention-led high at 10.65, spiking from 7.15 to an eventual 11.6 peak - a very significant increase. However, since USD/JPY's consolidation in the last 24 hours, 1-month expiry implied volatility has dropped back to 10.0, with other expiry dates easing beside it as longs book profits and others take advantage of the high premiums to benefit from short volatility strategies.

USD/JPY risk reversal options saw their JPY call over put (downside over upside) strike premiums ramped significantly higher as spot fell and downside options were sought - the benchmark 1-month expiry 25 delta contract from an already elevated 1.75 to 2.75 vol premium - but it's since dropped back to 2.15.

The demand for 150.00 JPY call strikes throughout the recent moves has rewarded holders from the lower spot and higher implied volatility as their value increased dramatically, but profits are now being booked there and demand has eased off. It's also worth noting the demand for JPY call reverse-knock-out (RKO) options - they remain sought due to being significantly cheaper than regular JPY call vanilla options, but the attached triggers are below 150.00, to suggest this level is a likely near-term floor.

Attention now turns to Friday's US CPI data, where FX options are demanding an elevated volatility risk premium given its potential to shape next week's Fed decision—itself already flagged as a heightened risk event by elevated implied vol pricing. The Bank of Japan's own policy announcement follows close behind on September 18, with markets largely expecting a 25-bp hike; the bigger uncertainty lies in the press conference, where clues on the pace and extent of further hikes could still move the pair. That layered event risk—CPI, Fed, then BOJ within days of each other—is keeping demand firm for options expiring just beyond each date. USD/JPY, in short, isn't out of the woods yet.
USD/JPY FXO implied volatility


USD/JPY 25 delta risk reversals

(Richard Pace is a Reuters market analyst. The views expressed are his own)

(Adds link to todays large expiries on line 4)

• EUR/USD FX option implied volatility sits close to recent lows - benchmark 1-month expiry 5.0

• Risk reversal contracts lack directional risk premium - 1-month skew neutral, easing from prior downside

• Trade flows show little conviction for EUR/USD to trade far in either direction

• More big FX option strike expiries and related hedging still helping to contain FX price action

• However, there is plenty of short term volatility risk premium in prices - flagging near term event risks

• Overnight options jumped since including Friday's US CPI, having almost ignored today's ECB and US PPI

• 1-week expiry implied volatility has risen sharply now that it captures the September 16 Fed decision

• Price action suggests the Fed could the much needed catalyst for any EUR/USD movement
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Yen trading near seven-month highs

• USD/JPY has seen 153.29-74 range, on Thursday, EBS data shows

• There was some Japanese importer demand at Thursday's Gotobi Tokyo fix, exporter sales also

• A weekly close by USD/JPY below a broken 154.78 Fibo would be a bearish sign

• 154.78 Fibo, a 38.2% retrace of the 139.89 to 163.99 (April to July) EBS rise

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Daily Chart


Weekly Chart


Correlation Chart

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• AUD/USD has traded a 14.9 pip range thus far Thursday; 0.72081-0.7223

• 0.72081 is also the low since Wednesday's four-month high of 0.7238

• US PPI data due at 1230 GMT; 0.4% MM, 5.3% YY. Core f/c 0.3% MM, 4.6% YY

• Hotter prints could spur hawkish shift in Fed expectations, inflate USD

• Reuters poll: 28 out of 93 economists expect Fed hike on Sept 16

• JPMorgan expects RBA to raise rates on Sept 29, as does Goldman Sachs

AUDUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• ECB seen raising key rate to 2.50%

• Expected to signal readiness to tighten further

• Oil's rise in lead up to meeting heightens risk hawkish outlook

• Futures imply a further 25bps hike very likely this year (Oct/Dec)

• EUR/USD which reached 1.1654 Weds trades 1.1630-41 on Thursday

• EUR/USD is yet to close above the 200-DMA at 1.1634

•
EURUSD

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Cable has traded a 12.5 pip range thus far Thursday; 1.35465-1.3559

• Those parameters are within Wednesday's 1.3531-1.35665 range

• 1.35665 is highest level since August 28 (when USD rose on hawkish Warsh)

• US PPI data due at 1230 GMT; 0.4% MM, 5.3% YY f/c. Core f/c 0.3% MM, 4.6% YY

• CPI data follows on Friday - which could tilt Fed rate scales, impact USD

• Reuters poll: 65 out of 93 economists expect Fed hold next week; 28 expect hike

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• GBP/USD edges higher as traders brace for key U.S. and UK economic data

• U.S. PPI Thu, CPI Fri pivotal for September 16 Fed rate decision

• UK has busy Fri too; July GDP, industrial & manufacturing output, trade due

• July employment, Aug inflation next week; BoE rate decision Sep 17

• Rising oil prices, escalating Iran-U.S. conflict likely to cap upside

• Resistance at 1.3575, 1.3600; support 1.3520, 1.3500, 1.3470-75

• Wednesday range 1.3531-1.3566, Asia 1.3546-1.3559
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

Sept 10 (Reuters) - USD/JPY may be set for a "new normal" 150-155 trading range, notwithstanding impending U.S. economic data, including the producer and consumer price indices due Thursday and Friday, and next week's policy announcements from the U.S. Federal Open Market Committee and Bank of Japan.

The Reuters poll forecasts 5.3% year-on-year rise in PPI against 4.7% in July and an unchanged CPI reading at 3.4% with core prices up 2.4% against 2.5% in July. USD/JPY is trading on a 153 handle ahead of these releases, and any volatility stemming from the data could be contained to two-yen or at most three-yen moves on either side of current levels.

Fed expectations will likely be swayed by these U.S. data releases. Currently, most economists polled expect the Fed to hold rates steady this year but a rising number see room for a possible hike .

For the BOJ, a 25 basis-point policy rate hike to 1.25% on September 18 has been discounted . Though some suggest the BOJ could hike by 50 bps, the most likely outcome appears to be another 25 bps hike in December. Totan Research/ICAP shows a 98% probability of a hike this month and 61% in December.

Recent flows suggest Japanese exporters will be good sellers on any USD/JPY rallies, effectively capping the upside alongside longer-term net yen shorts, including foreign holders of Japanese stocks with dynamic currency hedges. Most exporters are assuming 155+ in budgets for the fiscal year ending in March, and they will be keen to average out forward sales above this level.

In options, 150 JPY calls/USD puts have been in good demand, and there are reports of interest in reverse knock-outs and of exporter barriers at 150.00 .

Related comments , , .
USD/JPY:

(Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)

• AUD/USD flat Thur in Asia, trading subdued ahead pivotal U.S. inflation data

• U.S. Aug PPI due Thur (poll +0.4% m/m), CPI Fri (poll +0.4% m/m, +3.4% y/y)

• Futures pricing implies 60% chance FOMC hikes FFR 25 bps on Sep 16

• U.S. & Iran undertake biggest shipping attacks since start of the war

• Brent crude +0.1% to $101.33 a barrel, highest levels since May 22

• AUD target 0.72825 50-month high, break above raises topside potential

• Range Asia 0.7213-23 support 0.7122 0.6920, resistance 0.72825 0.7661
AUD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY consolidating recent losses above Tuesday's 152.89 low

• Key US Aug econ data awaited including PPI tonight, YY 5.3% eyed, 4.7% prev

• US CPI due Friday, YY 3.4% eyed, unchanged from July, core 2.4%, 2.5% prev

• USD/JPY 153.32-60 EBS so far, holding below 153.78-154.59 hourly Ichi cloud

• Descending 100-HMA just above the cloud at 154.63

• Higher-than-eyed US PPI could see cloud resistance challenged

• Fed expectations figure large too with many eyeing possible hike this year

• Option expiries today 152.00/15 $511 mln, 153.00 $1.5 bln, 153.50 $535 mln

• Also up top between 154.00-05, at 154.50 total $1.3 bln

• JGB-US Treasury rate differentials on wide side, in 2s @256, 10s @191 bps

• Related comments , , ,

• And , also , on yen carries

• US markets , , ,

• Fed/BOJ polls , , poll on PM Takaichi

• On Middle East , for more click on [FXBUZ]

USD/JPY daily:


USD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• Shares of gold miner St Barbara rise as much as 20.6% to A$0.880, highest level since March 3

• Shares post biggest intraday pct gain since Jan 21

• Co agrees to sell remaining interest in New Simberi Gold Project to Lingbao Gold

• Consideration includes A$410 million ($296.06 million) in cash

• YTD, SBM shares up 47.4%

($1 = 1.3848 Australian dollars)

(Reporting by Nichiket Sunil in Bengaluru)

• AUD/USD flat late Wed after hitting 0.7238 4-month high in London

• U.S.-Iran engaged in largest shipping attacks since war began

• Brent crude +3.8% to $101.67 a barrel, gold +1.1%, copper +0.7%

• U.S. Treasury bond buyback announcement underwhelms, UST yields higher

• Focus on U.S. inflation data: Aug PPI due Thur, CPI Fri (poll +0.4% m/m)

• AUD target remains 0.72825 50-month high, rally will accelerate above

• Overnight range 0.7210-38 support 0.7122 0.6920, resistance 0.72825 0.7661
AUD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

JP Morgan Research discusses the latest batch of data on Japanese flows and FX positions.

"The closely monitored monthly data revealed net foreign equity purchases of ¥0.6trn (JPMe: -¥1.7trn) and net foreign bond purchases of ¥2.3trn (JPMe: + ¥0.9trn) by "Trust Accounts," which reflect pension funds' activities. Both figures point to continued net accumulation of foreign assets contrary to prevailing market speculation which expects a shift towards domestic assets from foreign assets," JPM notes.

"Retail investors turned JPY short following the sharp JPY move last week.  Retail investors net purchased ¥1.3trn of foreign equities in August, the largest net purchase since January, underscoring sustained appetite for foreign assets despite a concurrent rise in retail JGB demand," JPM adds.

• Shares of gold miners gain, tracking rise in bullion prices [GOL/]

• Spot gold up 1.3% at $4,414.61 per ounce as the U.S. dollar remained under pressure, while investors awaited key inflation data this week that would provide clues to the Federal Reserve's monetary policy amid an oil price rally

• Top miners Newmont , Barrick Gold up 2.4% and 1.4%, respectively

• U.S.-listed shares of South African miners Gold Fields

rise marginally, Harmony Gold jump 3.2%, AngloGold Ashanti gain 1.4% and Sibanye Stillwater

adds 1.8%

• Canadian miners Agnico Eagle Mines rise 1.3% and Kinross Gold add ~1%

(Reporting by Pooja Menon in Bengaluru)

• GBP$ holds slight gain in NY 1fternoon, +0.14% at 1.3559; NorAm range 1.3567-1.3536

• Dollar index traded either side of flat, bid after UST buyback announcement faded

• Risk mixed, USTs, equities under pressure; precious metals, copper higher

• Early GBP rise after Bessent warned of betting against yen, said I am the house now

• Despite recent rise GBP bulls may run out of gas on fiscal, monetary concerns

• GBP$ res 1.3567 Wednesday high, 1.3600 psychological lvl, 1.3650 upper 30-d Bolli

• Supt 1.3533/31 lwr 30-DMA/Wed low, 1.3400 big-figure supt, 1.3451 the 200-DMA

GBP Chart:

(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

(Adds headline)

• NY opened near 1.1630 after EUR/USD traded downward in Europe's morning

• The pair rallied early and struck an 8-session high of 1.1654 on USD selling

• Rallies in gold, silver and USD/CNH's drop to 6.7033 contributed to the pair's rally

• Sellers emerged though after the US Treasury announced its buyback program

• USD, yields rallied & stocks, gold, silver moved downward

• EUR/USD fell to 1.1620, buyers emerged and the pair neared 1.1640 late in the day

• A halt in USD buying and lifts in gold, silver and stocks helped buoy EUR/USD

• EUR/USD traded near the 200-DMA and +0.12% in NY's afternoon

• Techs lean bullish; RSIs are rising & a monthly bull hammer is in place

• US August PPI report is a key data risk for Thursday
eurusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Danske Research discusses USD outlook going into next week's September FOMC meeting.

The Fed remaining on hold next week would mark a short-term upside risk to our bearish EUR/USD view, but the exact vote split will matter a lot for the market reaction. If Warsh again votes for a hold despite his hawkish remarks at Jackson Hole, markets could reconsider their confidence in his communication. The outcome would likely mirror the repricing seen after the July meeting, with higher long-end inflation expectations driving curve steepening and broadly weaker USD FX.

However, if he votes for a hike, and simply fails to get the committee majority on board, we would expect markets to maintain pricing for hikes in the later meetings. At the end of the day, we think the macro case for tightening policy at a later stage is still very much alive. In the latter scenario, we would consider any temporary USD sell-off as a good opportunity to re-enter USD longs," Danske addas.