Japanese equity indices plummeted by more than 12% today, with the Nikkei down approximately 26.5% from its peak on July 11. In the US, S&P 500 futures dropped nearly 3%, while Nasdaq futures fell about 4.5%. This market instability has fueled speculation about an emergency rate cut by the Federal Reserve. Prior to the weekend, there was heightened speculation of a 50 basis point cut in September.
Gold is trading lower within its pre-weekend range, and September WTI crude oil extended its losses, falling below $72 for the first time since February.

Asia Pacific Markets
The dollar has declined around 12.5% against the yen since its high on July 10. Speculative positions in the futures market as of July 30 indicate that this decline was primarily driven by short covering rather than new long positions.
The unwinding of carry trades pushed the Australian dollar to a new yearly low of $0.6350 (compared to Friday's settlement of about $0.6510) before it rebounded to around $0.6450-60. The $0.6480-$0.6500 range presents nearby resistance. The Reserve Bank of Australia is set to meet first thing tomorrow.

European Markets
The euro gained approximately 1.1% before the weekend, marking its largest single-day advance since last November. Notably, this gain occurred due to poor news from the US rather than positive developments in Europe. Today's trading saw the euro rise to $1.0975, just shy of the year's high of $1.0980 set in March.
Sterling also showed resilience; after falling to nearly $1.27 before the weekend, it recovered due to the dollar's slump, settling above $1.28. Today, it approached $1.27 again before rebounding to over $1.28, with resistance from sellers around $1.2820.

American Markets
The upcoming US economic data is not expected to significantly influence market sentiment. Following a series of disappointing labor market reports—including rising jobless claims, declining hiring and quit rates, weak ISM survey results, and cooling unit labor costs and Employment Cost Index—the US reported a nonfarm payroll increase of 114,000, well below expectations and marking the fourth consecutive monthly rise in the unemployment rate. This destabilization in the capital markets has intensified speculation of an emergency rate cut by the Federal Reserve within the next week.