The US dollar continued its downward trajectory yesterday, influenced by a sharp revision in job numbers and a surprisingly strong 20-year Treasury bond auction. The recent Federal Reserve meeting minutes confirmed that the FOMC is set to begin its easing cycle next month. However, today, the dollar has shown resilience and is mostly firmer. Equities are also mostly in positive territory.
The stronger dollar and rising rates are creating a consolidative environment for gold, which is trading within yesterday's range and hovering around $2,500. Meanwhile, October WTI crude remains relatively unchanged, confined within a narrow trading band.

Asia-Pacific Markets
In the Asia-Pacific region, Japan's preliminary August PMI data showed minimal improvement. In a separate report, Japan's weekly portfolio flows indicated that Japanese investors continue to buy foreign bonds and stocks.
Australia's preliminary August manufacturing PMI rose to 48.7 from 47.5. Except for January 2024, when it briefly hit 50.1, the last time the PMI was above 50 was in February 2023.
Weaker performance in the US 10-year yield, which dipped below 3.80% for the first time in two weeks, contributed to the greenback hitting session lows near JPY 144.50 in North America yesterday. Today, it is trading quietly within yesterday’s range.
The Australian dollar also held firm, trading in a narrow range around $0.6745.

European Markets
The euro's rally to its highest level since late last year does not reflect robust economic fundamentals. This is highlighted by the flash August PMI, which underscores the eurozone's economic struggles. Meanwhile, the UK was the strongest economy among the G7 nations in the first half of the year. Although growth is expected to slow in the second half, the August PMI suggests that activity remains strong.
Yesterday, both the euro and sterling hit new highs for the year. The euro touched a level not seen since July 2023, while sterling extended its five-day rally and is aiming for a sixth consecutive session of gains today.

American Markets
Revisions to US job growth figures reveal that the economy created only 178,000 jobs per month in the year through April, rather than the previously reported 246,000. This reduction in aggregate hours worked implies higher productivity and lower unit labor costs than initially estimated.
Today is a busy day for US economic data ahead of Fed Chair Powell's speech at Jackson Hole tomorrow. Weekly jobless claims have declined over the past two weeks, and the US manufacturing PMI, which slipped below 50 in July for the first time this year, likely remains under 50.