Weekly job claims in the US have reached their lowest level in four weeks, indicating a gradual slowdown in the labor market. Calls for a 50 basis point cut by the Federal Reserve next month appear overstated. The elevated volatility is already subsiding, with the VIX nearly halved from Monday's peak. The dollar is consolidating today within narrow ranges against G10 currencies, while gold trades within a relatively narrow range near yesterday's high. September WTI is also confined to a tight range.

Asia-Pacific Markets
Next week, Japan is expected to report a 0.6% expansion in its economy for Q2, following a 0.7% contraction in Q1. Australia will release July employment data, with job growth expected to slow by half from June's 50k rise, while the participation rate (66.9%) and unemployment rate (4.1%) are likely to remain unchanged.
The dollar held firm against the yen yesterday, albeit within Wednesday's range, and today it remains in the narrowest range for the week.
The Australian dollar posted a bullish outside up day, settling at a two-week high near $0.6595, edging slightly higher today and briefly trading above $0.6600, though struggling to maintain upward momentum.

European Markets
The eurozone and the UK end the week with light economic schedules. Noteworthy is the decline in French Q2 unemployment to 7.3% from 7.5% and a reduction in wage growth to 0.6% from 1.3%, which elicited little market reaction. The euro is trading within an extremely narrow range, about a fifth of a cent above $1.0910. It held support near $1.0880 yesterday, a new low for the week, and recovered to the $1.0920 area.
Sterling has recovered, consolidating above Wednesday's high. It also closed above the five-day moving average for the first time since the end of July. Today, it has risen slightly, breaking the $1.2770 mark.

American Markets
The US awaits the results of the NY Fed's consumer inflation survey and the monthly federal budget balance, neither of which typically move markets.
Canada's July employment report is also due. Year-to-date, Canada has created almost 200k jobs, slightly below the 265k jobs added in H1 2023. The slowdown in the labor market is more pronounced in full-time job growth, which has slowed to about 55k this year.
The US dollar slipped slightly below CAD1.3720 today ahead of the employment report.