Pivotal Moment For Markets

Japan says US trade deal not settled, awaits pharma, chip orders [Reuters]

The haircuts are now spreading to pooled investments, and office contagion now spreading to multi-family. Against a backdown of overpriced and oversupplied residential markets and a hard meltdown in price in Canada and New Zealand, housing could yet again be the last straw.

---

United States

US Economic Indicators

The Nonfarm Payroll report ended a weak of poor economic data with a killer punch. Weaker manufacturing PMIs, lower job openings, Initial Jobless Claims ticking up and low ADP count and now a catastrophic NFP, particularly the monthly revisions, and with a bigger potential revision coming next week

Revisions

Monthly revisions to prior estimates highlighted an even softer underlying trend than initially reported. June's payroll change was revised downward by 27,000, from +14,000 to a net loss of -13,000. July's figure was adjusted upward slightly by 6,000, from +73,000 to +79,000. Combined, these revisions reduced the total job gains for June and July by 21,000 from prior reports, bringing the three-month average (June-August) down to just 29,000—a stark contrast to the 150,000+ monthly pace seen earlier in 2025. Such downward adjustments, attributed to additional business reports and seasonal factor recalculations, underscore growing survey inaccuracies amid volatile economic conditions, including trade uncertainties and federal workforce reductions. This pattern echoes larger annual benchmark revisions earlier in the year, which cut March 2024 estimates by 598,000 jobs, signaling potential overestimation in initial BLS figures.

 

Unemployment Rate

The unemployment rate edged up 0.1 percentage point to 4.3%, reflecting a household survey showing labouur force participation dipping to 62.2% and a net decline of 260,000 employed workers. Average hourly earnings rose 0.3% month-over-month (meeting expectations) and 3.7% year-over-year (slightly below the 3.8% forecast), indicating moderating wage pressures that could ease inflationary concerns. The average workweek for private nonfarm employees held steady at 34.2 hours for the third consecutive month.

 

This report amplifies signals of labour market "turbulence," as described by economists, with job growth concentrated in low-wage service sectors and broader weakness raising recession risks. It bolsters expectations for aggressive Federal Reserve action, with markets now pricing in a near-certain 25-basis-point rate cut at the September 17-18 meeting (100% probability) and a 12% chance of a 50-basis-point move, per CME FedWatch data. The next report, covering September, is due October 3, 2025.

 

Currency

 

USD, via DXY, price action still poor. Yield bounced at confluence of 15 year trend and short-term trend, back in July and now the 15 year will meet the centre line of the downtrend at 96.60. We could crawl along the long-term trend further but a big move is coming to your chart soon.

 

 

DXY Daily

 

Yields

 

Yields dropped to the lower level of the immediate downtrend.

 

 

US 10 Year Government Bond Yield Daily

China

China Economic Indicators

Not much data to digest but a slight uptick in economic activity. Yields still in secular decline despite the recent uptick. 

Japan

Japan Economic Indicators

Japan is in limbo. CPI is declining but wage inflation rising. Low GDP. Demographics are really influencing Japan as the population get older but starts to decline in numbers. 9 million houses unoccupied is a testament to that. 

Japan says no trade deal has been agreed yet Trump/Lutnick are crowing about the US$0.5T that Japan is supposed to pay to the US.

The most uncertainest place in the world.

USD/YEN finally making some sense.  

USD/YEN Daily

Europe

EU Economic Indicators

All quiet economically but the usual suspects are causing trouble at the margin. France has taken Italy's mantle as core Europe's most ungovernable country. Germany remains the worst economy. 

France is in big trouble, again. Can the ECB save it? [Investing.com]

French business warns of recession risk as political turmoil deepens [FT]

The Euro continues to outperform, as diversification flows away from Trump outweigh domestic issues.

EUR/USD Daily

United Kingdom

UK Economic Indicators

If the blood shedding has started in government and the people are taking back their rights, then surely UK is cheap here relatively. Both factors have to play out together, along with the IMF bailout which should be happening this week according to rumours in The City.

Gilts

A stunning reversal in yields for long Gilts and now we're back to the scene of the crime, managing to overcome 2 high profile government resignations in a week.

UK 30 Year Government Bond Yield Daily

UK factories stumble as new orders fall back, PMI shows [Reuters]

UK secures £10bn deal to supply Norway with warships [BBC]

---

Canada

Canada Economic Indicators

Canadian pension funds are some of the biggest in the world but now they're a bit smaller

Ontario Public Pension Fund (IMCO)- approximately $550 million
CAD Ontario municipal pension fund (OMERS) - Undisclosed exact amount, estimated to be 200M+
Government of Quebec - $270 million CAD
Quebec Public Pension Fund Manager - $200 million
CAD CPP Investments - $55M

Quebec declares Northvolt battery plant partnership dead, loses $270M investment [CBC]

Australia

Australia Economic Indicators

A sudden explosion of economic reports down under underline a struggling economy but with inflation, from last week, not as under control as we were lead to believe.

‘Fragile and unconvincing’: Why the economy is struggling to rebound [AFR]

Currency

Aussie Dollar having a really good go at breaking the 15 year downtrend. The more price hangs around the line, the bigger the move.

AUD/USD Daily

What's Next?

ECB monetary policy meeting before the FED this week after will be of key importance, along with US CPI and PPI. And US 10 and 30 year bond auctions.

Worst potential outcome would be perception of FED cutting into accelerating inflation. Those bond rallies could flip on a dime.