General Daily Market Recap – September 3, 2024

The return of US and Canadian traders fresh from the Labor Day holiday brought an influx of volatility to financial markets.

How did the main asset classes fare?

Check out the latest economic updates and market headlines that pushed prices:

Titles:

• Australia’s current account deficit increased from AUD 6.3 billion to AUD 10.7 billion (consensus deficit of AUD 4.5 billion)
• Swiss CPI was flat in August versus an expected 0.1% m/m rise, down from 0.2% previously
• The Swiss economy grew by 0.7% q/q in Q2 2024 against the expected growth figure of 0.5%, the previous reading of 0.5%.
• Canadian manufacturing PMI rose in August from 47.8 to 49.5 to reflect stronger industrial growth
• US ISM Manufacturing PMI in August: 47.2 (47.5 consensus, 46.8 previously), price component increased from 52.9 to 54.0
• US construction spending fell 0.3% m/m in August vs. 0.1% rise expected, previous reading stable
• US RCM/TIPP Economic Optimism Index improved from 44.5 to 46.1 in August (46.2 Consensus)
• New Zealand’s GDT auction saw dairy prices fall 0.4% after previously rising 5.5%

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, US 10 Year Yield, Bitcoin Overlay Chart by TradingView

Markets started the day on a relatively cool note, although crude managed to spend some time in the green, while Treasury yields fell somewhat.

The energy commodity resumed selling around the start of the London session as investors continued to worry about weak demand in China, plus an increase in OPEC+ output. Another wave of declines followed as US markets opened in a risk-off mood, also dragging stocks and bitcoin sharply lower.

US bond yields stopped falling after seeing a slightly better-than-expected August ISM manufacturing PMI report as traders likely focused on increases in prices and employment components. After all, market participants are eager to price in expectations for Friday’s NFP release.

However, stock indexes continued to fall, as the S&P 500 fell more than 2 percent, while the Nasdaq was hit 3.1 percent by another selloff in the technology sector. Shares of Nvidia fell 9.5 percent, while shares of other chipmakers such as Broadcomm and Micron followed suit.

Currency Market Behavior: US Dollar vs. Majors:

USD Overlay vs. Major Currencies Chart by TradingView

Currency market volatility came into play early in the Asian trading session as Australia’s weaker-than-expected current account balance put Aussies and Kiwis on the back foot as risk-on vibes returned.

USD/JPY continued its decline, taking a brief break from its slide during the London session, then resuming its decline ahead of the US ISM manufacturing PMI release. Still, the report managed to limit the pair’s losses for the day as the slightly better-than-expected figure eased concerns about a US recession.

USD/CHF also eased on risk aversion, although the pair moved slightly higher when the Swiss CPI fell below estimates, with a flat reading instead of the expected 0.1% rise. The rest of the major currencies proved no match for the dollar’s strength as the US currency also benefited from safe-haven flows.

Future potential catalysts for the economic calendar:

• Australian GDP at 1:30 GMT
• Chinese Caixin services PMI at 13:45 GMT
• PPI from the euro area at 9:00 GMT
• BOC Monetary Policy Statement at 13:45 GMT
• jobs available in US JOLTS at 14:00 GMT
• BOC press conference at 2:30 pm GMT
• US Beige Book at 6:00 pm GMT

All eyes and ears may be on the Loonie today as the Bank of Canada will announce its monetary policy decision and possibly make another 0.25% cut in borrowing costs. See Us Event guide for the September BOC Decision to see what else is in store for this top-of-the-line catalyst.

Another potential market driver to watch out for is US JOLTS Job Openings Reportwhich is seen as a leading indicator for the highly anticipated NFP report due on Friday.

Don’t forget to check out our new Forex Correlation Calculator!