S&P 500 holds near highs, but Fed cuts could spark short-term volatility before medium-term bullish momentum resumes.
USD/JPY was grinding higher into CPI, reaching as far as 148.20 before reversing lower. The anticipation looked like the market was leaning hawkish on inflation, but the bigger catalyst wasn’t CPI itself — it was labor.
CPI landed broadly in line with expectations, but U.S. jobless claims jumped to 263K vs. 235K forecast, confirming once again that cracks in the labor market are spreading. This shift in focus matters: the Fed has already pivoted its priority toward jobs, and higher claims give them more cover to deliver a bigger September cut.
That was enough to knock the dollar lower across the board, with USD/JPY retreating along with other dollar pairs. For now, the pair remains heavy as traders weigh whether the Fed moves 25 bps or even 50 bps next week.
S&P 500 holds near highs, but Fed cuts could spark short-term volatility before medium-term bullish momentum resumes.
DXY holds near support as traders await FOMC, with three cuts priced and data setting the next move.
Sterling stalls at resistance as soft UK growth data shifts attention to next week’s BoE meeting and balance sheet risks.
