12/08/2025 - 07:22 UTCThe US Dollar Index (USDX) is trading flat around 98.50 in Tuesday's Asian session, following a 0.3% increase on Monday. The dollar's movement is currently subdued as traders await the release of the key U.S. consumer inflation report for July. Recent weak U.S. jobs and PMI data have prompted traders to increase their bets on a Federal Reserve rate cut, with the CME FedWatch Tool now pricing in a 90% possibility of a cut in September. Fed officials, including Thomas Barkin and Jeffrey Schmid, are also scheduled to speak later today. A softer-than-expected inflation report could further bolster these rate cut expectations and put downward pressure on the USDX. In other news, President Trump signed an executive order extending the U.S.-China tariff truce for another 90 days, a move met with a reciprocal response from China's Commerce Ministry. However, this positive development in trade relations has so far failed to provide a significant boost to the USDX.
Asian markets showed gains on Tuesday, fueled by the U.S.-China tariff truce extension. The China SSE index gained 0.37%, while the China SZSE index rose 0.41% and the Hong Kong 50 index edged 0.39% higher as of 06:37 AM GMT. Separately, Bloomberg reported that Chinese authorities have urged local companies, particularly for government-related purposes, to avoid using Nvidia’s H20 processors. The Japan 225 index climbed to a new record high, temporarily surging to levels above 43K as markets reopened following a holiday. The broader Japan 100 also jumped to a new all-time high, with gains driven by strong performances from tech stocks. SoftBank Group soared 5.26% after reports that it is selecting banks for a U.S. listing of its payments app. Semiconductor firms Advantest and Lasertec also jumped by 6.41% and 7.47% respectively.
The main US equity indices ended modestly lower on Monday as investors awaited key inflation data, though they remain near record highs on Federal Reserve rate cut hopes. U.S. stock index futures were largely unchanged in Asian trading on Tuesday. Additionally, President Trump is set to meet with Russia's Vladimir Putin later this week to discuss the war in Ukraine. The market's focus remains on key inflation reports this week, including the Consumer Price Index (CPI) on Tuesday and the Producer Price Index (PPI) on Thursday. Nvidia stock fell 0.31% on Monday following reports that Chinese authorities are discouraging the use of its H20 chips for government-related work. Micron Technology stock rose more than 4% after the memory chipmaker raised its fiscal fourth-quarter guidance. CoreWeave Inc. saw its stock gain 7.82% after JPMorgan more than doubled its price target from $66 to $135. The significant increase was based on the cloud infrastructure company's strong prospects for continuing to win new business.
Bitcoin and the broader cryptocurrency market fell on Tuesday as risk appetite soured ahead of the release of key U.S. inflation data. The market is concerned that a higher-than-expected Consumer Price Index (CPI) report could undermine bets on a Federal Reserve interest rate cut in September, which would typically boost speculative assets like crypto.The decline occurred despite news that Metaplanet, a major corporate Bitcoin holder, had purchased an additional 518 coins. Over the past 24 hours, Bitcoin has fallen by -0.5%, while Ethereum is down -0.65%. Other major altcoins also saw significant declines, with XRP dropping -1.82% and Solana falling by -4.31%.
The euro weakened on Monday, with EUR/USD down 0.27% as traders bought the U.S. dollar ahead of Tuesday’s July Consumer Price Index (CPI) release. A stronger-than-expected reading could reduce expectations for a 25-basis-point Federal Reserve rate cut.
The latest U.S. economic data has fueled investor speculation that the Fed may resume its easing cycle at the September meeting. According to Prime Market Terminal, markets are pricing an 85% probability of a quarter-point cut.
In Europe, Italy’s July inflation remained unchanged at 1.7% year-on-year, matching both forecasts and the European Central Bank’s target. ECB rate expectations point to a likely pause in September, with 91% odds for no change and only a 9% chance of a 25bps cut.
The euro’s advance stalled despite optimism over talks between U.S. President Donald Trump and Russian President Vladimir Putin, which could yield progress toward a Ukraine ceasefire. Such a development could ease energy costs for the EU, a net energy importer, by reducing geopolitical tensions.
Looking ahead, market focus will turn to Tuesday’s U.S. CPI report, followed later in the week by producer price data, Fed commentary, jobless claims, industrial production, retail sales, and the University of Michigan consumer sentiment index. In the eurozone, key releases include the August ZEW surveys for Germany and the EU, French inflation figures, and bloc-wide growth data.
Gold prices retreated on Monday after President Donald Trump ruled out placing tariffs on imported gold bars, removing a source of market uncertainty. Investors are now focused on this week’s U.S. inflation data for clues on the Federal Reserve’s next policy move.
In a social media post, Trump confirmed gold would not be subject to tariffs, though he provided no further details. Analysts say the removal of tariff risk may shift market attention back to interest rate expectations.
On the data front, U.S. CPI figures are due Tuesday, followed by producer price data on Thursday. A stronger-than-expected inflation reading could prompt the Fed to delay a widely anticipated September rate cut, which would be bearish for gold.
A recent softer U.S. jobs report has increased market expectations for a rate cut next month. Meanwhile, geopolitical attention is on trade negotiations ahead of the August 12 U.S.-China deal deadline, as well as the August 15 meeting between Trump and Russian President Vladimir Putin in Alaska to discuss a potential Ukraine ceasefire.
Oil prices ended the session slighltly higher on Monday after last week’s steep drop, as traders looked ahead to high-level talks between the U.S. and Russia over the war in Ukraine.
U.S. President Donald Trump confirmed he will meet Russian President Vladimir Putin on August 15 in Alaska to discuss ending the conflict. Trump has indicated that both sides would need to make territorial concessions, framing the talks as a test of whether a deal is possible.
The meeting comes amid heightened U.S. pressure on Moscow, including the threat of secondary sanctions on Russian oil buyers if a peace agreement is not reached. Analysts say the recent sell-off in crude has paused as markets await the outcome.
OPEC output rose again in July under the group’s supply agreement, though gains were limited by additional cuts from Iraq and drone attacks on Kurdish oilfields. Analysts note the market remains caught between limited OPEC supply growth and the potential for a Ukraine ceasefire that could ease restrictions on Russian exports.
In corporate news, ExxonMobil and partners began production four months ahead of schedule from a fourth offshore oil vessel in Guyana. Separately, data from China’s National Bureau of Statistics showed producer prices fell more than expected in July, adding to concerns over global demand.
U.S. stocks closed lower on Monday as traders awaited this week’s inflation reports and weighed news that President Donald Trump had extended the deadline for China tariffs by 90 days.
Trump signed an executive order extending the China tariff deadline to November 9, just ahead of the original August 12 cutoff, ensuring trade uncertainty remains in focus. Separately, Trump is set to meet Russian President Vladimir Putin on August 15 in Alaska for talks aimed at ending the war in Ukraine — the first U.S.–Russia presidential summit since June 2021.
Markets are bracing for a busy economic calendar, with July CPI due Tuesday, producer price data Thursday, and retail sales and consumer sentiment on Friday. Analysts expect July’s core CPI to rise 0.3% month-on-month (3.0% year-on-year), a pace seen as consistent with a September Fed rate cut given recent labor market weakness.
The Fed is facing persistent inflation above its 2% target, while higher tariffs on imports are expected to add further upward pressure on prices. A weaker-than-expected July jobs report earlier this month, alongside downward revisions to May and June data, has boosted rate cut expectations.
In corporate news, Micron Technology rose after raising Q4 guidance, citing improved pricing and execution. Nvidia and Advanced Micro Devices were in focus after reports suggested they may pay the U.S. government 15% of revenue from AI product sales to China.
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