It was a rather quiet session on the data and news front, but a lively session at the forefront of the market. Of course, US PCE was the main highlight of the day, with the data in line with full expectations. Also, Canada's GDP showed a larger contraction than expected in the second quarter, but it's old news as it's almost at the end of the third quarter in a market focused on the fourth quarter.
Once the US stock market was opened, it began to acquire more actions in the market. The S&P 500 and Nasdaq were sold for low drugs due to Nvidia's losses. Catalyst was a WSJ report that Alibaba has developed a new AI chip to help fill Nvidia's void in China.
The Chinese are, of course, trying to create their own AI chips, taking into account Trump's intermittent interference. While Nvidia fell, Alibaba clearly rose.
The sale of major inventory indexes has resulted in a wave of risk-off flow. We saw gold and the short-term treasury rally and the US dollar and bitcoin fall. You can also throw the end of the month flow. Nevertheless, it's mostly noise and next week's data will be the ultimate trendsetter.
At the end of the session, Fed's Daly posted it on his LinkedIn account. I thought it was time to readjust my policy right away. She expects tariff-driven inflation to be short-lived, and therefore, in her view, she supports lowering interest rates to support the labour market.
The September cut appears to be a transaction that has been completed no matter what. In the end, I want to see what happens with the data after cutting in September. If they cut strength, it could be a mistake in another policy…
As a reminder, it's a holiday in the US on Monday, Labor Day. Have a wonderful weekend!
