LOOK AHEAD: Economic Data Calendar 31/08/2026

WTI has started slightly lower today after holding Wednesday’s gains following President Trump’s comment that the US would strike Iran if conflict escalates after Iran targeted US military positions in the Middle East. In addition, there were US and Saudi coordinated strikes on Iran-backed militias based in Iraq, which have targeted Saudi’s east coast oil facilities. Iran also rejected a proposal for joint management of the Strait of Hormuz with Oman. 

• WTI is currently around $84.44/bbl after rising 6.7% to $84.60 and is up 21.7% in July. It reached a high of $85.57 following Trump’s threats. Initial resistance is at $93.50.
• Brent rose 6.9% to return above $90 reaching a high of $91.17. The benchmark is now 24.4% higher this month. Initial resistance is at $102.00.
• The toll on US oil supplies from the conflict was seen from another large 7.2mn inventory drawdown last week with the SPR down 3.8mn bringing the total since the start of April to 107.4mn. Gasoline stocks were flat but distillate rose 1.1mn while refining utilisation rose 1.1pp to 97.2%.
• Drones also struck LNG tankers at Egypt’s Port of Damietta on the Mediterranean Sea, which if these attacks continue is a new front to the conflict.
• There is currently little traffic through Hormuz with Iran continuing to strike vessels using the southern route. Also, an Iranian official told Reuters that only Iran and Oman can agree on management of Hormuz and that it must be based on their shares. It wants the entire inbound route with control of part of the outbound waterway.  

The USD/JPY range overnight was 163.23-163.91, Asia is currently trading around 163.45. The pair topped out toward 164.00 again and turned lower as the US Dollar got sold in reaction to the FOMC. I am still not quite sure how to react to the FOMC but the market's first impulse has been to sell USD’s, the risk back drop is deteriorating at a rapid rate and today is corporate month-end which could see a demand for USD’s in the London session. So I will be watching to see if this knee-jerk reaction in the USD can hold up. On the day, the first support is toward 163.00 and then the 161.50-162.00 area. The market is still sitting very short Yen as the underlying story regarding Yen weakness remains the same and core positions are reflecting that. The market is no longer listening to Jaw-boning and I suspect outside of a collapse in Cross-Yen it will require action specifically on interest rates to get this negative spiral to turnaround. Over to the BOJ tomorrow.          

• MNI FOMC Puts Off Tough Decisions For Another Day: The FOMC's July meeting resulted in a hold, highlighted by three dissents in favor of a hike and a press conference that contained hints that future action was being considered. The market reaction can't be characterized as dovish, however. The short-end of the Treasury curve rallied largely due to the inevitable dashed reaction to the ~30% implied chance of a hike coming into the meeting, and a hike by September is no longer fully-priced. But the sell-off in long-end instruments was in our view the more noteworthy takeaway and the one that should concern FOMC participants, with markets starting to wonder when the Fed will match its inflation-fighting rhetoric with action.
• Options : Close significant option expiries for NY cut, based on DTCC data: 163.00($2.04b), 163.50($1.49b), 165.00($3.96b). Upcoming Close Strikes : 162.50($1.65b Aug 3), 163.00($1.46b July 31), 163.50($1.26b Aug 4) - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 48 Points
• Data/Event : Weekly Investment Flows

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The NZD/USD had a range overnight of 0.5762 - 0.5827, Asia is currently trading around 0.5800. The NZD was again supported back toward the 0.5750 area overnight and then bounced as the market reacted to the FOMC. The price action in the US Dollar is a real wash at the moment with the market paring back immediate rate hikes but the risk back drop in Stocks is starting to turn ugly as is the situation in the Middle-East. On the day, the support continues to hold toward 0.5740-0.5760. This will need to give way if the downtrend is to reassert itself, for now though it looks like we could continue to chop around in a 0.5750-0.5850 range. I have been skewed toward fading this move higher but remain vigilant as the market is positioned quite short. Something to keep back of mind is the corporate month-end which might see some demand for USD’s in the London session.          

• MNI - Warsh remarks: Aspects helping the move: “My own judgment is this is a period of watchful thinking, not watchful waiting, and I think the score on that vote was unanimous." Asked about hiking rates to bring inflation down, Warsh says: "if inflation continues to be elevated through the forecast period, interest rates could well be part of that solution. But I wouldn't say it's in isolation."
• Options : Closest significant option expiries for NY cut, based on DTCC data:  none. Upcoming Close Strikes : 0.5640(NZD425m Aug 4), 0.5735(NZD414m July 31) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 40 Points
• Data/Event: ANZ Business Confidence 

Fig 1: NZD/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P