THE USD WEEK - BIAS IS BEARISH

We wrote at Europe's Open that there is not much change at the start of the week though a Bbg report suggesting hedge funds are increasing bearish USD bets as they await details on Treasury Secretary Bessent’s new fiscal plan should work to keep it on the back foot for now.

Meanwhile, Fed official Kashkari played down concerns over surging Treasury yields, informing CBS that markets are functioning well and the Fed can stay focused on its primary tool: the federal funds rate.

Just after Close Thursday, the market's main focus US Treasury Secretary Bessent stated that buybacks could be bigger than the Usd 4bln we announced; we have a big toolkit for the Treasuries market. Bessent added the Trump admin will soon unveil an initiative to address the highest borrowing costs in years.

RISK 1 - Following the shock Bessent buybacks announcement, the DXY has posted a couple of lower tops at 100.08 and 99.69 and is also back below the arguable bearish-bullish gauge of the 200-dma again, at 99.18 last.

Low so far is late last week's double day low of 98.56. Through there again and we could be targeting 97.50-63.

It's a busy week schedule wise too.

RISK 2 - In the wake of Bessent's intervention, Thursday's Usd 44bln auction of seven-year Treasuries will garner plenty of interest.

RISK 3 - Ahead of this week's US data run, see Dashboard above, implied probability of a Fed rate hike by the next meeting in September stands at 37% and in the three remaining FOMC meetings in 2026, a full +25BPs move is not quite priced.

Main data releases look the weekly jobs reports, consumer confidence for August (seen at 90.2 vs 90.8 last) and Wednesday's PI/personal spending and PCE data for July. June's preceding Amazon Prime Day and the end of the World Cup could bring slightly softer numbers in the latter report.

RISK 4 - Interestingly, ING mulls the return of the anti-USD debasement trade amid the purported negatives of the greatest financial offensive on Iran to come and the latest breakdown in trade talks between the US and Canada.

RISK 5 - Fed Chair Warsh at Jackson Hole Friday.

There is a school of thought that Bessent's interventionist move and the attempt to bring down long-term borrowing costs will clash with Warsh’s aims/view. Bbg wrote late last week the Fed’s job of getting inflation under control (has just been made that much harder) given Warsh remarked recently rising bond yields is a good thing in the battle to contain inflation.

Any comment at his keynote speech?