European FX Open - FOMC minutes point to September cut

The DXY fell below 101.00 overnight to lows of 100.923 as broad USD selling persisted after the US labor department said that their preliminary estimate of NFPs benchmark revision would cut the year ended March 2024 level of employment by 818k or 0.5%. That lowers the monthly average payroll gains in the twelve months to March 2024 to 178k from 246k previously.

FOMC minutes from the July meeting kept the pressure on, having revealed that the "vast majority" of the board expect a rate cut in September, while some also acknowledged there was a plausible case for cutting interest rates in July. US equities fought back after the dovish minutes.

Also overnight, Japanese flash PMIs for August indicated modest improvements across all headline gauges, while Australian manufacturing, services, and composite PMIs all reached their respective three-month highs.

Looking ahead, and Swedish industrial orders kick-off the data on the hour.

European focus will otherwise be on the ECB's negotiated wage indicator for Q2 '24.

The ECB also releases its July 17-18 monetary policy meeting minutes. Recall, Lagarde was careful in avoiding to commit in another rate cut in September during her post-meeting presser, while at the same time maintaining expectations for two more moves by the end of '24. The account will likely show that the ECB intends to proceed cautiously due to concerns over persistent services inflation.

Preliminary PMIs for August are due from the US, UK, and across the EZ.

US initial jobless claims will continue to garner much attention, while US existing home sales are also due later.

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