Quick overview
- Markets started the week quietly, focusing on Eurozone inflation and PMI signals amid light trading due to holidays.
- The Eurozone Manufacturing PMI has rebounded into expansion, suggesting a potential easing of the industrial downturn.
- Silver prices surged to a 14-year high, while gold continued its rally, benefiting from safe-haven demand and reduced central bank tightening expectations.
- In the cryptocurrency market, Bitcoin fell below $110,000 after a brief recovery, while Ethereum approached its all-time high of $4,800.
Markets saw a muted start to the week, with light economic data and holiday-thinned trade, but attention is now shifting to Eurozone inflation figures and fresh PMI signals across regions.
European Manufacturing PMI Turns Positive
The highlight from Monday’s slim data calendar was the long-awaited rebound in the Eurozone Manufacturing PMI. After several years of contraction, the index finally crossed into expansionary territory, signaling that the industrial downturn may be easing. This development adds to optimism that Europe’s economy could be stabilizing, even as investors remain cautious about political uncertainties in France and the UK.
Trump Tariff Decision Shapes Sentiment
Trading volumes were light due to U.S. and Canadian holidays, yet markets reacted to news that a U.S. court halted former President Trump’s planned tariffs. The move triggered a “wait-and-see” stance among investors as legal challenges unfold. Political headlines also lingered in the background, with Trump posting about COVID vaccinations and India trade ties. Speculation about his unusually low public profile has stirred minor chatter, but none of these developments significantly shifted markets.
Currency Market Moves
The euro extended its upward trend, supported by improving manufacturing data and resilience in the broader Eurozone economy. The New Zealand dollar also posted modest gains, reflecting moderate risk appetite. U.S. stock futures edged slightly higher, though momentum remained subdued in the absence of major catalysts.
Precious Metals Shine Brightest
Silver was the standout performer, surging to its highest level in 14 years. Gold also extended its rally, marking a five-day advance and closing just $25 below last year’s record. Both metals benefited from safe-haven demand and softening expectations of aggressive central bank tightening, amplifying their appeal during a quiet session.
Key Market Events Today
Eurozone Flash Inflation Preview (Tuesday)
Markets are preparing for Tuesday’s release of the Eurozone Flash HICP. Projections point to headline inflation holding at 2.0% year-on-year, while the “super-core” measure may edge down slightly to 2.2% from 2.3%.
Oxford Economics expects continued easing in demand-driven inflation, alongside deflating services and persistently weak energy prices. Investec, however, anticipates headline inflation ticking up to 2.1%, citing energy base effects despite cooling services. Food inflation is expected to stabilize following recent increases.
From a policy perspective, markets currently price around a 34% chance of a 25bps ECB rate cut by year-end, though expectations for additional easing have faded given stronger-than-expected Eurozone growth and progress on the EU-U.S. trade agreement.
U.S. Manufacturing PMI Rebounds Strongly
The U.S. ISM Manufacturing PMI release is next in focus. Preliminary data showed the S&P Global PMI climbing from 49.8 in July to 53.3 in August, its highest level in 39 months.
The report highlighted robust new orders—the strongest since February 2024—while output rose for a third straight month. Manufacturing payrolls also posted their sharpest increase since March 2022. Rising inventories and quicker supplier deliveries contributed to the improvement, underscoring a firm rebound in U.S. factory activity.
Last week, markets were quite volatile once, with gold retreating and then bouncing to finish the week close to $4,000 but yesterday it retreated again. EUR/USD continued the upward move toward 1.17, while main indices closed higher. The moves weren’t too big though, and we opened 35 trading signals in total, finishing the week with 23 winning signals and 12 losing ones.
Gold Approaches Key Resistance
Gold prices surged back above $3,268/oz after dipping on the Fed’s steady-rate announcement, climbing nearly $200 higher by the week’s end. Momentum is being fueled by strong safe-haven demand, stable labor data, and a decisive break above the 100-day simple moving average. Technical charts now point to the $3,450–$3,500/oz zone as the next key resistance area. A sustained breakout could pave the way for further upside toward new all-time highs.
Yen Holds In A Tight Range
Foreign exchange markets saw sharp swings. Early in the week, U.S. yield differentials and Japanese capital outflows pushed the dollar above ¥150, but disappointing U.S. jobs data triggered profit-taking, causing the USD/JPY to slide by four yen from its peak. The move underscored persistent volatility as traders weighed Japan’s intervention risks against evolving Fed expectations.
USD/JPY – Weekly Chart
Cryptocurrency Update
Bitcoin Slips Below $110K Again
Cryptocurrencies remained highly active over the summer. Bitcoin (BTC) climbed to fresh highs of $123,000 and $124,000 in July and August, supported by institutional inflows and technical strength. However, remarks from Treasury Secretary Scott Bessent ruling out U.S. increases to BTC reserves triggered a steep pullback, sending the coin down to $113,000 before recovering above $116,000 last week, however sellers returned and sent BTC below $110,000, however we saw a rebound off the 20 weekly SMA (gray) yesterday.
BTC/USD – Weekly chart
Ethereum Heads to the $4,500 Level Again
Ethereum (ETH) has been similarly strong, surging toward $4,800, its highest since 2021 and near its all-time peak of $4,860. Despite a dip last week, ETH found support at the 20-day SMA, with retail enthusiasm and renewed institutional participation driving fresh upside momentum. However buying resumed and on Sunday ETH/USD printed another record at $4,941. However we saw a retreat to $,000 lows over the weekend, but yesterday buyers returned.
ETH/USD – Daily Chart
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank’s local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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