Daily Market Outlook, August 14, 2025
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
The yen experienced its largest gain in nearly two weeks following comments from US Treasury Secretary Scott Bessent, who anticipated that Japan would raise interest rates to control inflation. Meanwhile, Asian stocks fell after a three-day increase. Japan's currency increased by as much as 0.7% against the dollar as Bessent pointed out that the Bank of Japan is lagging in its response to inflation and he expected it to increase rates. The dollar index declined for a third consecutive day, as Bessent also advocated for the Federal Reserve to implement a more accommodating monetary policy. Other Asian currencies, including the Indonesian rupiah and Malaysian ringgit, also gained value. The stronger yen caused the Nikkei-225 Stock Average to drop by 1.4%, pulling down the region's stock indices. Technology shares saw a decline while Chinese markets made gains. Bitcoin hit a record high and gold prices rose slightly. Futures for US equity indices went down by 0.1%. Bessent, who recommended that the Fed's benchmark rate should be at least 1.5 percentage points lower than its current level, mentioned that officials might have lowered rates had they been aware of the recent labor market data released shortly after the latest Federal Reserve meeting.
The ONS's initial estimate for Q2 GDP shows the UK economy grew by 0.3% quarter-on-quarter in real terms, exceeding market expectations of 0.1% growth. This upside surprise was driven by June’s robust performance, with 0.4% month-on-month growth compared to the anticipated 0.2%, alongside a revision of May’s contraction to a milder -0.1% month-on-month. However, the composition of Q2 growth raises concerns. Of the 0.3% quarterly growth, nearly all (0.27 percentage points) came from government consumption, while household consumption contributed just 0.06 percentage points. Investment overall was stagnant, concealing a notable 0.41 percentage point drag from declining business investment, offset by inventory accumulation and irregular components. On a positive note, net trade made a flat contribution, which is better than the contraction anticipated after Q1’s export surge tied to pre-tariff activity. While the 0.3% quarterly growth rate is stronger than expected, the underlying signals are less encouraging. Weak household consumption, declining business investment, and growing inventories point to subdued private sector demand heading into Q3. The growth largely stemmed from government spending on health, public administration, and defence.
Overnight Headlines
Trump Warns Putin Of Severe Consequences Ahead Of Alaska Summit
Initial Tax Data Allays Fears Of Non-Dom Exodus From UK
Bessent Says BoJ Is Falling Behind The Curve, Expects Hike
US Treasury Yields Fall As Investors Weigh September Cut
Fed’s Bostic Says He Still Expects One Rate Cut In 2025
Fed’s Goolsbee Says Upcoming Policy Meetings Will Be ‘Live’
Apple Plots Expansion Into AI Robots, Home Security, Smart Displays
BoC Weighed Cut In July, Opted To Wait For More Data
Australia July Jobs Rebound, Unemployment Dips In Major Relief
US Pharma Tariffs Weeks Away; Trump Plans For Alaska, Sources Say
Japan Gas Plant Fire Spurs Fears Of Chip Supply Chain Disruption
DeepSeek’s Launch Of New AI Model Delayed By Huawei Chip Issues
Cisco Reports Narrow Earnings Beat, Issues Inline FY Forecast
Lenovo First-Quarter Net Profit Soars Despite Tariff Challenges
Apollo In Talks To Revive $2B Debt Sale Tied To Auto Deal
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.1645-55 (2.9BLN), 1.1660-70 (2.1BLN), 1.1690-95 (1.6BLN)
1.1700 (5.5BLN), 1.1710-20 (2.8BLN), 1.1750 (1.5BLN)...
USD/CHF: 0.7975 (500M), 0.8075 (230M), 0.8100 (292M)
EUR/GBP: 0.8600-05 (478M), 0.8700-05 (1.1BLN)
GBP/USD: 1.3550 (470M), 1.3575 (206M), 1.3595 (206M), 1.3600 (1.2BLN)
AUD/USD: 0.6525-30 (660M), 0.6550-60 (675M), 0.575 (531M), 0.6600 (1.5BLN)
NZD/USD: 0.5950 (511M), 0.6000-10 (636M)
USD/CAD: 1.3700 (291M), 1.3750 (460M), 1.3860-70 (1.4BLN)
USD/JPY: 145.00 (1.1BLN), 146.00 (715M), 146.50 (254M), 146.65 (650M)
146.75-80 (500M), 147.00 (1.1BLN)
CFTC Positions as of the Week Ending August 8
Equity fund speculators have reduced their net short position in S&P 500 CME by 40,918 contracts, bringing the total to 322,114. Meanwhile, equity fund managers have decreased their net long position in S&P 500 CME by 29,005 contracts, now totaling 840,636.
Speculators have also raised their net short position in CBOT US 5-year Treasury futures by 24,994 contracts to 2,536,877. For CBOT US 10-year Treasury futures, the net short position increased by 63,204 contracts, reaching 959,834. Similarly, the net short position in CBOT US 2-year Treasury futures was elevated by 122,286 contracts to 1,325,523. The CBOT US UltraBond Treasury futures net short position rose by 11,554 contracts, totaling 228,367. Conversely, speculators slightly decreased the net short position in CBOT US Treasury bonds futures by 363 contracts to 110,440.
The net short position for Bitcoin sits at -1,501 contracts. The Swiss franc has a net short position of -27,377 contracts, while the British pound has a net short position of -33,303 contracts. The euro boasts a net long position of 115,959 contracts, and the Japanese yen has a net long position of 82,006 contracts. Speculators have cut their bearish bets on the dollar to the lowest level in four months..
Technical & Trade Views
SP500
Daily VWAP Bullish Above 6440 Target 6500
Weekly VWAP Bearish Above 6300 Target 6150
EURUSD
Daily VWAP Bearish Below 1.17 Target 1.15
Weekly VWAP Bearish Below 1.1640 Target 1.14
GBPUSD
Daily VWAP Bullish above 1.3260 Target 1.34
Weekly VWAP Bearish Below 1.3360 Target 1.3050
USDJPY
Daily VWAP Bearish Below 1.4880 Target 1.45
Weekly VWAP Bearish Below 1.4770 Target 1.45
XAUUSD
Daily VWAP Bearish Below 3380 Target 3320
Weekly VWAP Bullish Above 3350 Target 3600
BTCUSD
Daily VWAP Bullish Above 120k Target 130k
Weekly VWAP Bearish Below 118k Target 110k
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!