Daily Market Outlook, August 21, 2025
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
Asian tech stocks increased as Nasdaq 100 futures bounced back from earlier drops, aided by dip buyers who stabilised the index during late US trading. In the MSCI Asia Pacific Technology Index, two stocks appreciated for each one that dropped, with Advantest and Samsung Electronics among the gainers. Taiwan Semiconductor Manufacturing Co. experienced a 0.9% rise following its largest one-day decline in four months on Wednesday. Nasdaq 100 contracts moved up by 0.1%, while NVIDIA gained 0.2% in after-hours trading after two consecutive days of losses. Oil maintained its upward momentum after a report indicated a decrease in US reserves. Treasuries stabilised after a rise across the board in the previous session. The yield on Japan’s 20-year government bond reached its highest level since 1999, and China’s 30-year government bond yield hit its peak since December due to a selloff coinciding with a local stock rally. Tech shares, especially large-cap stocks, faced pressure over the last two sessions, fuelled by concerns that the sharp rally since April may have been excessive. Nonetheless, markets remain in a wait-and-see stance as central bankers gather in Jackson Hole, Wyoming, with investors anticipating comments from Federal Reserve Chairman Jerome Powell.
The July minutes revealed a more cautious tone regarding Federal Reserve easing, despite two dissenting voices advocating for a rate cut dominating market sentiment. The majority expressed concerns about how tariffs might impact the inflation outlook, with underlying inflation continuing to overshoot expectations. Most members appeared reluctant to dismiss the visible effects observed thus far. On the labour market, the committee collectively remained optimistic, noting that while hiring had slowed, unemployment stayed low and the economy operated near full employment. Although monetary policy might be slightly restrictive, the FOMC felt well-positioned to respond to future developments. In contrast, the dovish members argued against waiting for full clarity, suggesting that once tariff effects are stripped out, the inflation profile has shown improvement. They emphasised placing greater focus on employment risks. However, the overall sentiment seemed to favour a "wait-and-see" approach, with the majority maintaining a cautious stance. Whether the weak payrolls report shifts more opinions remains uncertain. Chair Powell's remarks at Jackson Hole on Friday are expected to shed light on how the evolving data is being interpreted.
Overnight Headlines
Inflation Risks Trouble The Fed More Than The Labor Market
Fed’s Cook Says She Won’t Be Bullied Into Stepping Down
Trump Mulls Firing Fed Official On Accusation Of Mortgage Fraud
Trump Turns Up The Heat; Fed Chair Powell Tries To Keep His Cool
Russia Says It Must Be Included In Any Ukraine Security Guarantees
Japan’s 20-Year Yield Rises To Highest Since 1999 On Fiscal Woes
China’s 30-Year Bond Yields Jump To Highest Level This Year
NZ Trade Deficit Narrows To $578M In July As Exports Rise 10%
Meta Freezes AI Hiring After Blockbuster Spending Spree
Amazon Pushes Discounted Prime Membership For Young Adults
Microsoft Activists Detained Protesting Israel Ties At HQ Campus
Lowe’s To Buy Foundation Building Materials For $8.8B
AIA Profitability Gauge Grows On Stronger Sales In Hong Kong
MCD’s To Cut Combo-Meal Prices After Convincing Franchisees
Modivcare Files For Bankruptcy Amid Sector Stress
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
USD/JPY: 145.95-10 (2.33BLN), 146.70-80 (2.21BLN), 147.10-20 (514M)
147.70-75 (521M), 147.85 (220M), 148.00 (460M), 148.50 (823M)
149.00 (1.2BLN). EUR/JPY: 170.50 (377M), 172.00 (
USD/CHF: 0.7935 (266M). EUR/CHF: 0.9250 (415M), 0.9300 (465M)
0.9350-60 (537M), 0.9400 (404M), 0.9425 (300M), 0.9550 (505M)
GBP/USD: 1.3300 (460M), 1.3340-50 (330M), 1.3400 (322M)
1.3450-60 (340M), 1.3475-80 (315M), 1.3650 (884M)
EUR/GBP: 0.8600 (1.42BLN), 0.8725 (252M)
AUD/USD: 0.6275-80 (640M), 0.6400-10 (741M), 0.6450-70 (767M)
0.6500-10 (1.0BLN), 0.6550-70 (953M), 0.6590-00 (2.0BLN)
USD/CAD: 1.3705 (386M), 1.3745-55 (725M), 1.3775 (630M)
1.3820 (800M)
CFTC Positions as of the Week Ending August 15
Speculators have reduced their net short position in CBOT US Treasury bonds futures by 49,646 contracts, bringing it down to 60,794. They have also decreased their net short position in CBOT US Ultrabond Treasury futures by 19,235 contracts to a total of 209,132. Additionally, speculators have lowered their net short position in CBOT US 10-year Treasury futures by 17,611 contracts, resulting in a position of 942,223. Conversely, there has been an increase in the net short positions for CBOT US 5-year and 2-year Treasury futures, by 29,492 contracts to 2,566,369 and by 54,074 contracts to 1,379,597, respectively.
Equity fund managers have raised their net long position in S&P 500 CME by 46,675 contracts, bringing it to 887,310, while equity fund speculators have increased their net short position by 74,016 contracts to a total of 396,132.
The net long position in Japanese yen stands at 74,234 contracts, and the euro has a net long position of 115,431 contracts. On the other hand, the British pound has a net short position of -39,093 contracts, and the Swiss franc shows a net short position of -28,043 contracts. Lastly, Bitcoin’s net short position is recorded at -742 contracts...
Technical & Trade Views
SP500
Daily VWAP Bearish Above 6440 Target 6500
Weekly VWAP Bullish Above 6300 Target 6500
EURUSD
Daily VWAP Bullish Below 1.17 Target 1.15
Weekly VWAP Bullish Below 1.1640 Target 1.14
GBPUSD
Daily VWAP Bearish below 1.35 Target 1.34
Weekly VWAP Bullish Below 1.3360 Target 1.3050
USDJPY
Daily VWAP Bullish Below 1.4880 Target 1.45
Weekly VWAP Bearish Below 1.4770 Target 1.45
XAUUSD
Daily VWAP Bullish Above 3330 Target 3400
Weekly VWAP Bearish Above 3350 Target 3600
BTCUSD
Daily VWAP Bearish Below 116k Target 110k
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!