Headlines

• How have interest rate expectations changed after this week's events?
• BOJ Governor Ueda says to expect to keep raising interest rates in response to economic, financial conditions
• BOJ Governor Ueda says will conduct monetary policy in a manner so as to not fall behind the curve
• BOJ leaves rates unchanged as expected. Vote was 8-1
• ECB's Kocher: Decisions to be based on incoming data to bring inflation back to the 2% target
• Euro area inflation nudges up in July, keeps the pressure on the ECB
• French inflation accelerates in July, reaffirming the broader trend in the region
• Italy July preliminary CPI +2.8% vs +2.8% y/y expected
• German unemployment rises by slightly more than anticipated in July
• South Korea's KOSPI extends rebound in closing stages of the week, now up 17% today

Market Snapshot

• USD and AUD lead; CHF lags on the day
• WTI crude up 0.7% to $84.20
• European indices mostly higher; S&P 500 futures up 0.5%
• US 10-year yields up 1.2 bps to 4.675%
• Gold down 1.1% to $4,057
• Bitcoin down 1.3% to $63,887

Market Analysis

Markets continue to experience volatile swings as the trading week draws to a close and the month nears its end.

The rebound in technology shares extended further after South Korea's benchmark KOSPI index posted gains of nearly 18% today, helping to establish a more constructive tone across broader equity markets.

European stocks are pushing modestly higher, with the DAX up 0.7% and the CAC 40 up 0.9%. US futures are also posting solid gains heading into the weekend, with S&P 500 futures up 0.5% and Nasdaq futures up 1.3%. The absence of concerns around hyperscaler spending this week has further supported sentiment, at least for the time being.

The Japanese yen experienced another bout of volatility amid a suspected second round of intervention. USD/JPY had recovered from yesterday's decline to settle above 160.00 earlier in the session before being rapidly pushed down to 158.55. A gradual recovery followed, and the pair was last trading up 0.3% at 160.05. The intervention dynamic is playing out against the backdrop of the BOJ's decision to leave rates unchanged with an 8-1 vote, even as Governor Ueda signaled the central bank's intent to keep raising rates and not fall behind the curve—a stance that leaves traders weighing the pace of policy normalization against persistent currency pressure.

The US dollar is also seeing a modest rebound, with EUR/USD down 0.3% to 1.1495 and USD/CHF up 0.5% to 0.8095 on the day.

On the economic data front, euro area inflation figures for July came in slightly hotter than expected. The uptick was not isolated: French inflation also accelerated, while Italy's preliminary CPI matched expectations at 2.8% year-on-year. Adding to the mixed picture for the eurozone, German unemployment rose by slightly more than anticipated in July. Together, these readings reinforce the ECB's data-dependent posture, with officials such as Kocher emphasizing that incoming data will guide decisions aimed at returning inflation to the 2% target. Markets will be watching subsequent data prints and ECB commentary for further clarity on whether a September move remains on the table.

In commodity markets, oil prices are settling slightly higher, with WTI crude up 0.7% to $84.20. US 10-year Treasury yields are also nudging up by nearly 2 bps to 4.68%. Gold is down 1.1% to $4,057 as precious metals continue their back-and-forth trading pattern.