Thursday's trading session in the Americas revolved around Federal Reserve Governor Christopher Waller, who signaled that he is not yet prepared to raise rates and would need to see upcoming CPI data before making a decision. Markets interpreted his remarks as indicative of where the core of the FOMC stands, and the implied odds of a September rate hike fell to roughly 50/50. Waller is a voting member of the FOMC this year, which has historically given his remarks added weight in rate-expectation pricing.

Waller downplayed the significance of the employment report, though he acknowledged that a surprise in the data could still influence his view. His primary focus is on incoming inflation data, which ensures this month's CPI release will be a major market event. The backdrop is a mixed one for Fed officials: the ISM non-manufacturing PMI for August came in stronger than expected at 55.4 versus a 54.2 estimate, while initial jobless claims were essentially in line at 206K against a 205K forecast, and Waller noted he is finally seeing some signs of disinflation in recent data — a combination that leaves the inflation print as the key swing factor for September expectations.

The other notable surprise of the day was a sharp move in the yen, with currency intervention clearly a consideration. USD/JPY slid steadily lower from early in the session, falling from 159.00 to as low as 155.30, where buyers lifted it about 50 pips. The move warrants close attention, as the usual intervention confirmation has not materialized and the decline did not unfold in a straight line. Japanese authorities have repeatedly warned against one-sided yen moves in recent months, and past episodes of intervention have typically only been confirmed days or weeks later by Ministry of Finance disclosures, leaving traders to parse price action for clues in the meantime.

Other headlines from the session:

• Deutsche Bank: The dollar is now leveraged to the AI race
• Vance: We're not talking to Iran unless they stop shooting at ships
• Preview: August non-farm payrolls by the numbers
• ISM non-manufacturing PMI for August came in at 55.4 versus a 54.2 estimate, stronger than expectations
• Fed's Waller: Finally seeing some signs of disinflation in recent data — how are the markets reacting?
• US trade deficit widens sharply in July as AI-related imports surge
• US initial jobless claims at 206K versus a 205K estimate
• BOE's Pill sees the need to raise the bank rate to 4.00%; GBPUSD moved higher on the news

Market snapshot:

• Gold up $86 to $4,472
• US 10-year yields down 2 bps to 4.77%
• WTI crude oil up $0.66 to $91.87
• S&P 500 up 1.05%
• JPY leads, USD lags