President Trump will meet with Chinese President Xi Jinping again in November. Xi said the US-China relationship will be one of "strategic stability based on respect, fairness and reciprocity."

On trade, US Trade Representative Greer said: "We have reached agreements with China on a sub-set of goods we can trade." The framing points to a goods-by-goods approach rather than a single sweeping accord, with the leaders' November meeting now the next scheduled checkpoint between the two governments.

On the data front, final University of Michigan consumer sentiment — a monthly gauge of how households view their finances and the broader economy — printed at 48.1, beating expectations of 47.6. US August durable goods orders, a read on demand for long-lasting manufactured goods often watched as a proxy for business investment, were flat at 0.0%, compared with a forecast of -0.4%. Both series landed ahead of expectations.

Market Snapshot

• US 10-year yields: up 2.6 bps at 5.16%
• WTI crude oil: down $2.15 to $92.44
• Gold: up $8 to $4,286
• Currencies: JPY leads, NZD lags
• S&P 500: up 0.5%

Verbal Intervention Drives the Yen

The main market-moving event of the day was verbal intervention on the yen, which sent USD/JPY down more than 150 pips. The rhetoric did not appear to be followed by any action, leaving the situation a bit of a game of chicken. Because Japanese officials do not pre-announce levels and typically confirm actual operations only after the fact, traders are left pricing words as much as deeds — a gap that helps explain why rhetoric alone carried the move. Traders were wary of a late-Friday round of official selling in USD/JPY, similar to what was seen earlier this year. There were no late buyers, and the threat of intervention also hangs over the market's open on Sunday.

Dollar Softer as Iran Peace Talk Headlines Build

More broadly, the dollar was a touch softer as inflation worries eased. The main driver was yet another round of headlines about Iran peace talks. Skepticism remains plentiful, but oil fell more than $3 from its highs, so there are believers out there. This appears to be the final effort at diplomacy for the US side, as the midterms provide something of a deadline, with Republican polling numbers poor due to inflation and an unpopular war. That calendar pressure turns each diplomatic headline into a political variable as much as a market one.

Equities: Gains Amid Rotation

In equity markets, profit-taking hit some of the hottest names of the month so far, including Meta and Intel, while laggards such as Booking, CVS and PayPal made strong gains. That pattern looks more like degrossing — trimming risk across a book without necessarily changing one's view on the economy — than a changed view on the economy, but it was still enough to drive a solid day of gains despite some up-and-down moves to start the session. Hopes of Iran diplomacy lent support, as did a retreat from the +5.20% highs in 10-year yields.