Investor sentiment in Asia opened the week on a mixed note, with traders weighing better-than-expected Chinese manufacturing data against fresh signs of weakness in other export-driven economies. Hong Kong shares found support after the private RatingDog survey showed China’s manufacturing sector returning to mild expansion in August, offering some relief for a market battered by global trade uncertainty.
In contrast, Japanese equities tumbled sharply, setting the tone for a sluggish session across much of Asia. The divergence highlights the uneven impact of US President Donald Trump’s sweeping tariff regime, which continues to weigh on regional exporters. Despite China’s uptick, broader Asia remains under pressure from weaker global demand.
Manufacturing surveys released Monday highlighted the challenges. Japan’s S&P Global Manufacturing PMI rose modestly to 49.7 in August from 48.9 but remained below the 50 threshold for a second straight month. South Korea’s PMI printed at 48.3, an improvement from July’s 48.0 but marking the seventh consecutive month of decline. Taiwan also remained in contraction, reinforcing the strain on Asia’s export engines.
At the same time, investors digested a major legal development in Washington. A U.S. federal appeals court ruled that most of Trump’s reciprocal tariffs were illegal, arguing he had exceeded his presidential authority with the sweeping April 2 “liberation day” announcement. The decision injects new uncertainty into U.S. trade policy just as markets brace for additional volatility tied to economic data.
North American markets are closed for holiday today, but attention is already turning to a heavy week of global releases. The U.S. nonfarm payrolls on Friday will be crucial in shaping expectations for the Fed’s September rate cut, while Eurozone CPI, Swiss CPI, Canada’s jobs report, and Australia’s GDP all promise to keep volatility elevated.
In currencies, European majors are leading the way higher at the start of the week, with Euro the strongest performer followed by Sterling and Swiss Franc. Dollar is the laggard, with traders wary of holding long positions ahead of a data slate that could prompt faster Fed easing. Aussie and Loonie are also under pressure, while Kiwi and Yen are trading mid-pack.
In Asia, at the time of writing, Nikkei is down -1.36%. Hong Kong HSI is up 1.93%. China Shanghai SSE is up 0.32%. Singapore Strait Times is up 0.12%. Japan 10-year JGB yield is up 0.02 at 1.625.
Silver set to outpace Gold again once 40 barrier clears
Silver’s uptrend reignited last week, riding alongside Gold’s surge and now threatening to eclipse it in strength. The metal is pressing against 40 psychological level, its highest in over a decade, with markets sensing that Fed policy easing this month could provide an extra push. Historically, Silver often lags Gold at the start of a rally but outperforms once momentum builds, and the current advance could also fit that pattern.
That precedent is clear. During the 1970s bull market, Gold’s gain of roughly 2,200% was extraordinary, but silver’s surge of more than 3,000% was even more dramatic. In the 2008–2011 cycle, Gold advanced about 150% from trough to peak, while Silver exploded nearly 400%, touching almost 50. Even in the shorter 2020 rally, gold rose a solid 35% while silver soared 140%. The pattern is unmistakable: once the metals market gains conviction, Silver becomes the standout.
While Gold has provided the steady safe-haven anchor, while Silver’s dual role as monetary and industrial metal gives it more torque once investors commit to a full-fledged precious metals run. In this context, Silver looks positioned to extend higher even if Gold pauses for breath ahead. As long as the rally is not purely defensive, Silver stands to attract more speculative and retail flows, creating conditions for further outperformance. With a dovish Fed providing policy fuel, the next leg higher could confirm silver’s leadership role in this phase of the precious metals cycle.
Technically, Silver is now pressing against the rising channel resistance that has defined the uptrend from 17.54 (2022 low). Sustained break above that barrier, followed by decisive move through 100% projection of 21.92 to 34.84 from 28.28 at 41.20, would open the door to upside acceleration consistent with a fifth-wave extension.
That would set the stage for 138.2% projection at 46.13, or even further to 161.8% projection at 49.18, which is close to 50 psychological level.
For the near term, the bullish outlook remains intact as long as 36.93 support holds. Any dips are likely to be seen as opportunities within the trend rather than signs of exhaustion.
China RatingDog PMI manufacturing rises to 50.5, relief rally rather than turning point
China’s manufacturing sector showed a modest improvement in August, with the RatingDog Manufacturing PMI rising from 49.5 to 50.5, beating expectations of 49.9 and returning to expansion. However, RatingDog described the uptick as a “breath of relief rather than a sustained rally,” reflecting cautious optimism. By contrast, the official NBS survey offered a more subdued view, with manufacturing inching up from 49.3 to 49.4 and non-manufacturing steady at 50.3.
The RatingDog report highlighted firmer new orders, which pushed inventories of raw materials and finished goods higher. Export demand remains weak but showed slower contraction. Yao cautioned that external demand may have been pulled forward while domestic demand stays soft, limiting the scope for sustained output gains without stronger local consumption.
Meanwhile, input costs continued to climb under the “Anti-involution” policy backdrop, and those upstream pressures are now filtering into output prices, ending an eight-month streak of falling charges. With profit recovery still slow, the durability of the latest rebound depends on whether exports can stabilize further and domestic demand begins to catch up.
Dollar risks fresh slide on weak NFP; Eurozone CPI, Swiss data eyed
The coming week shifts the spotlight back to the US, where a heavy calendar of ISM surveys and the August nonfarm payrolls will determine the tone into the September Fed meeting. With markets already leaning heavily toward a cut, the data could decide whether expectations consolidate around a standard 25bps move or drift toward more aggressive scenarios.
July’s weak jobs report was the catalyst that pushed September bets over the line, especially after painful downward revisions for earlier months. That string of poor data persuaded investors that the Fed has little room to wait if it wants to avoid over-tightening into a slowing economy. Interim jitters aside, Fed Chair Jerome Powell’s dovish pivot at the Jackson Hole Symposium gave traders further confidence.
Still, Friday’s labor data could test those assumptions. A modest upside surprise might not be enough to dislodge expectations, but any meaningful undershoot would sharpen fears of a Fed misstep. Markets would quickly speculate whether the central bank needs to move faster. Talk of a 50bps move in September, floated by Treasury Secretary Scott Bessent, could regain attention in that scenario. Alternatively, investors could start to price a series of consecutive cuts in September, October, and December, producing a three-cut sequence to stabilize growth.
Any massive downside shock would also carry immediate market impact. Dollar selling would likely accelerate, particularly against higher-yielding or pro-cyclical currencies, as investors price in faster Fed accommodation. At the same time, equities and Gold could see a renewed bid on looser policy expectations.
Europe will also feature prominently with the release of Eurozone flash CPI. ECB minutes from July revealed that policymakers still see room for one more cut, but with “high option value” in waiting for September projections. That means the inflation print will be decisive—steady readings at 2% would leave the ECB free to act or pause depending on broader conditions.
Elsewhere, Swiss CPI will be closely watched as the economy struggles with the burden of sweeping 39% US tariffs. The SNB has so far resisted pressure to cut below zero, with Vice Chairman Antoine Martin stressing the absence of deflation risks and the high bar for reintroducing negative rates. The data will either affirm or challenge that cautious stance.
The week also brings key updates from Canada and Australia. Canada’s weak GDP report has markets leaning toward a September BoC cut, a view that could be solidified or reversed by this week’s jobs data. In Australia, a strong Q2 GDP reading alongside last week’s upside CPI surprise should keep the RBA on hold in September, with the Board likely to wait for Q3 inflation before deciding on a potential November move.
Here are some highlights for the week:
- Monday: China RaitingDog PMI manufacturing; Swiss retail sales; Eurozone PMI manufacturing final, unemployment rates; UK PMI manufacturing final.
- Tuesday: New Zealand terms of trade; Eurozone CPI flash; Canada PMI manufacturing; US PMI manufacturing final, ISM manufacturing.
- Wednesday: Australia GDP; China RatingDog PMI services; Eurozone PMI services final, PPMI; UK PMI services final; US factory orders, Fed’s Beige Book report.
- Thursday: Australia goods trade balance; Swiss CPI, unemployment rate; UK PMI construction; Eurozone retail sales; Canada trade balance; US ADP employment, jobless claims, trade balance, PMI services final, ISM services.
- Friday: Japan labor cash earnings, household spending; Germany factory orders; UK retail sales; Swiss foreign currency reserves, SECO consumer climate; Eurozone GDP revision; Canada employment, US non-farm payrolls.
EUR/USD Daily Outlook
Daily Pivots: (S1) 1.1655; (P) 1.1682; (R1) 1.1713; More…
EUR/USD strengthens today but stays below 1.1741 resistance. Intraday bias remains neutral at this point. Overall outlook is unchanged that corrective fall from 1.1829 should have completed with three waves down to 1.1390. On the upside, above 1.1741 will bring retest of 1.1829 high first. Firm break there will resume larger up trend. However, sustained break of 1.1573 will dampen this view, and indicate that corrective pattern from 1.1829 is extending with another falling leg towards 1.1390 again.
In the bigger picture, rise from 0.9534 (2022 low) long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.
