The past two days did a commendable job of showcasing just how resilient the US economy is proving to be. On Wednesday, the latest PCE price index made it clear that inflation was not as troublesome as analysts had previously assumed, as the published figures fell below estimates across the board. Moreover, the Bureau of Economic Analysis also revised prior periods significantly to the downside, shaving 30-bps off the July estimate and lowering the Q1 headline figure from 4.4% to 3.9%. Adding fuel to the fire, huge revisions to US GDP data were released on the same day, bumping Q1 growth estimates from 2.1% to 2.5% and promoting Q2 figures from 1.5% to 2.2% annualised. The double whammy of lower inflation and higher growth would have been surprising enough on its own, but the good news did not stop there. Yesterday, the latest jobless claims revealed a surprise drop to 197 thousand, fewer than the previous week and beating forecasts of 200k, while continuing jobless claims fell to 1.701 million – the lowest level since April 2023. All the above to say that the US economy is running hot. The continued strength means that the Federal Reserve will almost certainly raise interest rates on the dollar over the coming months and well into 2027. While any action remains unlikely in October, the subsequent FOMC meeting on the 9th of December is now heavily leaning towards at least a 25-bps hike. Further out, the implied odds for the end of 2027 are eyeing rates of up to 4.75-5.00% compared to 3.75% today. The shift in expectations has provoked the dollar into a full-on rampage, pushing the DXY over 102 points to its highest level in the last 18 months. The surge in the greenback relentlessly punished the euro yesterday, which fell the better part of 0.8% against the dollar to a daily close of $1.124. The pound fared little better, crumbling 0.5% to $1.32. The yen was unable to mount much of a defence either, falling to 158 per USD. US Treasuries experienced a rapid sell-off on Thursday, spiking yields on the 10-year note to 5.34%, although sellers eventually tired themselves out and yields fell back to 5.24% by the end of the day. For all the drama unfolding so far this week, the story is far from over. Non-farm payrolls are just around the corner, and if the ADP employment change and jobless claims are anything to go by, markets could be in for another shock. Forecasts currently stand at 90k new jobs in September, with U-3 and U-6 unemployment rates of 4.1% and 7.7% respectively. Another potential firework display in the making. #USD #DXY #NFP About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.
On Wednesday, the US Bureau of Economic Analysis released the latest PCE price index, surprising financial markets with lower-than-expected inflation figures for the month of August. The headline inflation figure came in at 0.3% month-over-month, punching lower than forecasts of 0.4%, while the core element of the index, which excludes volatile components such as energy and food, came in at 0.2%, also beating expectation of 0.3%. Year-over-year, headline inflation remained steady at 3.4%, as did the core constituent at 3.0%, with both figures falling short of predictions of 3.7% and 3.3% respectively. Alongside the August inflation stats, the Bureau also published revisions for the prior month, as well as for the first quarter of the year. Annual figures for July, both headline and core, were revised to the downside by 30 basis points, Q1 headline PCE was revised from 4.4% to 3.9%, while the core PCE figure was nudged down from 4.6% to 4.2%. Taken together, the latest publication from the BEA significantly changes the outlook for future interest rate adjustments on the dollar. CME’s Fedwatch tool immediately reflected the shift, pulling the implied probability of an October rate hike down to just 37%. Despite this, a December 25-bps bump remains stubbornly on the cards. Part of the reason for the firm drop in prior inflation estimates is because the BEA recently changed its methodology for calculating certain components of the index, namely computer software, legal fees and investment advice. The computer software element of the calculation has been the source of some controversy over the last couple of years. Economists on Wall Street and at the Fed had both pointed out that because of the way such components were defined, the old formula significantly over-counted software inflation, making the overall picture look worse than it actually was. The previous calculation factored in hardware costs, which have gone through the roof in recent times due to the explosion in the artificial intelligence sector, while the new calculation focuses more narrowly on digital services. Essentially, the BEA realised that counting semiconductor shortages as software price hikes was not an adequate reflection of reality. Beyond the latest inflation reading, the Bureau also published its third and final estimate on second quarter GDP growth. The previous figure of 1.5% was bumped up to 2.2% annualised, while first quarter growth was revised up to 2.5% from the 2.1% reported on previously. Consumer spending and private business investment were the main drivers behind the revision. Consumer spending, which accounts for over two-thirds of all US economic activity, increased at 3.8% annually, while business investment climbed to a massive 9% as a result of the billions of dollars being poured into AI expenditures. The major factor dragging down GDP in the United States is in fact the huge growth in imports, which is also in large part because of the AI boom. Businesses have spent super aggressively this year on AI infrastructure, resulting in the US as a whole sucking in a massive wave of foreign goods, particularly computer chips and technology components, all of which have become notoriously expensive. The underlying strength of the US economy is in fact somewhat hidden by the 2.2% figure; without the massive surge in imports the final GDP result would be notably higher. About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.
The latest drop in the euro has dragged the common currency down to a 16-month low against the US dollar. Tuesday saw the euro drop to just $1.131 before recovering some of the losses, but the pair remains in a desperately unenviable position. Falling consumer confidence, low employment expectations and stagnant growth are all contributing to the pessimistic outlook for the European continent. To make matters worse, inflation is on the rise in Europe just as it is throughout the rest of the world. The European Central Bank would typically raise interest rates to combat such pressures, but unfortunately for the ECB, growth in the Eurozone has been anaemic this year, with baseline projections aiming for a measly 0.9% GDP gain in 2026. The central bank is in a tight spot; raise rates and risk destroying what little growth remains, or do nothing and watch inflation outpace growth anyway, rolling out the red carpet for stagflation. Markets have recognised the problem, and whether the ECB implements another token rate hike or not, interest rates on the euro will not be able to keep pace with those on the dollar, or the pound for that matter. Weakness in the euro temporarily pushed the DXY up to 101.6 points yesterday, a 2-month high for the index. For all the talk of relative strength between currencies, no one is in any position to gloat at the moment, with bond markets around the world experiencing a historic, coordinated meltdown. Yields on the 10-year US Treasury note pushed to 5.24% yesterday, the highest level since 2007. In the UK, 10-year gilt yields spiked to 5.40%, another level not seen since 2007. Japanese 10-year bonds are seeing yields last observed in the late 1990s. The same story is playing out playing out across Europe. A slew of US economic data is scheduled to hit financial markets later today, most prominent of all the latest PCE price index. Any large, unexpected change in inflation could rapidly impact bond yields and interest rate expectations down the line. Turning to one of the more exotic currency pairs, the Iranian rial crashed to a record low of 2.5 million to a single US dollar yesterday on the open market. The figure is far removed from the increasingly meaningless interbank rate of 1.7 million, which is functionally useless in light of the austere economic sanctions imposed on the Iranian regime. Such measures have now triggered a full-on economic collapse within the isolated country, as day-to-day conditions continue to deteriorate. Inflation stands at over 80% and has done since May, with food prices appreciating much faster still. Peace talks have achieved absolutely nothing in recent weeks, and any form of reconciliation appears further away than ever. Brent Crude fell marginally to $103 per barrel on Tuesday, in stark contrast to American WTI contracts, which edged down to just $89. The spread between the two benchmarks has widened considerably following remarks from President Trump that the White House is considering a diesel export ban, forcing oil traders to ruminate on the prospect of a wider export ban, which would further trap petroleum supplies within US borders. #EURO #USD #PCE About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.
COMPARTIR You spot a channel on the chart that keeps narrowing. Price is still making lower highs and lower lows, so the trend looks bearish, yet the moves are getting smaller. By the time it finally breaks out you have already talked yourself out of the trade, or you take it and a single candle wicks back through your stop. This guide fixes the three points where falling wedge trades usually go wrong. You will get four identification criteria that either all hold or the pattern does not count, a target calculation worked through in pips rather than left as a formula, a straight answer on whether volume means anything on a forex chart, and a rule for what to do when the breakout fails. A falling wedge is a bullish pattern made of two downward-sloping trendlines that converge, with the lower line falling more slowly than the upper one. That shrinking gap shows selling pressure fading. The pattern is confirmed when price closes above the upper line, and the usual target is the height of the wedge projected up from the breakout point. Want to test these four criteria on live charts before you risk anything? Set the platform up and mark up a few wedges under real market conditions first. A falling wedge is a contraction pattern in which price drifts lower between two converging, downward-sloping trendlines. Both the highs and the lows are falling, but the lows are falling more slowly, so the two boundaries squeeze together as the pattern matures. That geometry describes a market where sellers are still in control on the surface and losing ground underneath it. The reading is straightforward. Each new leg down covers less distance than the one before, which means supply is being absorbed at progressively similar levels rather than driving price away. When buyers finally take the upper boundary with a close, the balance has changed and the pattern resolves upward. The wedge builds one swing at a time. A rally is sold, but slightly higher than the last one was. The following decline stops slightly above where the previous decline stopped. Repeat that three or four times and you have two lines closing on each other. Because it needs several completed swings, a falling wedge takes time. Three or four candles drifting lower is a pullback. A wedge worth trading normally spans dozens of candles on whichever timeframe you are using. The falling wedge is a bullish pattern in both of its common forms, whether it ends a downtrend or interrupts an uptrend. The downward slope misleads people into reading it as bearish continuation. Bullish is a tendency, not a guarantee. What settles the direction is whether price produces a close beyond the upper boundary. Until that happens the wedge is an unresolved contraction, and it can just as easily break down. The shape alone tells you very little. What came before the wedge decides how you read it, and most guides only cover the first two of the three cases below. This is the textbook case. A long decline runs out of momentum, the swings contract, and the break of the upper boundary marks the point where the downtrend stops working. The prior downtrend has to be substantial for this reading to apply. A wedge that forms after a two-week slide inside a broader range is not reversing anything. Here the target is the full wedge height projected from the breakout. When the wedge appears as a pullback inside an established uptrend, it is a pause rather than a turn. This version tends to resolve more reliably, because the dominant trend is already working in your favour. The move that follows is usually smaller, so size the target from the length of the previous impulse leg rather than from the wedge height. The common error is reading the contraction as the end of the uptrend and closing a good position into it. The third case looks identical on the chart. A downtrend produces a counter-trend bounce that contracts into a wedge, and the breakout runs straight into supply that has not been cleared. The check is simple: look at what sits above the wedge. If there is an obvious prior swing high, an untested supply zone or a moving average that has been capping every rally, the bullish reading is the wrong one. Stand aside rather than paying to find out. Three patterns drift lower on a chart and two of them are frequently mistaken for the wedge. Getting the identification wrong means taking the trade in the wrong direction, so it is worth thirty seconds of checking. The descending triangle is the dangerous one. It also converges, but its lower boundary is horizontal, which means buyers are defending one specific price while sellers keep lowering their offers. That structure usually resolves downward, the opposite of the wedge. The bull flag is easier to separate once you look at the two lines together. A flag runs in a parallel channel, so the distance between the boundaries stays roughly constant instead of shrinking. Both patterns lean bullish, so the cost of confusing them is smaller. Read more: Bull flag pattern, a practical guide for forex traders. Four criteria, and all four have to hold. Drop any one of them and what you are looking at is a decline, not a pattern with an edge. Draw the upper boundary across the swing highs and the lower boundary across the swing lows. Both must slope downward, and each needs at least two touches before the line means anything. A line resting on a single point is not a trendline. It is a guess with a ruler through it, and it will happily support whatever conclusion you already wanted. The lower boundary has to fall more slowly than the upper one. That difference in slope is what makes the lines converge and what tells you selling pressure is easing. If the two lines run close to parallel, you have a descending channel. Channels are traded from edge to edge rather than on a breakout, so the distinction changes the whole approach. A workable wedge normally spans somewhere between 15 and 50 candles. Fewer than that and the swings have not had room to contract, so you are reading noise as structure. Convergence that happens too quickly is its own warning. If the lines meet within a handful of candles, the pattern usually resolves as a sharp continuation rather than a clean breakout. On a daily chart, expect several weeks for a wedge to complete; on a four-hour chart, several days. While the wedge is forming, activity should taper as the range narrows, then pick up on the candle that breaks out. That is the classic description. It is also where forex charts stop matching the textbook, which is the subject of the next section. MT4 and MT5 display tick volume, which counts how many times the price quote updated during a candle. It does not count contracts or currency units traded. Forex is decentralised, so there is no central exchange tallying size, and two brokers can show different tick volume for the same candle depending on how often their feed updates. Tick volume is still useful as a proxy. It tracks relative participation and activity, so a breakout candle showing a clear jump against the surrounding candles tells you more traders were active. What it cannot tell you is how much money moved, which is exactly what the stock market version of the rule depends on. Session overlap distorts the reading further. The hours when London and New York are both open carry far more quote updates than the Asian session, so a breakout at 14:00 London time will show higher tick volume than an identical breakout at 03:00 regardless of conviction. Compare a candle with candles from the same session, never across sessions. The practical rule: treat rising tick volume on the breakout as a bonus, not a requirement. A close beyond the boundary is the first-order confirmation, and a breakout on ordinary tick volume is still a valid breakout. Most wedge tutorials apply an equities rule such as "1.5 times the 20-day average volume" directly to currency pairs. That threshold has no meaning on a market with no consolidated volume figure. The number of price updates recorded during a given period on a forex platform, used as a substitute for traded volume because decentralised markets do not publish a consolidated figure. Two entries are available and they trade risk against participation. Taking the breakout puts you in for the whole move and exposes you to failed breaks; waiting for the retest cuts the risk and sometimes leaves you behind. Enter when a candle closes above the upper boundary. On a daily chart that means the daily close, on a four-hour chart the four-hour close, and the distinction matters because price spends plenty of time above a line without ever closing there. An intraday poke through the boundary is not a breakout. It is the single most common reason a wedge trade is entered and stopped out in the same session. Once price has broken out, it often returns to the old upper boundary and holds above it. Entering on that hold gives you a tighter stop and a cleaner invalidation level. The retest does not always come. If price runs away from the boundary, let it go rather than chasing it, because a chased entry carries the same target with a much worse stop distance. Put the stop below the last swing low inside the wedge, with a small buffer for normal volatility. That level is where the premise fails, so it is the level worth paying for. Placing the stop below the entire pattern feels safer and usually is not. On a wedge spanning several weeks, the distance from entry to the pattern low can be large enough to push the reward-to-risk ratio below anything worth trading. One more cost to plan for: spreads widen around breakouts on thinner pairs and at session boundaries. A stop set tight against the swing low can be taken out by the spread alone while the chart price never reaches it. The standard method is a measured move. Take the vertical height of the wedge at its widest point, convert it to pips, and project that distance up from the breakout price. Worked through on an illustrative GBP/USD daily wedge, with the figures kept internally consistent so the arithmetic can be followed: Wedge height at its widest: 1.2905 minus 1.2725 = 180 pips Breakout close: 1.2790 Last swing low inside the wedge: 1.2735, stop placed 10 pips below at 1.2725 Risk: 1.2790 minus 1.2725 = 65 pips Target: 1.2790 plus 180 = 1.2970 Reward: 180 pips. Reward-to-risk: 180 divided by 65 = 2.77 to 1 The projected height is a minimum objective rather than a promise. Plenty of wedges stall part of the way there, which is why taking something off at the halfway mark is a reasonable habit. Two exits are worth setting in advance alongside the stop. The first is a time stop: if the breakout has not made progress within a sensible number of candles, roughly the time the wedge itself took to form, the move has failed to attract follow-through and the position no longer has a reason to exist. The second is thesis invalidation: if price closes back inside the wedge, the target is void immediately. Waiting for the stop to be hit turns a small loss into the full one. The same illustrative GBP/USD setup, run end to end, then run again with the opposite outcome. The figures are self-consistent worked numbers for following the method, not a record of a specific historical trade. Identifying the pattern. Price falls from 1.3180 and spends roughly nine weeks contracting, printing four lower highs along 1.2905 down to 1.2820 and four lower lows from 1.2725 up to 1.2745. The upper line has four touches, the lower line four, and the two converge because the lows are rising relative to the falling highs. The pattern spans 44 daily candles, comfortably inside the workable range. Entry. The daily candle closes at 1.2790, above the upper boundary at 1.2775. It is the close that qualifies the trade; price had poked above the line twice before without closing there, and both of those attempts failed. Risk. Stop at 1.2725, 10 pips below the last swing low inside the pattern. That is 65 pips of risk. On a 0.5 lot position each pip is worth about £3.90, so the risk is roughly £254. On a £20,000 account that is close to 1.3 per cent. Position size is the binding constraint here rather than leverage: FCA rules cap retail leverage on major pairs at 30:1, so a 0.5 lot GBP/USD position requires around £2,130 of margin, which the account covers comfortably. Target and result. Wedge height 180 pips, projected from 1.2790, gives 1.2970. Price reaches 1.2952 eleven candles after the breakout and stalls under the round number, so the position is closed there. That is 162 pips, about £632, a reward-to-risk of 2.49 to 1 against the 2.77 planned. The failure branch. Take the same wedge and the same entry at 1.2790. Three candles later price closes back inside the pattern at 1.2758. The thesis rule fires before the stop does: a close back inside the wedge voids the target, so the position is closed at the next open around 1.2750, a loss of 40 pips instead of the full 65. Re-entry is only considered if price produces another close above the boundary, and only if the wedge structure is still intact. A second failed break on the same pattern is a reason to leave the chart alone, not to average down. The same pattern produced both outcomes. What differed was not the setup but the rules set before the entry, and those rules decided which outcome was expensive. Start with what can be said honestly: there is no reliability figure for the falling wedge that transfers cleanly to forex. The reason is structural. Both boundaries are drawn by hand, and two competent traders looking at the same stretch of price will not draw the same wedge. One includes a swing the other treats as noise, and the pattern's start date, height and breakout level all shift with it. When the sample definition moves, hit rates calculated from different samples cannot be compared. Success rates circulating on trading sites make this worse by quoting precise percentages with no sample, market or period attached. Figures in the sixties and seventies appear regularly without a single citation behind them. Where a genuine pattern study exists, name the author and the method, and say plainly that its sample is almost certainly equities and that applying it to currency pairs requires a discount. False breakouts deserve more attention than the win rate does, because they are where the money goes. The early warning signs are consistent: a breakout candle with a long upper wick and a close barely above the line, a break that occurs in a thin session, or a break straight into a prior swing high. The handling rule is the thesis-invalidation rule from the previous section. A close back inside the wedge ends the trade, and a second failure on the same pattern ends your interest in it. Not always in practice, even though the pattern's bias is bullish. The trend that came before it decides whether it is a reversal, a continuation or a counter-trend bounce that fails at overhead supply, and only the third case regularly catches traders out. Check what sits above the wedge before treating the bias as the answer. Measure the widest part of the wedge, convert it to pips, and project that distance from the breakout price. On a 180 pip wedge breaking out at 1.2790, the target is 1.2970. Treat the projection as a minimum objective and take partial profit around halfway rather than assuming the full move. There is no dependable figure, and the percentages quoted around the web generally carry no sample, market or period. The pattern's boundaries are drawn by hand, so different traders identify different wedges and their hit rates are not comparable. Judge a specific setup on its criteria and its context rather than on a published win rate. Both converge, but the descending triangle has a flat lower boundary while both of the wedge's boundaries slope down. That flat floor marks buyers defending one price against sellers who keep lowering their offers, which usually resolves downward. The two patterns therefore point in opposite directions. Only as a proxy. Platforms show tick volume, the count of price updates, rather than traded size, and the figure varies between brokers and inflates during the London and New York overlap. Use it as supporting evidence for a breakout and rely on the close beyond the boundary as the actual confirmation. Daily and four-hour charts are the practical floor. Below one hour the swings that form the boundaries are short enough that ordinary spread and session noise creates wedge shapes that do not reflect any real shift in pressure. The pattern needs roughly 15 to 50 candles to be meaningful, and lower timeframes reach that count too quickly to mean much. The method has four parts. Confirm all four identification criteria before calling it a wedge, read the prior trend to decide which of the three setups you are in, size the target by converting the wedge height to pips and projecting it from the breakout, and treat tick volume as supporting evidence rather than proof. Three judgements are worth carrying away. A flat lower boundary means you are looking at a descending triangle and the direction flips. The stop belongs below the last swing low inside the pattern, because that is where the premise fails rather than where the drawing ends. And a close back inside the wedge ends the trade immediately, without waiting for the stop. The honest position on reliability is that nobody can give you a trustworthy number for this pattern, and the sites that quote one are not measuring what they claim. That is an argument for rules you set in advance, since those are the part of the outcome you actually control. Open a chart, find three historical falling wedges, and run each one through the four criteria. Counting how many survive is a faster education than any win rate. The RADEX MARKETS editorial team consists of seasoned financial professionals and market observers. Dedicated to delivering objective market summaries, macroeconomic insights, and educational content, the team strives to keep traders well-informed in a fast-paced financial environment. Reviewed by RADEX MARKETS Risk Warning Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.
On Monday, SpaceX (SPCX) successfully launched its Starship spacecraft into low Earth orbit, using the system to deploy 26 next-generation Starlink V3 satellites. The latest flight established two novel achievements for SpaceX. While Starship has experienced many successful launches in the past, this is the first time the spacecraft has executed an orbital insertion burn, pushing it to a stable altitude of 275 km. All previous test flights intentionally followed sub-orbital trajectories designed to bring the spacecraft straight back down to Earth. It is also the first time the system has carried real cargo into space – all previous flights transported only test items – meaning that Starship is now a fully-fledged orbital launch vehicle. The original mission was to circle the planet six times as part of a 10-hour flight, but after Starship lost one of its six raptor engines, flight control decided to cut the journey short, reducing the trip to just three hours and two orbits. The re-entry manoeuvre was equally fruitful, protecting the integrity of the craft during the de-orbiting process, before splashing down on target in the North Pacific Ocean. With yesterday’s operation successfully completed, the next goal for SpaceX will be to recover the Starship as it re-enters the atmosphere, snatching it in an upright position as it makes its way back to Starbase in Texas. This manoeuvre has already been carried out on the booster component of the rocket, but up until now the upper stage Starship has not been recovered in such a manner. SpaceX still has a long way to go before achieving its ultimate goal of ferrying humans to mars, but this week’s flight is undoubtedly a big step toward that end. The colossal size of the new Starship spacecraft allows it to deliver far greater payloads than its predecessors, the Falcon 9 and the Falcon Heavy. While the Falcon 9 had a maximum payload of 23 tonnes, and the Falcon Heavy 64 tonnes, Starship can handle over 100 tonnes of cargo per launch. At 124 m tall, Starship dwarves everything that came before it, even surpassing the monstrous Saturn V rockets used in the Apollo missions back in the late 1960s and early 1970s. Even more remarkably, the latest propulsion system generates twice the amount of thrust on liftoff and is completely reusable. Current estimates for cost per launch sit at around $100 million, but this figure is expected to fall drastically as each component becomes increasingly reusable When it comes to the economics of getting cargo into orbit, the only figure that matters is the price per kilogram. Historically, this figure has been astronomically high. Massive investment costs and largely expendable hardware pushed expenses through the roof, making launches so prohibitively expensive that they remained exclusively in the hands of major global governments. From the early 1960s onwards, costs typically remained around $50,000 per kg. This figure would remain constant until the mid-2010s, after which SpaceX and the Falcon 9 rocket single-handedly changed the game forever. The reusable nature of the Falcon 9 brought costs down to around $3,000 per kg. The Falcon Heavy reduced them even further, to under $2,000 per kg in the present day. As it turns out, there is a great deal of demand for cheap space freight, and SpaceX has been all too happy to accommodate the surge in growth. The company orchestrated a total of 165 Falcon flights last year, accounting for more than half of all launches globally. It costs a lot of money to build a new rocket. By reusing existing hardware, these costs come down dramatically. One particular first-stage Falcon booster has completed no fewer than 37 separate launches and is still in service today. SpaceX aims to make this the norm. Orbital freight costs are far lower than they have ever been, and yet Starship aims to slash them further still, eventually reducing the price tag to just $100-200 per kg. Despite the technological leap, financial markets were not impressed, dragging SPCX shares 2% lower by the daily close.
It turned out to be a mixed bag for US stocks last week, as big tech companies stole all the hype, leaving the broader stock market fighting for what little attention remained. The Nasdaq 100 pushed to new record highs on Tuesday, before finishing the week 3.3% higher. In contrast, the Dow Jones index barely moved, edging to a mere 0.3% gain by the Friday close. The discrepancy is beginning to worry a number of investors, who are now coming to terms with just how few companies are actually responsible for the momentum in US stock markets. Artificial intelligence continues to be the dominant trend, as proven by the recent announcement from Meta Platforms (META) related to its new Muse AI agent. Shares in the company rose 13% last week, while a number of stocks tied to the semiconductor sector saw similar rallies. Advanced Micro Devices (AMD), Arm Holdings (ARM) and Intel (INTC) likewise all closed the week around 13% higher, as markets collectively concluded that demand for chips is not going away any time soon. Much of the rest of the stock market remains forgotten in the dust. The US dollar stayed on the front foot last week, pushing the DXY 0.8% higher to reclaim 101 points. The Fed’s newfound hawkishness has taken markets by surprise and currencies have yet to completely adjust to the new paradigm. Resilient US economic data has left the central bank with no excuse to lower interest rates, and in fact the implied odds of a second consecutive rate hike on the dollar now stand at over 60%. This stands in direct opposition to the Bank of Japan’s much weaker stance regarding the yen, which fell against the greenback yet again last week. Despite joint interventions and promises to combat a weakening yen, the results so far have been unconvincing, as evidenced by the pair’s climb to 159 last Thursday. With that said, following a bout of political commentary between Washington and Tokyo late last week, another joint intervention may well be on the cards. Japanese Finance Minister Satsuki Katayama claimed that President Trump had directly expressed concern on the weakness of the yen, while a subsequent call between Katayama and Treasury Secretary Scott Bessent resulted in a bilateral pledge to strengthen cooperation on the matter. Given the size of previous interventions, currency traders were happy to pre-emptively buy the yen on Friday, lifting the yen a full percentage point against the greenback. The economic calendar finally has something to say for itself this week, with a slew of hard data lined up for release. The first is an interest rate decision from the Reserve Bank of Australia, which is forecast to raise rates on the Australian dollar to a 15-year high of 4.6%. Australia continues to suffer severe inflationary problems and if implemented, the adjustment would mark the fourth rate hike of the year. Later in the day, the August JOLT survey will offer the first glimpse into the US labour market this week, although not the last. The September ADP employment change follows on Wednesday, as does the all-important PCE price index and the final estimate of US second-quarter GDP growth. The ISM manufacturing index is the main event on Thursday, before non-farm payrolls hit the newswires on Friday. On the earnings calendar, Micron (MU) is the one to look out for, scheduled to deliver their latest financials after the bell on Wednesday. On the geopolitical front, very little has emerged out of the Trump-Xi summit, with the exception of a modest two-month extension to the trade truce, buying both parties more time to negotiate a more permanent arrangement. Almost nothing to report from Iran either, following the US’ rejection of a cease-fire proposal that would have reopened the Strait of Hormuz, although the White House expects talks to resume this week. Brent Crude is back under $100 per barrel as of this morning. #IRAN #USD #JPY
