Daily Market Outlook - Thursday, August 27

US equity futures rallied on Thursday as Nvidia’s blockbuster sales forecast re-energized investor confidence in the artificial intelligence trade, overshadowing persistent rate-hike concerns in fixed income. Nasdaq 100 contracts jumped 0.9% alongside a 4.7% surge in Nvidia shares during extended trading after the chipmaker projected ~70% revenue growth for fiscal 2028—handily beating Wall Street’s 45% estimate. The buoyant outlook spilled into broader tech names like Marvell and Sandisk, lifting European equity futures and triggering a 1.3% gain in South Korea’s Kospi.

However, bond markets faced renewed selling pressure as sticky inflation prints prompted traders to price in further monetary tightening. Two-year US Treasury yields rose to 4.22%, with money markets now fully pricing in a Federal Reserve rate hike by December. Global yields followed suit: sovereign bonds across Australia, New Zealand, and Japan retreated as central bank expectations shifted hawkishly, while the South Korean won strengthened following a second consecutive rate increase by the Bank of Korea.

In commodities and FX, Gold climbed 0.6% toward $4,620/oz as a hedge against stubborn inflation, while Brent crude stabilized near $87.40/bbl. The energy backdrop remains a double-edged sword: while crude has retreated from recent peaks, underlying inflation metrics continue to keep central banks on high alert, capping broader duration gains in fixed income.

Economic data out of the US presented a complex narrative for risk assets. Second-quarter GDP was unrevised at 1.5% q/q annualized, but nominal output and PCE headline inflation were both revised higher, reflecting a clearer pass-through of energy costs. Real personal spending rose 3.4% annualized, driven almost entirely by healthcare expenditure—which accounted for nearly 40% of total PCE growth—while goods spending was deflated by higher prices. At the same time, US corporate pre-tax profits surged to an all-time record of 14.9% of GDP, underscoring a stark divide between booming corporate margins and financially strained households.

July’s monthly PCE report delivered a mild hawkish tilt, with headline PCE up 0.2% m/m (3.7% y/y) and core PCE rising 0.246% m/m (3.3% y/y). While these prints remain above the Fed's target, they do not force an immediate policy shift. On the consumer side, income growth picked up 0.4% m/m, offering a modest buffer for a depleted personal savings rate. However, spending increases remained concentrated in non-discretionary sectors—healthcare, utilities, and financial asset-management fees—reinforcing the view that real consumer demand is far more fragile than headline growth figures imply.

Macro to Micro: Nvidia’s bullish multi-year guidance has successfully restored a floor under equity risk sentiment, but the broader macro environment remains tightly constrained by duration dynamics. Strong corporate profit margins are insulating equity valuations for now, but persistent service-sector inflation and rising short-end yields mean the Fed has little scope to ease. For traders, the near-term focus centers on whether tech earnings momentum can continue to decouple from elevated borrowing costs.

Overnight Headlines

BoJ Deputy Governor Himino Calls For ‘Timely’ Rate Hike
Bank Of Korea Delivers Back-To-Back Rate Increase To 3.00%
Economists See RBA Rate Hike As Early As September After Hot CPI
Australia Household Spending Surges Past Estimates In July
China Industrial Profit Growth Slows To 11.2%, Weakest Pace This Year
US Allies Warn Hormuz Is Still Mined Despite Trump Claim
Qatar PM To Visit Tehran To Pursue Iran Mediation Efforts
CIA Chief’s Moscow Trip Was To Warn Kremlin Not To Attack NATO
EU States Revive Plan To Use Frozen Russian Assets For Ukraine
US Says Chinese Hackers Breached DoJ, NASA, Fed And Senate
France Replaces Italy As European Bond Investors’ Biggest Concern
Dollar Near Eight-Day High As US Data Lifts Fed Hike Bets
Nvidia Forecasts 70% Sales Growth, More Years Of AI Spending Boom
Nvidia Agrees To Buy Hugging Face For $12.9B
Amazon To Buy 2M Nvidia Chips For Data Centre Build-Out
HP Falls On Investor Concerns About PC Demand Trends
Salesforce Revenue Rise, Expands Partnership With Anthropic
CrowdStrike Beats Annual Revenue Forecasts As AI Threats Rise

FX Options Expiries For 10am New York Cut

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

Thursday 27/08
EUR/USD: 1.1530 (€1.9bn), 1.1535 (€552m), 1.1550 (€1.4bn), 1.1600 (€2.3bn), 1.1630 (€527m), 1.1645 (€1.1bn), 1.1650 (€764m), 1.1695 (€1.4bn), 1.1700 (€1.0bn)
USD/JPY: 158.00 ($730m), 158.18 ($799m), 158.90 ($619m), 160.00 ($524m)
GBP/USD: 1.3550 (£841m)
AUD/USD: 0.7100 (A$1.3bn)
Friday 28/08
EUR/USD: 1.1575 (€528m), 1.1600 (€812m), 1.1625 (€765m), 1.1650 (€767m), 1.1680 (€759m), 1.1725 (€840m)
USD/JPY: 158.20 ($1.1bn), 161.00 ($665m)
GBP/USD: 1.3700 (£832m)
USD/CHF: 0.8000 ($1.5bn)

CFTC Positions as of 21/7/26

Equity fund speculators increase S&P 500 CME net short position by 5,978 contracts to 267,509
Equity fund managers raise S&P 500 CME net long position by 10,361 contracts to 952,422
Speculators increase CBOT US 5-year Treasury futures net short position by 33,349 contracts to 1,274,105
Speculators increase CBOT US 10-year Treasury futures net short position by 31,908 contracts to 946,961
Speculators trim CBOT US 2-year Treasury futures net short position by 93,706 contracts to 927,337
Speculators increase CBOT US UltraBond Treasury futures net short position by 19,941 contracts to 346,724
Speculators increase CBOT US Treasury bonds futures net short position by 39,405 contracts to 219,012
Bitcoin net long position is 2,736 contracts
Swiss franc posts net short position of -27,278 contracts
British pound net short position is -54,573 contracts
Euro net short position is -59,088 contracts
Japanese yen net short position is -52,893 contracts