How The Day Played Out
Thursday's session was governed by two competing forces pulling in opposite directions, and the market's unwillingness to commit in either direction was itself the message. Wednesday's July PCE data, released after London closed the previous evening, printed a 0.1 percentage point upside surprise on the headline - the PCE price index registered a year-over-year rate of 3.7%, coming in above the Dow Jones consensus - while the core measure held exactly in line with expectations at 3.3% annually. That asymmetry, a hot headline with a tame core, is the kind of print that feeds uncertainty rather than resolving it. It gave hawks something to point to and doves a reason not to capitulate.
Overlaid on that was Nvidia's earnings report, released after the New York close on Wednesday. A blockbuster outlook from Nvidia spurred a rally in technology stocks, bolstering confidence in the AI trade that has powered the bull market, with the world's most valuable company jumping 9% after saying revenue will grow about 70% next fiscal year. That result arrived into a market that had been sitting on weeks of semiconductor anxiety, and the relief was immediate and global. Asian stocks rose at the start of the Thursday session as Nvidia's earnings beat lifted tech hardware manufacturers and revived investor confidence, with MSCI's broadest Asia-Pacific index excluding Japan up 0.7%, extending gains into a third consecutive day. South Korea's central bank compounded the policy complexity of the overnight session, raising rates by 25 basis points to 3%, its highest level since January 2025, as core inflation in Asia's fourth-largest economy climbed to 2.6% in July.
The London open therefore arrived already carrying two significant inputs: a Fed-complicated inflation print and a tech sector reprieve. The session itself was quietly subdued. With Warsh speaking at Jackson Hole tomorrow morning, no serious position-taking in any direction was going to occur today. Dealers were content to hold levels rather than press them, and the intraday ranges across most instruments reflect exactly that posture.
The geopolitical backdrop took on a new dimension during the London morning. Qatar's Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani visited Tehran on Thursday in the first high-level Qatari visit since the war began, holding talks with Iran's Foreign Minister Abbas Araghchi. The discussions focused on efforts to reduce tensions and create conditions for renewed dialogue, and also covered a proposed phased plan for the Strait of Hormuz, including a temporary shipping corridor and a joint project to clear mines. This is the most substantive diplomatic engagement in weeks, and it explains the continued downward pressure on oil despite a supply picture that should be supportive. Hormuz oil flows have fallen to a three-month low, with just 5 million barrels per day transiting, against the roughly 20 million barrels per day that passed through before the war began. The market is choosing to price forward progress rather than current disruption - a fragile bet that would reverse immediately if the Tehran talks collapse.
Boston Fed President Susan Collins warned that rates must rise soon unless data show a sustained drop in still-high inflation, reinforcing that the Fed sees inflation risks as dominant over employment concerns. The statement amplified the PCE signal without adding much that was new. Markets had already moved to price approximately 40.4% odds of a September rate hike in the wake of the PCE print, up from the roughly one-in-three probability that had prevailed at the start of the week. Collins's remarks kept that pressure in place without settling the question that only Warsh can answer.
The ECB also published its July Monetary Policy Meeting Accounts during the European session. EUR/USD kept its range around 1.1650 in the European session, with hawkish ECB expectations providing support as the dollar consolidated following the PCE-driven advance. There were no surprises in the accounts and the market treated them accordingly.
The net effect of the full session was a market treading water in front of the most consequential single speech of the year for dollar-denominated instruments. The Nvidia result cleared one significant risk. The PCE data raised another. Warsh is the remaining piece.
Key Moves And Levels
Wti Crude Oil
Crude oil fell to around $81.36 on August 27, down 1.06% from the previous session. After Wednesday's PCE data printed hotter than expected, oil absorbed the inflationary read and closed barely changed - the hot print took gold lower but failed to push crude any further down. The context matters here: two sessions had already taken more than seven percent off crude since last Friday's close. Today's session was effectively a consolidation of those losses. The Qatar-Tehran diplomatic news acted as a fresh supply-risk discount, with the market front-running the possibility of restored Hormuz flows even though no agreement exists. Brent was at $87.65 and WTI at $82.90 in early London trading, with the Brent-WTI spread at $4.75, suggesting the war premium has reset but not disappeared. The $82.00 area is now the session's operative floor. The 30-day trading range for WTI futures has extended from $74.24 at the low to $87.69 at the high, meaning the instrument is currently trading toward the lower quarter of its recent range, and a diplomatic breakthrough tomorrow could push it toward the bottom of that band quickly.
XAU/USD GOLD
BREAKING - Gold opened Thursday's session on the defensive following Wednesday's hot PCE print, which directly strengthened the case for a September hike and undermined gold's position at the very top of its recent recovery.
Gold December futures opened at $4,650 per troy ounce on Thursday, down just 0.1% from Wednesday's close, and moved back up in early trading, reaching $4,648.90 by 7:59am Eastern. The metal's failure to sustain much above $4,650 through the London session reflects the tension between two valid arguments: the structural case for gold as a debasement and geopolitical hedge remains intact, but a 40% market-priced probability of a September hike is not a trivial headwind. Gold came under heavy bearish pressure and lost more than 1% on Wednesday, and after a bullish early Asian session Thursday, it turned south again and erased its daily gains, trading slightly below $4,600 by mid-morning. The $4,600 handle has become the day's fulcrum, with the market unwilling to hold above it but also finding buyers on every dip toward $4,575.
Gold prices fell to around $4,620 on Wednesday after reaching a more than three-month high of $4,696 earlier in that session, as the rally lost momentum ahead of the inflation data and ahead of Warsh's speech at Jackson Hole. That intraday reversal from above $4,696 is the most important price point on the chart heading into tomorrow. A clean close above that level on a dovish Warsh signal would confirm the resumption of the primary uptrend. A failure there on a hawkish surprise would target the $4,480 area that contained the previous briefing's advance.
XAG/USD SILVER
Silver rose to around $69.34 on August 27, up 1.82% from the previous session, recovering Wednesday's PCE-driven losses and then some. Silver climbed toward $69 an ounce on Thursday, recovering as investors continued to assess the Fed's monetary policy outlook. The hot PCE reading reinforced caution on rates, but investors are now focused on Warsh's Jackson Hole speech on Friday, which is not expected to provide clear guidance on the September decision.
Silver's recovery is running slightly ahead of gold's on a percentage basis, which is worth noting. The industrial demand narrative around AI infrastructure, solar panel manufacturing and EV supply chains remains a secondary floor beneath any monetary-policy selloff. Precious metals remained supported by the debasement trade, as investors sought protection against the risk of a US debt crisis and a weaker dollar. Silver also benefited from robust industrial demand tied to the green energy transition, photovoltaic solar panels, electric vehicles and AI data centre infrastructure. The $70.00 level, which rejected price last week, is the near-term ceiling to watch. It has capped the instrument for over two months.
USD/JPY
USD/JPY is trading around 159.27, with the session range extending from 159.12 at the low to 159.52 at the high. That is a 40-pip range for an instrument capable of moving 200 pips in a single session - the market is in a holding pattern so deliberate it almost reads as coordination. USD/JPY steadied around 159.31 on Thursday, remaining in a narrow range as investors continued to assess the Bank of Japan's outlook.
BOJ Deputy Governor Ryozo Himino said the central bank remains vigilant to inflation risks and will discuss the need for further policy tightening. BOJ Governor Kazuo Ueda will not attend the Jackson Hole symposium this week due to a scheduling conflict. The BoJ's absence from Wyoming is not a meaningful signal in itself, but it does mean the pair's direction tomorrow will be dictated entirely by Warsh rather than by any simultaneous BoJ communication. The 160.00 ceiling remains the hard boundary that neither Bessent nor the BoJ has been willing to allow a sustained break above. Below 159.00, the $4.66% 10-year yield is the level that keeps the carry trade sufficiently funded to prevent a sharper JPY rally.
GBP/JPY
GBP/JPY is trading broadly unchanged on Thursday, following a modest decline on Wednesday that snapped a four-session winning streak, quoted near 216.45. That level sits above the 215.72 Fibonacci support that the technical structure requires to remain intact for the mildly bullish weekly pattern to continue. The pair has drifted lower from the 216.45 area observed in early European trade toward the 215.10 to 215.46 range seen later in the session, with the day's range contained between 214.88 and 215.46.
The GBP side of the cross is keeping the pair anchored rather than directional. GBP/USD stayed on the back foot after losing nearly 0.4% on Wednesday and traded below 1.3600 in early Thursday trade, reflecting the pound's sensitivity to a Fed that is now pricing a higher September hike probability. Any pound strength requires either a hawkish BoE catalyst or a dovish Warsh - tomorrow provides the second of those possibilities. Tokyo CPI data due Friday is highlighted as the next potential catalyst for a break from the current consolidation in GBP/JPY.
EUR/USD
EUR/USD held steady at around 1.1650 after closing in the red on Wednesday. The pair's location is instructive: it is sitting almost exactly in the middle of the 1.1610 to 1.1710 range that has contained price since the Treasury buyback drove the initial spike higher. EUR/USD held its range around 1.1650 in the European session, with hawkish ECB expectations providing a floor as the dollar consolidated following its PCE-driven advance.
The structural EUR short thesis flagged consistently in this briefing - CFTC positioning at the 2nd percentile - remains coiled. The hot PCE headline gave the dollar its intraday bid on Wednesday, which is why EUR/USD closed lower that day. But the core PCE landing exactly in line with consensus denied the dollar the kind of clean hawkish confirmation that would accelerate the squeeze. Tomorrow's Warsh speech is the test of whether the structural thesis finally gets its catalyst or faces another round of delay.
USD/CAD
USD/CAD has drifted higher through the week, reaching 1.38105 on August 23 and 1.38455 on August 24 as the dollar found footing from the PCE print. The pair has found a quiet bid as WTI continued to soften, partially offsetting what had been a three-way alignment of forces pressing it lower. With oil now below $83 and the tariff situation having resolved - the three-day pause referenced in the previous briefing has concluded - the CAD-supportive complex that drove the pair's recent downward bias has partially unwound. The 1.3880 level that served as a key technical marker through most of this week is being reclaimed from below rather than defended.
USD/CHF
USD/CHF fell to 0.8049 on August 27, down 0.07% from the previous session. The SNB's zero interest rate policy and its preference for FX intervention over rate tools leaves the franc in a structurally awkward position: it remains a safe-haven destination for geopolitical uncertainty capital, but the SNB actively resists excessive appreciation. The SNB kept its policy rate at 0% and is expected to remain unchanged throughout 2027, reiterating its preference for foreign exchange intervention to prevent excessive franc appreciation. Most economists expect the first rate hike in early 2028, while markets are pricing one as early as March 2027. The pair is trading in the 0.8030 to 0.8070 band that the previous briefing identified as the dovish target zone - it has arrived there on geopolitical flows and the post-buyback dollar weakness, not yet on any Warsh outcome.
Morning Calls Review
The previous briefing's final major call was that tonight's FOMC minutes carried more weight than usual and that a hawkish reading would need to override the Treasury's bond market intervention simultaneously. The minutes were released after the London close on Wednesday (August 26). The minutes confirmed that "many" participants had indicated rate hikes would "likely be necessary if inflation did not decline," while officials also disagreed over how inflation would change through year-end, with "most" anticipating cooling and "many" acknowledging the possibility of more persistently elevated prices. That internal division, preserved in the minutes, was the most honest summary of where the committee stands - not a clean hawkish or dovish signal, but a genuinely split committee on a genuinely split data picture. The dollar firmed modestly on the release, which was the correct directional call given the "many" participants hawkish lean, though the magnitude was muted because the split nature of the minutes prevented a unidirectional squeeze.
The EUR/USD structural long was challenged by the PCE print on Wednesday and by the dollar's modest firming on the minutes. The pair closed Wednesday around 1.1630 to 1.1650, slightly lower than the 1.1620 to 1.1640 levels described in Wednesday's briefing, but the 1.1550 stop level was never seriously threatened. Subscribers who maintained the long through both events are still holding an instrument that is structurally pointed higher.
The WTI long from around $85 has been materially challenged by this week's oil decline. Two sessions removed more than seven percent from crude since last Friday's close, and WTI is now trading comfortably below $83. The diplomatic news out of Tehran today is the proximate explanation, but the previous briefing's caution around adding above $85.50 without a sustained close confirmation was well-placed in retrospect - those who did not add are now considerably better positioned than those who did. The question now is whether the Qatar mediation is a genuine de-escalation catalyst or a headline that the market has over-priced. Friday will likely provide clarity.
The gold call - hold stops and do not pre-exit - was correct in structure but the PCE data on Wednesday introduced a real test that gold has not yet passed cleanly. The metal is holding above $4,575 but has been unable to sustain itself above $4,650 through Thursday. The stop discipline from the previous briefing remains the right posture into tomorrow.
Positioning Into Tomorrow
Tomorrow is Warsh's first keynote address as Fed Chair, delivered at 10:00am Eastern (15:00 UK time) at the Jackson Hole Symposium. This year's event is particularly important as it is Warsh's first Jackson Hole as Fed Chair, and the combination of a genuinely divided committee, a hot-but-ambiguous PCE print, and a bond market that has been actively managed by the Treasury means his language will be parsed at a level of granularity that most Fed speeches do not attract. Warsh delivers his keynote on Friday, just three weeks before the critical September FOMC meeting, with markets pricing roughly one-in-three to forty percent odds of a September rate hike - meaning his speech is, in practical terms, the deciding communication before that meeting.
The range of outcomes is genuinely wide. A hawkish Warsh - confirming the "many" participants' hike bias and leaning into the 3.7% PCE headline - would likely push USD/JPY back toward the 160.00 ceiling, compress EUR/USD toward 1.1550, and push gold through $4,575 on the way to testing $4,480. A dovish Warsh - emphasising the split committee, the weak July payrolls figure of -23,000 jobs, and negative retail sales - would do the opposite: EUR/USD through 1.1710, USD/JPY back toward 158.50, and gold challenging the $4,696 high from Tuesday.
The initial jobless claims data printed today alongside the other events, and any material surprise in that number would have reset the Warsh expectation framework in the hours before tomorrow's speech. Watch for any revision or late commentary on that figure overnight.
For crude, the Qatar-Tehran mediation visit is the overnight risk that is harder to model than Warsh. The talks covered a proposed phased plan for the Strait of Hormuz, including a temporary shipping corridor and a joint project to clear mines, which is more substantive than anything previously on the table. If those talks yield even a preliminary framework overnight, WTI could gap lower at the Asia open toward the $79 to $80 area. If they collapse or produce no statement, the supply disruption premium reasserts. Position sizes in crude should be reduced going into the overnight session.
BOJ Governor Ueda will not be attending Jackson Hole due to a scheduling conflict, but Tokyo CPI data is due Friday and is flagged as the next potential catalyst for GBP/JPY, particularly if the print comes in above the current services producer price trajectory. Japan's services PPI rose 3.6% year-over-year in July - if Tokyo CPI confirms that services inflation is building, the BoJ tightening narrative gets a fresh data point and yen strength could complicate an already Warsh-dominated day for USD/JPY and GBP/JPY.
Silver is the instrument most likely to over-extend in either direction tomorrow. Its dual identity as both a monetary metal and an industrial commodity means it picks up every signal from both the Warsh dollar framework and any AI/tech demand reassessment flowing from the Nvidia results. The $70.00 ceiling is the target on a dollar-weakening day. A close above it would be the most significant technical event in the silver market in several weeks.
Markets Mastered - Today's Takeaway
The July PCE print gave the hawks a headline but not a mandate - core at 3.3% in line with estimates denied the dollar the clean confirmation that would have forced the EUR/USD structural long to its stop, and that distinction between headline and core is exactly the kind of granular read that separates disciplined traders from reactive ones.
Nvidia's 70% revenue growth forecast has done more than rescue the semiconductor trade - it has neutralised the correlation headwind that was pressing silver lower through last week, and tomorrow's gold and silver price action will now be determined by Warsh rather than by Jensen Huang.
The Qatar Prime Minister's visit to Tehran is the most structurally significant diplomatic development since the ceasefire unravelled, and crude oil's continued decline despite the lowest Hormuz flows in three months tells you that the market has already priced a degree of resolution that the facts do not yet support.
Tomorrow brings Warsh's Jackson Hole keynote at 15:00 UK time, Tokyo CPI before London opens, and the possibility of overnight Hormuz news - three independent variables that can each move every instrument in this briefing, and position sizing into the weekend must reflect all three simultaneously.