The dollar fell broadly versus the majors on Monday on the back of growing expectations that Fed Chair Jerome Powell would use this week's Jackson Hole symposium to signal the potential for an interest rate cut next month.

The question is how much easing he may indicate.
As investors await Powell's speech on Friday, they've made due with comments from his colleagues pointing toward Fed accommodation on the horizon.

Minneapolis Fed President Neel Kashkari was among the latest, saying it was appropriate to discuss potentially cutting U.S. interest rates in September because of the rising possibility of a weakening labor market, the Wall Street Journal reported on Monday.

A slim majority of economists polled by Reuters predicted that the Fed would cut interest rates by 25 basis points at each of the remaining three meetings of 2024, one more reduction than forecast last month.
They also said a recession is unlikely.

Goldman Sachs has lowered the odds of the U.S. slipping into a recession in the next 12 months to 20% from 25% following the latest weekly jobless claims and retail sales reports.

U.S.
workers are growing more sour with their employment compensation, according to a survey released by the New York Fed.
As of July, 56.7% of respondents said they were satisfied with their pay compared to 59.9% in July 2023.

U.S.
Secretary of State Antony Blinken on Monday said Israeli Prime Minister Benjamin Netanyahu confirmed he supports the new Gaza ceasefire proposal meant to bridge gaps between Israel and Hamas.
Blinken, speaking to reporters in Tel Aviv, said it was now incumbent on Hamas to accept the proposal.

U.S.
Treasury yields fell 1-4bp across maturities, with the 2s-10s curve flattening 2.86bp to a slightly more inverted -19.88bp.

The S&P 500 rose 0.74%, extending its winning streak to an eighth day as concerns around an impending recession abated and markets zeroed in on Powell's speech at Jackson Hole.

WTI tumbled 2.67% on the prospect that successful Middle East peace talks could reduce supply risks, while leading oil importer China's economic weakness looked set to curb demand.

Copper rallied 1.09%, scaling 2-1/2 week peaks, with buying spurred by signs of improving demand in top consumer China and also helped by the sliding dollar.

Gold eased 0.12% after piercing the $2,500 ceiling in the previous session, as investors booked profits from the record run.

Heading toward the close: EUR/USD +0.5%, USD/JPY -0.70%, GBP/USD +0.39%, AUD/USD +0.89%, USD/CHF -0.41%, EUR/JPY -0.18%, GBP/JPY -0.31%, AUD/JPY +0.25%.

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