The dollar index (DXY00) today is up by +0.15%.  The dollar has carryover support on concern that last week's CPI and PPI reports showed an acceleration of prices that could keep the Fed from cutting interest rates at next month's FOMC meeting.  The dollar fell back from its best level after today's news showed the Aug NAHB housing market index unexpectedly declined.

The US Aug NAHB housing market index unexpectedly fell -1 to 32, weaker than expectations of an increase to 34.

Gains in the dollar are limited due to underlying foreign investor concern about the possibility of a politically-driven US monetary policy, following US Treasury Secretary Bessent's appearance last Wednesday, which seemed to give the Fed marching orders on how much to cut interest rates.

The markets are awaiting the outcome of today's meeting between President Trump and European leaders on any progress toward ending the Russian-Ukrainian war.  The outcome could have macroeconomic implications regarding tariffs and oil prices, and could, of course, have significant consequences for European security.

The markets continue to adjust to the inflation outlook following Thursday's hawkish PPI report. Following the report, the markets erased any hopes of a -50 bp rate cut at the Fed's September meeting and pulled back expectations for a -25 bp rate cut to 84% area from 93% before the report.

Federal funds futures prices are discounting the chances for a -25 bp rate cut at 84% at the September 16-17 FOMC meeting and at 55% for a second -25 bp rate cut at the following meeting on October 28-29.

EUR/USD (^EURUSD) today is down by -0.23% on dollar strength. Doubts that the Russian-Ukrainian war will end anytime soon are weighing on the euro, following the lack of a breakthrough to end the war after last Friday's Trump-Putin summit.

Swaps are pricing in a 5% chance of a -25 bp rate cut by the ECB at the September 11 policy meeting.

USD/JPY (^USDJPY) today is up by +0.39% due to strength in the dollar.  The yen also continues to be undercut by concern that US tariff policies will harm the Japanese economy.  Losses in the yen are limited after the Japanese Jun tertiary index rose more than expected, a positive factor for the yen.

The Japan Jun tertiary index rose +0.5% m/m, stronger than expectations of +0.2% m/m.

December gold (GCZ25) today is down -2.00 (-0.06%), and September silver (SIU25) is up +0.105 (+0.28%).  Precious metal prices today are mixed, with gold prices falling to a 2-week low.   Strength in the dollar is bearish for metals.  Gold prices are also under pressure due to reduced chances for a Fed rate cut at next month's FOMC meeting, following a bearish July PPI report last Thursday that knocked the chance of a Fed rate cut down to 84% from 93% before the report.

Precious metals have seen support due to increased safe-haven demand following the lack of progress in last Friday's summit between Presidents Trump and Putin aimed at ending the Russian-Ukrainian war.  Silver saw some support after strength in Chinese stocks bolstered hopes of stronger Chinese industrial metals demand after the Shanghai Composite rallied to a 10-year high today. 

Gold continues to have safe-haven support related to US tariffs and geopolitical risks, including the conflicts in Ukraine and the Middle East.  Fund buying of precious metals continues to support prices after gold holdings in ETFs rose to a 2-year high last Friday, and silver holdings in ETFs reached a 3-year high last Thursday.