Dollar Firms, Yields Tick Up as Yen Extends Slide to 159

The US Dollar Index firmed to 99.6590, up 0.21% on the session. The move came alongside a modest but broad-based rise in Treasury yields — the 5-year led with a 4.5bp gain to 4.407%, the 10-year rose 4.0bp to 4.700%, and the 30-year added 3.2bp to 5.243% — while equities were largely directionless: the S&P 500 slipped 0.03% and the Dow eased 0.22%, even as the Nasdaq gained 0.90%. The VIX eased 0.59% to 16.79, consistent with a market that isn't stressed. The dollar's gain sits against a backdrop where commentary elsewhere describes near-term Fed hike expectations as having eased after weaker US employment data — a reminder that yield moves and policy-odds repricing don't always point the same direction session to session.

Yields rose across the curve: the 3-month added 0.8bp to 3.718%, the 5-year rose 4.5bp to 4.407% (a 1.03% change on the day, the session's largest move among bonds tracked), the 10-year gained 4.0bp to 4.700%, and the 30-year added 3.2bp to 5.243%. The Fed funds target remains 3.50-3.75%, with the live policy question this cycle framed as whether the Fed hikes rather than cuts. Commentary elsewhere notes weaker US employment data has trimmed near-term Fed hike expectations, even as yields ticked higher today. On the calendar: the NFIB Small Business Index (forecast 97.8, prior 97.4), ADP Weekly Employment Change, and Existing Home Sales (forecast 4.05M, prior 4.09M) are due, all low-impact. US CPI for July lands Wednesday, the week's bigger test for Fed pricing.

EUR/USD eased 0.13% to 1.1543, consolidating just under three-week highs after eurozone investor confidence (Sentix) turned positive at 0.9 in August from -3.1 in July, even as its inflation gauge worsened. GBP/USD rose 0.11% to 1.3506, a modest gain on mixed signals over a possible Iran-Oman deal covering Strait of Hormuz shipping. USD/JPY climbed 0.87% to 159.14, with the yen weighed by concern over Japan's current account position and carry-trade demand outweighing a hawkish BoJ July Summary of Opinions; Tokyo markets are shut today for Mountain Day. USD/CAD ticked up 0.06% to 1.3945, holding a narrow range despite a sharp rally in oil.

USD/CAD edged up 0.06% to 1.3945, holding a narrow, consolidative range on the session. The move came even as oil rallied hard — WTI up 6.30% to $81.94, Brent up 4.70% to $87.48 — a combination normally CAD-supportive that still didn't pull the pair out of its range, with Iran-Oman talks over Strait of Hormuz shipping still unresolved. The bigger driver remains last week's Canadian jobs report: July employment rose 75,100 versus 15,000 expected, with unemployment falling to 6.4%, a two-year low, against a soft US payrolls print. The Bank of Canada held its rate at 2.25% on July 15, its sixth straight hold; the next decision isn't until September 2. No top-tier Canadian data is due today — Wednesday's US CPI is the next test for the pair.

Today's calendar centers on Australia: the RBA's Cash Rate decision (14:30, forecast 4.35%, matching the previous reading), its Monetary Policy Statement, Rate Statement, and a Press Conference at 15:30. Elsewhere, Italian Trade Balance prints at 18:00 (forecast 4.74B), the US NFIB Small Business Index follows at 20:00 (forecast 97.8), ADP Weekly Employment Change near 22:15, and US Existing Home Sales at 00:00 (forecast 4.05M). The API Weekly Statistical Bulletin lands at 06:30. All are low-impact aside from the RBA slate. The week's bigger catalyst, US CPI for July, is due Wednesday.