The Eurozone is set to release August CPI figures today, with annual inflation expected to accelerate to 9.0% from 8.9% in July, well above the ECB’s 2% target. The data will likely add to pressure on the ECB to hike rates aggressively at its upcoming September meeting even amid the mounting risk of a recession.

On the other hand, labor demand showed no signs of cooling as U.S. job openings rose to 11.239 million in July and the prior month was revised sharply higher. A separate report showed consumer confidence rebounded strongly in August after three straight monthly declines.

Traders are pricing in a 74.5% chance of a third straight 75-basis point rate hike at the Fed's September meeting.

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Equities:

In Wall Street, U.S. stocks closed lower for a third straight session on Tuesday as a rise in job openings fueled fears the U.S. Federal Reserve has another reason to maintain its aggressive path of interest rate hikes to combat inflation. Each of the 11 S&P 500 sectors were in negative territory, with the energy sector down 3.36%, the biggest percentage decliner, as oil prices settled down more than 5% on concerns that the slowing of global economies could sap demand.

The Dow Jones Industrial Average fell 337 points or 1.05%, to 31,815, the S&P 500 lost 44.45 points or 1.10%, to 3,986.15 and the Nasdaq Composite dropped 145.3 points, or 1.16%, to 12,345.9.

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Currency Market:

The U.S. dollar drifted lower, retreating from the 20-year peak seen earlier in the week as a nascent rebound in the euro gathers pace.

The Dollar Index traded 0.1% lower to 108.662, after starting the week at a new two-decade high at 109.48.

EUR/USD rose 0.1% to 1.0017, while GBP/USD rose 0.2% to 1.1680, with Goldman Sachs warning that U.K. inflation could top 22% next year if natural gas prices remain elevated in the coming months.

USD/JPY fell 0.3% to 138.39, after data showed Japanese retail sales grew more than expected in July. USD/CNY fell 0.2% to 6.8952. The risk-sensitive AUD/USD rose 0.6% to 0.6895.

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Commodities: Gold

Gold prices fell and were set for a fifth straight month of losses amid fears of aggressive policy tightening by the Federal Reserve.

Spot gold fell 0.3% to $1,714 an ounce, while gold futures dropped 0.2% to $1,732.85 an ounce.

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Commodities: Oil

Oil prices recovered slightly as data pointed to firm U.S. fuel demand, providing respite after a 5% drop a day earlier on fears that demand will suffer from increased China COVID curbs and central bank interest rate hikes.

WTI crude futures jumped 82 cents or 0.9% to $92.46 a barrel. Brent crude futures climbed 89 cents or 0.9% to $100.20 a barrel.
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