Dollar wavers, yields dip and oil supply picture improves to wrap September

The greenback is trading in mixed fashion as North American markets open for the last session of both September and the third quarter. Among the majors, the pound is recording the strongest advance against the dollar, while the Australian dollar is lagging the most in the early read.

Treasury yields have slipped slightly, but stock futures are not moving in unison. The S&P 500 is roughly flat, whereas futures on the Dow and the Nasdaq sit in negative territory.

Overnight headlines are pulling in opposite directions. The energy picture has improved with more oil supply from the Middle East, though price pressures are still a worry. Australian headline inflation picked up, and the European releases showed firmer UK growth plus another inflation beat in Italy.

Middle East: supply improvements now take center stage

Saudi Arabia has resumed tanker loading at the Red Sea port of Yanbu after the East-West Pipeline was restarted, according to InvestingLive's overnight oil recap. In a separate move, the United States also made as many as 40 million barrels from the Strategic Petroleum Reserve available.

Tuesday's crude settlement came near the day's bottom, with WTI around $89 and Brent near $103.

Separately, Goldman Sachs estimated that Persian Gulf crude exports, counting shipments classified as “dark exports,” had returned to their 2025 average following a doubling in September.

Traders should separate the short-term supply improvement from any durable diplomatic outcome. Additional barrels can ease supply tightness even with geopolitical dangers still high. Whether the recovery holds is the key open question.

U.S. dollar: the morning mix

The dollar trades down against five of the seven major currencies and higher versus the Australian dollar and the Swiss franc:

• EURUSD: 1.1353 — dollar down 0.11%.
• USDJPY: 157.02 — dollar down 0.17%.
• GBPUSD: 1.3287 — dollar down 0.44%.
• USDCHF: 0.8345 — dollar up 0.10%.
• USDCAD: 1.4178 — dollar down 0.07%.
• AUDUSD: 0.6970 — dollar up 0.19%.
• NZDUSD: 0.5645 — dollar down 0.11%.

Sterling's strength follows UK growth data that came in above forecasts. The Aussie, meanwhile, is still down against the dollar even though Australia's headline inflation rate was higher.

Stock futures in the U.S. point in different directions

The latest futures snapshot shows a split:

• Dow futures: 44 points lower.
• S&P 500 futures: 1 point higher.
• Nasdaq 100 futures: 58 points lower.

The small moves leave the direction of the open unclear. Market participants are awaiting the next catalyst to break the early indecision.

Treasury yields have eased a touch

All four key maturities are showing declines:

• 2-year: 4.8766%, off 1.24 basis points.
• 5-year: 5.0500%, off 1.30 basis points.
• 10-year: 5.2363%, off 1.87 basis points.
• 30-year: 5.5704%, off 2.36 basis points.

These are small moves, with the biggest drop at the long-dated end. Falling yields can relieve some pressure on rate-sensitive positions, but the level of yields still carries weight. A modest slip is not proof of a lasting turnaround.

Economic data overnight

Europe's release slate delivered both firmer growth and sticky inflation figures:

• UK final GDP: +0.5% on the quarter, compared with +0.4% forecast and +0.4% previously.
• UK business investment: +1.8%, compared with +1.7% expected and +1.7% previously.
• UK current account: deficit of £19.9 billion, narrower than the £25.6 billion expected.
• German import prices: +1.0% month over month, above +0.6% expected and +0.2% prior.
• German retail sales: +1.3% versus +1.6% expected, after a revised 3.2% drop.
• German unemployment change: +12,000 versus +1,000 expected and +5,000 prior.
• French consumer spending: -0.5% versus expectations of no change.
• French preliminary CPI: -0.3% month over month versus -0.5% expected.
• Italian preliminary CPI: +0.7% month over month versus +0.2% expected.

Italy's year-on-year inflation came in at 4.2%, higher than the 3.8% projection. It is yet another inflation worry for Europe's morning.

Australia: headline CPI accelerates, underlying gauge softer

Australia's August CPI climbed to 4.0% on the year, in line with forecasts and up from 3.5%, boosted by fuel prices.

The trimmed-mean measure, however, was up 0.2% month over month against a 0.3% consensus, and its yearly pace stayed at 3.6%.

The gap between the two is significant. Headline inflation points to a bigger cost-of-living load, while the core gauge is more restrained. For AUDUSD, the market must still decide whether the data alters the tone and technical setup.

China: factory sector back in expansion territory

The official manufacturing PMI for China printed 50.1, in line with forecasts and up from 49.8. The non-manufacturing gauge rose to 50.2, topping the 49.3 forecast after a previous 49.0.

The separate private sector factory survey read 52.1, compared with 51.6 forecast and 51.5 in the prior period.

Any number above 50 indicates growth. The official factory PMI sits only barely above that threshold, yet it still marks progress after two months of shrinking activity.

Trading focus: what comes next

When the dollar is mixed and futures show little commitment, being prepared is key. Identify the levels that determine control ahead of the next headline or economic release.

A technical level offers traders a reference point for defining and limiting risk. While price holds it, the trade's premise is intact; a break and close beyond it means reassessment.