Narrow ranges ahead of Warsh speech and key data releases

The US dollar has edged slightly higher as North American traders begin the last session of the week, though moves remain contained. Against the euro, yen, pound, franc, Canadian dollar and New Zealand dollar the greenback is stronger, while it is a touch softer versus the Australian dollar.

The intraday trading bands are notably tight:

• EURUSD: 15 pips
• USDJPY: 39 pips
• GBPUSD: 17 pips
• USDCHF: 20 pips
• USDCAD: 14 pips
• AUDUSD: 14 pips
• NZDUSD: 17 pips

These narrow swings suggest the market is awaiting a fresh catalyst. That could set the stage for wider moves as the North American session gets under way and major events approach. One such event is coming up shortly.

US Treasury yields are edging higher, with the curve steepening as long-end maturities see bigger gains:

• 2-year yield: 4.234%, up 0.2 basis points
• 5-year yield: 4.407%, up 1.1 basis points
• 10-year yield: 4.688%, up 1.6 basis points
• 30-year yield: 5.209%, up 1.8 basis points

The highlight of the day is Fed Chair Kevin Warsh's keynote at the Jackson Hole Economic Policy Symposium at 10:00 AM ET. It marks his first Jackson Hole keynote since taking over as Fed chair in May. The symposium's broader theme is "Financial Innovation — Implications for Payments and Policy," but traders will be watching for signals on inflation, growth, the Treasury market and the monetary policy path. With the Fed having held rates steady at both meetings under Warsh, any shift in expectations for the September meeting will draw intense scrutiny.

At 8:30 AM ET, Canada's second-quarter GDP numbers are due. Annualized growth is forecast at 3.4%, a sharp rebound from the revised 0.1% contraction in Q1. Month-on-month GDP for June is seen rising 0.2%, following a 0.3% gain in May.

The final University of Michigan survey for August arrives at 10:00 AM ET:

• Consumer sentiment: 51.0 expected versus 51.0 preliminary and 55.2 in July
• Current conditions: 51.8 expected versus 51.8 preliminary and 54.8 in July
• Expectations: 50.6 preliminary versus 55.4 in July
• One-year inflation expectations: 4.3% preliminary versus 4.2% in July
• Five-year inflation expectations: 3.3% preliminary versus 3.3% in July

The sentiment data will vie for attention with Warsh's remarks. Revisions to inflation expectations could affect Treasury yields and the dollar, especially if they either align with or contradict the Fed chair's message.

In pre-market US stock index trading:

• Dow is up 14.56 points
• S&P is down -13 points
• Nasdaq 100 is down -105 points

In the Middle East, the focus remains on diplomatic efforts to reopen the Strait of Hormuz. Iran has agreed to compile a list of conditions for restoring normal maritime traffic, while Qatar and Oman are trying to broker a workable deal. Some tanker traffic has resumed, but flows are still far below normal and US-Iran talks remain deadlocked. Crude oil is little changed today but on track for a weekly loss, indicating the market is cautiously pricing in improved shipping conditions while still factoring in a geopolitical risk premium.

For traders, the combination of tight overnight ranges, slightly higher yields and significant event risk could produce momentum later in the session. Technical levels will help define bias, risk and targets once the market makes its next move. Be aware. Be prepared