Daily Market Outlook, August 25, 2026

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Missive - Tech Stabilizes Ahead Of Nvidia Test 

US stock-index futures pointed to a tentative bounce on Tuesday morning, with Nasdaq 100 contracts ticking up 0.4% following Monday’s tech-led drawdowns. The primary focus across global dealing desks remains firmly fixed on Wednesday’s earnings report from Nvidia, which stands as the acid test for market sentiment around high-valuation AI exposure. European equities opened on a firmer footing as broader risk appetite steadied, while MSCI’s Asia Pacific benchmark recovered early losses to trade largely unchanged.


The immediate pressure on megacap tech eased following a sharp slide in the Philadelphia Semiconductor Index to its lowest levels since July. Nvidia’s multi-day losing streak reflects proactive portfolio de-risking rather than structural distress, but the market's tolerance for anything short of a flawless report is razor-thin. Outside traditional equities, Bitcoin vaulted back above $80,000 for the first time since May, signaling that speculative liquidity is quietly returning to alternative asset classes.


In fixed income, macro desks are closely tracking the lingering aftershocks of Treasury Secretary Bessent’s market intervention. While the move was intended to alleviate fiscal supply pressures, it has reignited debate over the widening US budget deficit. The primary casualty has been the US Dollar, which has slumped to three-month lows. Yet, position data through mid-August indicates leveraged funds remain net long USD by $29 billion—a sharp contrast to the massive net short positions held during the onset of the Iran conflict. While options markets show a jump in demand for EUR/USD upside calls, an extended multi-month dollar breakdown will likely require deeper friction between the Treasury and the long end of the US yield curve.


Energy and safe-haven markets are balancing mixed fundamental signals. Brent crude stabilized around $92.45/bbl after Secretary Bessent warned of fresh economic sanctions against nations trading with Iran, restoring a geopolitical risk premium to prompt contracts. Gold pulled back slightly to $4,635/oz after retesting multi-month highs on deficit-driven inflation fears. Meanwhile, the Canadian Dollar held steady as markets await Ottawa's formal retaliation package following Washington's 50% tariff imposition.


A notable structural shift is quietly playing out across European sovereign debt markets, highlighted by the historic convergence between French OATs and Italian BTPs. In July 2022, French 10-year paper traded 182 bps inside Italy; today, that spread has virtually collapsed, with OATs yielding just 7 bps below BTPs. This repricing reflects starkly divergent fiscal policy paths: Rome’s wind-down of the expensive "Superbonus" program helped trim its deficit from 8.9% in 2021 toward 3.1% of GDP by 2025, compressing the BTP-Bund spread significantly.


Conversely, political gridlock in Paris following the June 2024 snap election has stalled structural spending cuts. With France’s deficit expanding to 5.8% of GDP and triggering an EU Excessive Deficit Procedure, near-term fiscal consolidation appears unlikely ahead of the 2027 presidential cycle. However, given that Italy’s sovereign rating remains three notches below France at major agencies, the OAT-BTP spread looks historically stretched. Should European rate volatility pick up, Italy’s higher historical beta to German Bunds could expose the spread to a sharp mean-reversion move.


Macro to Micro: Risk assets are attempting to establish a local floor, but market depth will remain constrained until Nvidia reports. While lower crude prices and a pause in Treasury yields offer brief breathing room, the structural narrative is shifting toward fiscal discipline, debt monetization, and currency debasement. For traders, the play into midweek centers on managing megacap tech exposure while monitoring whether the US Dollar's breakdown triggers a broader, cross-asset portfolio rebalancing.

Overnight Headlines

  • US Tells Iran’s Trade Partners To Cut Ties Or Face Sanctions

  • Bessent’s ‘D-Day’ Threat Hinges On Willingness To Hit China

  • US Expands Sanctions On Oil Mogul’s Network In Iran Crackdown

  • Houthis Claim Strike On Saudi Tanker In Latest Red Sea Escalation

  • Groundwork Set For BoJ Rate Hike Next Month, Ex-Official Says

  • RBA Debated Rate Hike In August, With Board Divided

  • Trump Threatens 50% Tariff On Automobiles, Parts From Canada

  • Canada To Announce Retaliatory Tariffs Against US

  • Bond Market Anxiety Raises Stakes For Warsh’s Jackson Hole Speech

  • German Finance Chief Says Trump Is To Blame For Surging Yields

  • Gold Holds Near Three-Month High As Traders Weigh Treasury Moves

  • Boeing Awarded F-15 Contract With Ceiling Value Of $131.2B

  • German State Leader Urges Joint Action To Avert VW Plant Closures

  • BTC Reaches Three-Month High Of $80,000 As Momentum Returns

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

  • EUR/USD: 1.1300 (EU786m), 1.1725 (EU729.2m), 1.1225 (EU636m)

  • USD/JPY: 161.50 ($320m)

  • AUD/USD: 0.7130 (AUD874.2m), 0.6900 (AUD706.4m)

  • USD/CNY: 6.7850 ($377.6m), 6.7390 ($300m)

  • USD/CAD: 1.3755 ($582m), 1.4020 ($315m)

CFTC Positions as of 21/7/26

  • Equity fund speculators increase S&P 500 CME net short position by 5,978 contracts to 267,509

  • Equity fund managers raise S&P 500 CME net long position by 10,361 contracts to 952,422

  • Speculators increase CBOT US 5-year Treasury futures net short position by 33,349 contracts to 1,274,105

  • Speculators increase CBOT US 10-year Treasury futures net short position by 31,908 contracts to 946,961

  • Speculators trim CBOT US 2-year Treasury futures net short position by 93,706 contracts to 927,337

  • Speculators increase CBOT US UltraBond Treasury futures net short position by 19,941 contracts to 346,724

  • Speculators increase CBOT US Treasury bonds futures net short position by 39,405 contracts to 219,012

  • Bitcoin net long position is 2,736 contracts

  • Swiss franc posts net short position of -27,278 contracts

  • British pound net short position is -54,573 contracts

  • Euro net short position is -59,088 contracts

  • Japanese yen net short position is -52,893 contracts


Technical & Trade Views


SP500 - 7620 weekly bull/bear level

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 7620 Target 7870

  • Below 7580 Target 7490

DXY - 99 weekly bull/bear level

  • Daily VWAP Bullish

  • Weekly VWAP Bearish

  • Above 99.20 Target 99.75

  • Below 99 Target 97.50

EURUSD - 1.16 weekly bull/bear level

  • Daily VWAP Bullish>Bearish

  • Weekly VWAP Bullish

  • Above 1.16 Target 1.18

  • Below 1.1550 Target 1.1475

GBPUSD - 1.3550 weekly  bull/bear level

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 1.3550 Target 1.3690

  • Below 1.35 Target 1.3450

USDJPY - 160 weekly bull bear level 

  • Daily VWAP Bullish

  • Weekly VWAP Bearish>Bullish

  • Above 155 Target 160

  • Below 155 Target 152

XAUUSD - 4500 weekly bull bear level

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 4500 Target 4725

  • Below 4450 Target 4385

BTCUSD - 74k weekly bull bear level

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 74k Target 83k

  • Below 73.8k Target 70.8k

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