Morning Kickstart: Dollar mixed as yields ease and oil supply improves

<p>The U.S. dollar is mixed to start the North American session on the final trading day of September and the third quarter. Sterling is leading the gains against the greenback, while the Australian dollar is the weakest of the major currencies in the morning snapshot.</p><p>U.S. Treasury yields are modestly lower, but equity futures are struggling to find a common direction. The S&P is little changed, while the Dow and Nasdaq are pointing lower.</p><p>The overnight news brings competing signals. Improving Middle East oil supply offers some relief on the energy front, but inflation remains a concern. Australia’s headline inflation accelerated, while the European data included stronger UK growth and another upside inflation surprise from Italy.</p><p>Middle East: Improving oil supply is the latest focus</p><p><a href="https://investinglive.com/commodities/recap-oil-slides-as-middle-east-exports-recover-and-us-moves-to-add-supply/" rel="follow">InvestingLive’s overnight oil recap</a> reported that Saudi Arabia resumed tanker loadings at its Red Sea port of Yanbu following the restart of the East-West Pipeline. The United States also offered up to 40 million barrels from the Strategic Petroleum Reserve.</p><p>Oil finished Tuesday near session lows, with WTI around $89 and Brent around $103. </p><p>Separately, <a href="https://investinglive.com/commodities/goldman-persian-gulf-oil-exports-back-at-2025-average-after-doubling-in-september/" rel="follow">Goldman Sachs estimated that Persian Gulf oil exports</a>, including shipments classified as “dark exports,” had recovered to their 2025 average after doubling during September.</p><p>For traders, the useful distinction is between improving supply and a lasting diplomatic resolution. More oil reaching the market can reduce supply pressure even while geopolitical risks remain elevated. The next question is whether that recovery can be sustained.</p><p>U.S. dollar snapshot is mixed</p><p>The dollar is lower against five of the seven major currencies, with gains against the Australian dollar and Swiss franc:</p><ul><li><p>EURUSD: 1.1353 — USD lower by 0.11%.</p></li><li><p>USDJPY: 157.02 — USD lower by 0.17%.</p></li><li><p>GBPUSD: 1.3287 — USD lower by 0.44%.</p></li><li><p>USDCHF: 0.8345 — USD higher by 0.10%.</p></li><li><p>USDCAD: 1.4178 — USD lower by 0.07%.</p></li><li><p>AUDUSD: 0.6970 — USD higher by 0.19%.</p></li><li><p>NZDUSD: 0.5645 — USD lower by 0.11%.</p></li></ul><p>The pound’s outperformance comes alongside better-than-expected UK growth figures. Meanwhile, the Australian dollar remains lower against the greenback despite Australia’s higher headline inflation reading.</p><p>U.S. stock futures are mixed</p><p>U.S. futures are mixed in the latest update:</p><ul><li><p>Dow futures: down 44 points.</p></li><li><p>S&P 500 futures: up 1 point.</p></li><li><p>Nasdaq 100 futures: down 58 points.</p></li></ul><p>Those modest changes leave the opening direction uncertain. Traders will be looking for the next catalyst to push prices out of the early indecision.</p><p>U.S. Treasury yields are modestly lower</p><p>Yields are lower across the four key maturities:</p><ul><li><p>2-year: 4.8766%, down 1.24 basis points.</p></li><li><p>5-year: 5.0500%, down 1.30 basis points.</p></li><li><p>10-year: 5.2363%, down 1.87 basis points.</p></li><li><p>30-year: 5.5704%, down 2.36 basis points.</p></li></ul><p>The declines are modest, with the largest pullback at the long end. Lower yields can ease some pressure on rate-sensitive assets, but the levels themselves remain important. A small decline does not establish a sustained reversal.</p><p>Overnight economic news</p><p>The European economic calendar showed a mix of stronger growth and persistent price pressures:</p><ul><li><p>UK final GDP: +0.5% quarter over quarter versus +0.4% expected and +0.4% previously.</p></li><li><p>UK business investment: +1.8% versus +1.7% expected and +1.7% previously.</p></li><li><p>UK current account: a £19.9 billion deficit versus a £25.6 billion deficit expected.</p></li><li><p>German import prices: +1.0% month over month versus +0.6% expected and +0.2% previously.</p></li><li><p>German retail sales: +1.3% versus +1.6% expected, following a revised 3.2% decline.</p></li><li><p>German unemployment change: +12,000 versus +1,000 expected and +5,000 previously.</p></li><li><p>French consumer spending: −0.5% versus unchanged expected.</p></li><li><p>French preliminary CPI: −0.3% month over month versus −0.5% expected.</p></li><li><p>Italian preliminary CPI: +0.7% month over month versus +0.2% expected.</p></li></ul><p><a href="https://investinglive.com/news/italy-september-preliminary-cpi-4-2-vs-3-8-y-y-expected/" rel="follow">Italian annual inflation at 4.2%, above the 3.8% forecast</a>. That adds another inflation concern to the European morning.</p><p>Australia: Headline inflation rises, underlying reading is softer</p><p><a href="https://investinglive.com/news/australia-august-cpi-4-0-as-fuel-jumps-trimmed-mean-below-forecast-at-0-2-m-m/" rel="follow">Australian August CPI rose to 4.0% year over year</a>, matching expectations and accelerating from 3.5%, with fuel contributing to the increase.</p><p>However, trimmed-mean inflation rose 0.2% month over month versus 0.3% expected, while its annual rate held at 3.6%.</p><p>That distinction matters. The headline shows a larger inflation burden, but the underlying measure provides a less aggressive signal. For the AUDUSD, traders still need to judge whether the news changes the price action and technical bias.</p><p>China: Manufacturing returns to expansion</p><p><a href="https://investinglive.com/news/china-official-manufacturing-pmi-returns-to-growth-at-50-1-non-manufacturing-50-2/" rel="follow">China’s official manufacturing PMI rose to 50.1</a>, matching expectations and improving from 49.8. The non-manufacturing index increased to 50.2 from 49.0, above the 49.3 forecast.</p><p>The private manufacturing survey was stronger at 52.1 versus 51.6 expected and 51.5 previously.</p><p>A reading above 50 signals expansion. The official manufacturing result is only just above that dividing line, but it represents an improvement after two months of contraction.</p><p>What matters for traders next?</p><p>With the dollar mixed and equity futures showing little conviction, preparation becomes important. Know the levels that define control before the next headline or data release arrives.</p><p>As I explain in my book Attacking Currency Trends, a technical level gives traders a place to define and limit risk. If the price holds the level, the trading premise remains intact. If it breaks and stays beyond it, the premise needs to be reassessed.</p><p>In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. For each pair, I outline the bias, the risk-defining levels and the targets that would give either the buyers or sellers more control.</p> This article was written by Greg Michalowski at investinglive.com.