Today delivered the data shock the week had been quietly dreading. US retail sales fell 0.6% in July - the steepest monthly drop in over a year, against a consensus expecting a modest gain - and the University of Michigan's preliminary August sentiment reading collapsed to 51 from July's 55.2, ending two months of recovery. The combination cracked the dollar's remaining support, pushed EUR/USD above 1.1570 for the first time this week, and drove USD/CAD through the 1.3880 target that this briefing has held since Monday. That level mattered not just as a price target but as the signal that the 0th percentile CFTC CAD short - nearly 179,000 contracts at the peak - is now in genuine unwind mode. It broke cleanly today, with Canadian manufacturing and wholesale data simultaneously beating expectations and adding bilateral pressure to the pair.
Gold held above $4,350, WTI ranged between $80.77 and $82.99 with the Bessent Hormuz floor and the retail demand collapse acting as competing boundaries, and USD/JPY drifted toward 159.10 as the dollar weakened on the data tape. Heading into the weekend, the Hormuz blockade remains unresolved, the Bank of Japan's September meeting is live for a rate move to 1.25%, and Chair Warsh's first major Jackson Hole address on August 28 now arrives in a dramatically more complicated environment than a simple inflation-cooling narrative would have required.
Subscribers to the full briefing have the complete breakdown of which morning calls hit, which did not, where the USD/CAD trade stands after reaching target, and the precise setup for next week's FOMC minutes and Jackson Hole positioning.