Global Macro Commentary: August 5: Gold Rallies, Dollar Weakens

Research evidence excerpt

M

Update

August 5, 2026 10:29 PM GMT

Global Macro Commentary | Global

Morgan Stanley & Co. LLC

Molly Nickolin

Strategist

August 5: Gold Rallies, Dollar

Weakens

Lingdi Xu

Economist

Sofia Palacios

Strategist

Potential Hormuz shipping deal lowered oil risk; mixed US labor

and services data; Treasury retained coupon guidance; Brazil cut

25bp; Asia tech rallied; gold gained 4.1%; DXY at 99.68 (-0.2%);

US 10y at 4.61 (+0.0bp).

Optimism around a potential reopening of the Strait of Hormuz weakened the

dollar and supported EM assets, while mixed US data and hawkish Fed

commentary left Treasuries steady and limited gains in US equities.

Developed Markets

• US rates were little changed overall, with modest front-end

outperformance (2y: -1.1bp; 30y: -0.6bp) as investors balanced softer

labor data against hawkish Fed commentary. ADP private payrolls rose 44k

in July, below the 65k consensus and down from a revised 95k in June. The

Morgan Stanley Asia Limited+

Gek Teng Khoo

Strategist

Morgan Stanley MUFG Securities Co., Ltd.+

Hiromu Uezato

Strategist

Morgan Stanley Asia Limited+

Luyao Liu

Strategist

Morgan Stanley & Co. International plc+

Jasper Knyphausen

Strategist

ISM services index increased to 54.1, slightly below expectations, as stronger

business activity and new orders were offset by a fall in employment to 47.4

and an increase in the prices component to 70.3. Minneapolis Fed President

Kashkari said policymakers should begin raising rates incrementally, while

Governor Cook reiterated that she was prepared to tighten if disinflation did

not continue. The mixed signals left the belly and long end unchanged

despite some short covering in 2y Treasury futures. Markets remained

focused on Friday’s employment report for a clearer indication of whether

resilient demand or softer hiring would dominate the policy outlook.

• Treasury supply developments had limited market impact after the

quarterly refunding broadly matched expectations. The Treasury set the

refunding total at $125bn and retained guidance that nominal coupon and

floating-rate-note auction sizes would remain unchanged for at least the next

several quarters. The package included $58bn of 3y notes, $42bn of 10y

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