The auto industry is gearing up for a no-octane shift. The Biden administration is putting pedal to the metal on electric vehicles, offering $12 billion in grants and loans to help automakers and suppliers convert plants to manufacture EVs. This aims to accelerate the transition away from gas-guzzlers while cushioning the blow for autoworkers. The United Auto Workers union welcomes the support for good union jobs amid the EV revolution. Separately, $3.5 billion will kickstart more US production of EV batteries. With transportation being the top source of emissions, these investments fuel hopes of cleaner skies ahead.

EQUITY

Major indexes closed lower for the month of August, mostly due to reinflation fears, rising interest rates, and recession worries, but stocks rebounded last week as the Fed signalled it may slow the pace of rate hikes. Key economic reports like consumer spending and unemployment claims were largely in line with expectations this week, while lower than expected private payroll growth and GDP point to a weakening economy. Individually, Eli Lilly is the biggest winner for the month, gaining almost 22% even after it reduced the price of insulin. 

GOLD

Gold prices were slightly down for August, with recent gains boosted by hopes of less aggressive Fed rate hikes but pressured by a strengthening dollar. A 0.2% rise in the Fed's preferred core PCE inflation gauge for July kept gold gains in check Thursday as it signalled rates may still climb further; however, gold posted a weekly gain, supported by recent weaker economic data that raises expectations of a less hawkish Fed.

OIL

Oil prices extended gains to a fourth session Friday, reaching a two-week high, as tightening supplies and expected OPEC+ output cuts outweighed demand concerns. US crude stockpiles have plunged by over 30 million barrels since mid-July, showing robust demand. Saudi Arabia is expected to extend its 1 million bpd voluntary cut into October, but weak Chinese manufacturing data and a rise in US core inflation that could spur more Fed hikes capped oil's gains.

CURRENCY

The US dollar index rose this week despite declining Treasury yields. Relentless personal spending and inflation readings reinforced expectations for further Fed rate hikes. However, the dollar's multi-week rally may be nearing an end ahead of Friday's jobs report. China's yuan reached a 3-week high following the PBOC's reserve requirement rate cut aimed at stabilising the currency, while the euro fell as ECB policymakers struck a more dovish tone.