InvestMacro

The US stocks were not traded yesterday due to the bank holiday (Labor Day).

The Mexico Manufacturing PMI rose to 50.2 in August 2025, up from 49.1 in July. This was the first reading above the 50.0 threshold in 14 months, indicating an improvement in factory activity. On the other hand, business sentiment has significantly worsened compared to July, with companies becoming more cautious about their one-year outlook, despite some respondents expecting production volumes to grow.

European equity markets were primarily up on Monday. The German DAX (DE40) rose by 0.57%, the French CAC 40 (FR40) closed up 0.05%, the Spanish IBEX35 (ES35) gained 0.02%, and the UK’s FTSE 100 (UK100) closed up 0.10%. On the first trading day of September, the DAX closed higher, ending a five-day losing streak, helped by defense and pharmaceutical stocks. Traders assessed a series of PMI indices and anticipated key economic releases this week, with Eurozone inflation data and the US Non-Farm Payrolls report in focus.

Domestically in Germany, the final manufacturing PMI came in at 49.8 in August, up from 49.1 in July and slightly below the flash estimate of 49.9, marking the best reading since mid-2022. Defense stocks were among the top gainers: Renk climbed 6.8%, Hensoldt added 5%, and Rheinmetall jumped 3.5% after the UK secured a £10 billion warship deal with Norway, the largest naval export in history. The stock rally was further boosted by comments from EU President von der Leyen about deploying troops to Ukraine as part of future security commitments.

On Tuesday, silver (XAG/USD) traded at around $40.7 per ounce (a 14-year high) after rising more than 2% in the previous session. Markets are pricing in a nearly 90% probability of a 25 basis point cut later this month. San Francisco Fed President Mary Daly stated on Friday that the Central Bank is prepared to ease policy given risks to the labor market, while suggesting that tariff-driven inflation might be temporary. Demand for safe-haven assets also supported precious metals amid concerns about the Fed’s independence and renewed uncertainty tied to President Donald Trump’s tariffs. In the industrial sector, demand was supported by China’s solar energy boom, with solar panel exports growing by over 70% in the first half of the year, driven mainly by strong shipments to India.

WTI crude oil prices rose above $64 per barrel on Monday, recovering from earlier losses amid concerns about supply disruptions caused by the ongoing conflict between Russia and Ukraine. Ukrainian President Volodymyr Zelenskyy promised on Sunday to expand strikes deeper into Russian territory following drone attacks on Ukraine’s energy facilities. Traders are also assessing whether India will yield to US pressure and halt purchases of Russian oil after Washington imposed secondary tariffs against Delhi last week. Investors are also awaiting this week’s OPEC+ meeting, as the group’s accelerated production increases are raising the global supply outlook.

In early September, the US natural gas (XNG/USD) prices climbed above the $3 per MMBtu mark, continuing a rally from a nine-month low of $2.73 on August 20, amid expectations of reduced domestic supply. New data showed that Russia’s LNG exports dropped by more than 6% year-on-year through August, which is increasing the share of US LNG in global trade as European and Asian partners source energy elsewhere. Accordingly, US gas consumers face higher competition for smaller domestic stockpiles. According to the latest data, gas storage inventories remain tight, with EIA data showing a 3.4% year-on-year decrease.

Asian markets were mostly down yesterday. The Japanese Nikkei 225 (JP225) fell by 1.24%, the Chinese FTSE China A50 (CHA50) declined by 0.41%, Hong Kong’s Hang Seng (HK50) gained 2.15%, and the Australian ASX 200 (AU200) posted a negative result of 0.51%.

On Tuesday, the New Zealand dollar fell to around $0.589. Sentiment worsened due to uncertainty surrounding US trade policy, as recent court rulings heightened concerns and caution regarding export-dependent currencies. Domestically, attention is focused on the upcoming appointment of a new RBNZ head, with Prime Minister Christopher Luxon indicating that a decision could be made within weeks. At the same time, markets continue to assess the likelihood of further monetary policy easing after the Central Bank’s recent rate cut and its signal that additional measures may be needed to protect the economy from global and domestic headwinds.

The US stocks finished Friday lower. The Dow Jones (US30) Index fell by 0.20% for the day and 0.13% for the week. The S&P 500 (US500) dropped 0.64% for the day and rose 0.04% for the week. The tech-heavy Nasdaq (US100) closed down 1.22% for the day and 0.17% for the week. The Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, increased 2.9% year-over-year in July, matching expectations but marking its fastest pace since February. Technology and AI-related stocks pressured the market: Nvidia fell by 3.4% and Dell plummeted by 8.9% amid competition and rising costs for AI products. Alibaba surged 12.9% on strong cloud results, while Caterpillar (-3.6%) and Marvell (-18.6%) declined on tariff and earnings concerns. The US stock market will be closed on Monday, September 1, for the Labor Day holiday.

The Canadian dollar traded near 1.38 per US dollar after data on Canada’s second-quarter economic growth significantly undermined recovery assumptions and raised the risk of a Bank of Canada policy easing. Statistics Canada reported that real GDP in Q2 fell by 0.4% from the previous quarter, as exports contracted by 7.5% due to the impact of US tariffs. The growth gap with the US widened after the BEA’s second estimate showed US Q2 GDP at 3.3% year-over-year, which amplified expectations that the Canadian rate would have to fall sooner/further compared to the Fed and diminished support for the Canadian dollar, even amid a mixed Dollar Index following the PCE data.

European stock markets were mostly lower on Friday. Germany’s DAX (DE40) fell by 0.57% for the day (-1.36% for the week), France’s CAC 40 (FR40) closed down 0.76% (-3.01% for the week), Spain’s IBEX35 (ES35) dropped 0.90% (-2.51% for the week), and the UK’s FTSE 100 (UK100) closed down 0.32% (-1.31% for the week). The DAX in Frankfurt hit its lowest level since August 5, extending losses for a fifth consecutive session. Investors turned more cautious ahead of the weekend, considering political instability in France and rising geopolitical tensions from clashes in Gaza and Ukraine. Meanwhile, inflation data in Europe pointed to limited price pressures. Domestically, Germany’s inflation rate rose to 2.2% in August from 2.0% in July, exceeding market expectations of 2.1% but remaining near the ECB’s 2% target.

Silver surpassed $39.5 per ounce, reaching its highest level since September 2011, as traders bet on a Fed rate cut and weighed high industrial demand. The US data showed that core PCE inflation rose to 2.9% year-over-year in July, its fastest pace since February, and consumer spending jumped the most in four months, signaling a strengthening economy. The data maintained expectations for a September rate cut, with Fed Chair Waller supporting a 25 basis point cut and further easing in the coming months. Markets still expect two rate cuts this year, despite volatile inflation. Industrially, silver demand was supported by China’s solar energy boom, with solar cell exports growing more than 70% in the first half of the year, led by strong demand from India.

WTI crude oil prices fell by 0.9% to reach $64 per barrel on Friday as traders factored in weakening US demand. Attention is also on the upcoming OPEC+ meeting, as the group’s accelerated output increase boosts the global supply expectations. However, this supply increase has not fully reached the US market yet, where the summer driving season is ending, fueling concerns about demand.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by 0.26%, China’s FTSE China A50 (CHA50) rose by 1.56%, Hong Kong’s Hang Seng (HK50) dropped 2.07%, and Australia’s ASX 200 (AU200) showed a negative result of 0.79%.

The official China Manufacturing PMI for August 2025 rose to 49.4 from July’s three-month low of 49.3, marking the fifth consecutive month of declining factory activity and falling short of market estimates of 49.5. Employment levels remained low (47.9 vs. 48.0) due to job uncertainty. On the price front, input costs reached a high since October 2024, while the decline in output prices eased. China’s official Non-Manufacturing PMI for August 2025 increased to 50.3 from July’s eight-month low of 50.1, matching market expectations and signaling moderate growth in service sector activity. The rise occurred amid improved sentiment, helped by a 90-day extension of the US-China tariff truce, which maintained 30% tariffs on Chinese exports to the US and 10% on US goods to China. Looking ahead, business confidence rose to a five-month high (56.2 vs. 55.8), fueled by hopes for policy support and trade stability.

By the end of Tuesday, the Dow Jones Index (US30) was up 0.30%. The S&P 500 Index (US500) rose by 0.41%. The Nasdaq Technology Index (US100) closed up 0.43%. Investors were balancing optimism about corporate earnings with concerns over President Trump’s unprecedented dismissal of Federal Reserve representative Lisa Cook. Trump’s decision to remove Cook over alleged mortgage lending violations fueled fears about the Fed’s independence, drawing close scrutiny from investors and analysts. Cook stated she plans to legally challenge her dismissal, highlighting the potential long-term risks of a politicized Central Bank. Nvidia shares jumped 1.1% ahead of their quarterly report on Wednesday, amid high expectations for the chipmaker in the face of ongoing US-China trade tensions.

According to preliminary estimates, Canadian manufacturing sales increased by 1.8% in July 2025, following a 0.3% rise in June. The growth was led by the transportation equipment and petroleum and coal product subsectors. If the data is confirmed, it will be the strongest monthly increase since October 2024, indicating a moderate turnaround in manufacturing activity after a period of sluggish performance.

European stock markets mostly declined on Tuesday. Germany’s DAX (DE40) fell by 0.50%, France’s CAC 40 (FR 40) closed down 1.70%, Spain’s IBEX35 (ES35) dropped by 0.96%, and the UK’s FTSE 100 (UK100) was down 0.60%. The DAX and other European markets fell for a second consecutive day amid ongoing political turmoil in France. Prime Minister François Bayrou’s warning of a debt crisis came just before a confidence vote scheduled for September 8 in the National Assembly. Opposition parties have stated their intention to vote against the motion, raising the risk of government collapse and political instability across Europe.

WTI crude oil prices fell by 2.4% to $63.20 per barrel on Tuesday, retreating from a nearly three-week high in the previous session as investors weighed geopolitical risks and global demand concerns. The rally on Monday was driven by fears of further disruptions after Ukraine struck Russian energy infrastructure, raising the possibility of tougher US sanctions and deepening fuel shortages in Russia. President Trump warned of new sanctions against Moscow if peace talks stall.

Asian markets were mostly lower on Tuesday. Japan’s Nikkei 225 (JP225) fell by 0.97%, China’s FTSE China A50 (CHA50) dropped by 0.46%, Hong Kong’s Hang Seng (HK50) was down 1.18%, and Australia’s ASX 200 (AU200) had a negative result of 0.41%.

The Australian dollar hovered near the $0.650 mark on Wednesday, pausing its rise from the previous session as investors digested fresh data, including stronger-than-expected inflation figures. The data showed that consumer prices rose by 2.8% year-on-year in July, up from 1.9% in June and exceeding market expectations of 2.3%. Core inflation also increased, with the trimmed mean rising to 2.7% from 2.1% and inflation excluding volatile items and holiday travel climbing to 3.2% from 2.5%. Markets remain confident that the RBA will cut rates in November, despite the volatile CPI data.

In China, Cambricon Technologies has surged by 102% this month after the AI chip manufacturer reported record first-half profits, boosted by Beijing’s promotion of domestic technology amid the DeepSeek AI boom. This rally has pushed the company past Kweichow Moutai to become the most valuable stock on China’s A-share market. Economically, official data showed that China’s industrial profits fell by 1.7% year-on-year in the first seven months of 2025, reflecting continued weakness in domestic demand.

On Monday, the Dow Jones (US30) fell by 0.77%, the S&P 500 (US500) was down 0.43%, and the tech-heavy Nasdaq (US100) closed 0.31% lower. The US stocks had a mixed day, with a clear divide between sectors as markets re-evaluated the scale of potential Fed rate cuts and the impact of tariffs on manufacturers. On Friday, Fed Chair Powell noted that a softening labor market could justify a rate cut at the Fed’s September meeting if employment and price data don’t bring any surprises. However, concerns about high inflation, voiced by other members of the Federal Open Market Committee (FOMC), prevented a sharper rally in the stock markets.

European stock markets declined on Monday. The German DAX (DE40) fell by 0.37%, the French CAC 40 (FR40) closed 1.59% lower, the Spanish IBEX35 (ES35) dropped 0.85%, while the British FTSE 100 (UK100) was not trading. European equities closed lower, pulling back from gains made the previous week as markets continued to assess the global rate outlook and recent corporate news. The banking sector saw a sharp decline, with BBVA and BNP Paribas losing 2% and 3.5% respectively, and UniCredit down 0.4% after converting its synthetic position in Commerzbank into physical shares.

WTI crude oil prices rose by more than 1.5% on Monday to $64.70 per barrel, their highest level in nearly three weeks, as traders continued a four-day rally to weigh geopolitical risks and monetary policy signals. Prices were supported by fears of supply disruptions from Russia after new Ukrainian drone strikes on energy infrastructure, including a fire at an export terminal in Ust-Luga and another at the Novoshakhtinsk oil refinery. Uncertainty over stalled peace talks and US President Trump’s threat to impose new sanctions on Russia and raise tariffs on Indian imports also heightened supply concerns.

Platinum prices held above the $1,350 per ounce mark on Monday after rising for three consecutive sessions, supported by dovish signals on US Fed monetary policy. The metal gained momentum after Fed Chair Jerome Powell’s Jackson Hole speech on Friday, where he indicated that the Central Bank would likely cut interest rates at its next meeting. Markets are currently pricing in an 87% probability of a 25 basis point rate cut in September, up from 75% last week. Additional support came from expectations of a supply cut, as global platinum output is expected to decline slightly this year, primarily due to reduced production in South Africa and Russia amid operational issues, mine closures, aging infrastructure, and cost-cutting measures. On the demand side, platinum’s long-term outlook remains positive, driven by the growth of hydrogen fuel cells and broader green energy adoption.

Asian markets were mostly up on Monday. Japan’s Nikkei 225 (JP225) rose by 0.41%, China’s FTSE China A50 (CHA50) climbed 3.91%, Hong Kong’s Hang Seng (HK50) was up 1.94%, and Australia’s ASX 200 (AU200) closed 0.06% higher.

On Tuesday, the Australian dollar hovered around $0.648 as investors weighed the latest Reserve Bank of Australia (RBA) meeting minutes. The Central Bank indicated that further interest rate cuts are likely over the coming year, with the pace of easing depending on incoming economic data. At its August 2025 meeting, the RBA Board lowered the cash rate by 25 basis points to 3.6%, citing ongoing progress in bringing inflation closer to the mid-point of its 2-3% target range. Markets now expect the RBA to hold rates in September, with a possibility of another cut in November. Longer-term, rates are anticipated to potentially reach 3.10% or even 2.85%.

The New Zealand dollar fell to $0.584 on Tuesday, returning to a four-month low amid trade risks and expectations of further rate cuts from the Reserve Bank. Sentiment weakened after US President Trump threatened China with high tariffs on rare-earth exports and warned of duties on countries supporting digital taxes, which increased risk aversion and put pressure on commodity-linked currencies. The RBNZ’s rate cut last week and its signal of more easing ahead, citing domestic and global growth risks, added further pressure. Markets are now pricing in an almost 50% chance of another rate cut in October and a full cut by November. However, losses were partially offset by a weaker US dollar after Trump’s dismissal of Fed official Lisa Cook over alleged mortgage fraud raised concerns about the Central Bank’s independence.

On Thursday, the Dow Jones Industrial Average (US30) fell by 0.34%, the S&P 500 (US500) dropped by 0.40%, and the Nasdaq (US100) closed down 0.34%. Walmart influenced the sentiment, plunging 4.5% after missing quarterly earnings expectations for the first time since 2022, despite raising its full-year sales and profit expectations. Weakness in other retail stocks heightened concerns about consumer resilience amid higher tariffs and uneven spending. On the data front, jobless claims rose more than expected, while the S&P Global Composite PMI indicated the highest rate of business activity in three years, suggesting a mixed economic backdrop. Investors are now awaiting a speech from Fed Chair Powell on Friday for signals on the Central Bank’s next moves. Futures are pricing in a 73% probability of a September rate cut.

The Mexican peso stabilized at 18.76 per dollar. Markets were digesting Banxico’s decision to cut its key rate by 25 basis points to 7.75% in a split vote. The minutes highlighted that headline inflation for July declined to 3.51%, while core inflation remained elevated at 4.23%. This combination points to both monetary easing and lingering inflation concerns.

European stock markets traded with mixed dynamics yesterday. Germany’s DAX (DE40) rose by 0.07%, France’s CAC 40 (FR40) closed down 0.44%, Spain’s IBEX35 (ES35) rose by 0.08%, and the UK’s FTSE 100 (UK100) closed up 0.23%. Frankfurt’s DAX pared its earlier losses to close slightly higher as traders weighed encouraging PMI data and positive developments in US-EU trade against ongoing uncertainty surrounding peace talks in Ukraine. Preliminary PMI data for August underscored the resilience of major European economies in the face of US tariffs and global uncertainty. Germany’s private sector activity in August rose slightly from the previous month, driven by higher-than-expected manufacturing figures. On the trade front, Brussels and Washington today released a long-awaited joint statement on a trade deal they brokered nearly a month ago, confirming that automobiles, semiconductors, and pharmaceuticals would be subject to no more than 15% tariffs upon import to the US.

WTI crude oil prices rose by 1.3% to $63.5 per barrel on Thursday, supported by signs of high US demand and uncertainty regarding efforts to end the war in Ukraine. A sharp 6 million-barrel reduction in US crude oil inventories, significantly exceeding expectations, also boosted sentiment, although an increase in Cushing stockpiles suggests that underlying demand may be less robust. Geopolitical tensions escalated, with Russia warning that peace efforts without Moscow’s participation are futile and the US announcing new tariffs on Indian goods in response to Delhi’s heavy reliance on Russian oil imports.

Asian markets also traded without any clear trend yesterday. Japan’s Nikkei 225 (JP225) fell by 0.65%, China’s FTSE China A50 (CHA50) rose by 0.51%, Hong Kong’s Hang Seng (HK50) fell by 0.24%, and Australia’s ASX 200 (AU200) showed a positive result of 1.13%.

Japan’s Ministry of Finance is preparing to raise the assumed interest rate on long-term government bonds to 2.6% in its budget requests for the 2026/27 fiscal year, which would be the highest level in 17 years. The previously assumed bond interest rate was set at 2.1% at the budget request stage for fiscal year 2025, and was later revised down to 2.0% in the final budget. The planned rate increase will lead to higher debt servicing costs. According to Kyodo News, the finance ministry will allocate about 30 trillion yen (approximately $202 billion) for debt service in its 2026/27 fiscal year budget request. This will be a record high, driven by rising long-term interest rates, the report said.

Malaysia’s annual inflation rate in July 2025 rose to 1.2% from a 4-year low of 1.1% in June, matching market expectations. Core inflation, which excludes volatile prices for fresh food and administrative services, has held at 1.8% y/y for the third consecutive month, remaining at its highest level since November 2023. On a monthly basis, consumer prices rose by 0.1%, matching the increase from the previous three months.