InvestMacro

The US indices fell for a third consecutive session on Thursday as investors weighed strong economic data against expectations for future Federal Reserve rate cuts. The Dow Jones (US30) dropped by 0.38%, the S&P 500 (US500) declined by 0.50%, and the tech-heavy Nasdaq (US100) closed 0.50% lower. Data showed the labor market remains resilient, with initial jobless claims falling to 218,000 for the week ending September 20. Furthermore, Q2 GDP growth was revised higher to an annual rate of 3.8%, supported by robust consumer spending and business investment. Market participants are now repricing the Fed’s next moves, with investor bets on an additional 25 basis point (bp) rate cut in October falling sharply. Technology stocks were hit the hardest, with Oracle tumbling 5% and Tesla dropping 4%. Meanwhile, Intel jumped 9% on news it approached Apple with an investment proposal. Investors are now awaiting Friday’s release of the Fed’s preferred inflation gauge, the PCE Index, for clues on the Central Bank’s path.

Mexico’s Central Bank, Banxico, cut its benchmark interest rate by 25 basis points to 7.5% on Thursday. In its statement, the Central Bank noted that global economic activity expanded at a slower pace in the third quarter of 2025 compared to the previous quarter. The bank pointed to persistent trade tensions, which are expected to cause an economic slowdown both globally and in the United States this year and in 2026. The Central Bank still projects headline inflation to reach its 3% target by the third quarter of 2026.

European equity markets declined yesterday. Germany’s DAX (DE40) fell by 0.56%, France’s CAC 40 (FR40) closed down 0.41%, Spain’s IBEX35 (ES35) dropped 0.27%, and the UK’s FTSE 100 (UK100) closed 0.39% lower. The GfK Consumer Climate Index in Germany surprisingly improved slightly for October, though it remained in negative territory. Shares of German company Siemens Healthineers fell approximately 3.5% after the US Administration announced a new national security investigation into imports of robotics, medical devices, and industrial machinery. The European Commission plans to impose tariffs of 25% to 50% on Chinese steel and related products in the coming weeks to protect domestic producers, as the global overcapacity continues to pressure profits and constrain investment in the decarbonization of the European steel industry. Analysts expect China’s steel exports to reach a record high this year, increasing by 4-9% to an estimated 115-120 million tonnes.

The US natural gas prices (XNG/USD) surged over 3% to $2.94 per million British thermal units (mmBTU), reaching a one-week high and continuing a three-session rally. The EIA reported a storage build of 75 billion cubic feet (bcf) for the week ending September 19, which matched expectations. Meanwhile, projections point to warmer-than-normal weather in early October. Feedgas flows to LNG facilities averaged 15.7 bcf/d in September, a slight reduction from August.

Silver (XAG/USD) climbed above $45 per ounce on Thursday, hitting a new 14-year high. Increased industrial demand and tight physical supply outweighed stronger-than-expected US macroeconomic data, which typically pushes up yields and the dollar. On the demand side, greater shipments of photovoltaic panels and electronics, where silver is difficult to substitute, are supporting near-term consumption. Regarding supply, most silver is produced as a byproduct of base metal mining and cannot be quickly ramped up; recent disruptions at smelting and processing facilities in key refining hubs have reduced refining availability, lowered delivery promptness, and increased near-term metal premiums.

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by .27%, China’s FTSE China A50 (CHA50) gained 0.59%, while the Australian ASX 200 (AU200) finished 0.09% higher. Hong Kong’s Hang Seng (HK50) fell by 0.13%. Weak economic data in New Zealand prompted traders to price in greater policy easing by the Reserve Bank of New Zealand (RBNZ). Markets are now fully pricing in a 25 bp rate cut to 2.75% in October, with a 30% probability of a larger 50 bp cut. The ANZ-Roy Morgan survey, meanwhile, showed that New Zealand consumer confidence improved in September, suggesting that earlier rate cuts are starting to take effect. The New Zealand dollar lost over 1% for the week, marking its second consecutive weekly decline.

The offshore Yuan stabilized at 7.14 per dollar on Friday but still showed a significant weekly drop amid a strengthening US dollar. The dollar continued to gain as traders revised expectations for aggressive Fed rate cuts following a series of better-than-expected economic releases. Adding further pressure on the Yuan was President Donald Trump’s announcement of a new round of punitive tariffs. Effective October 1, a 100% tariff will be placed on branded and proprietary pharmaceutical imports, except for companies that establish manufacturing capacity in the US.

The US stocks declined for a second consecutive day on Wednesday. The Dow Jones (US30) dropped 0.37%, the S&P 500 (US500) was down 0.28%, and the tech-heavy Nasdaq (US100) fell by 0.31%. Individual stocks also saw mixed results. Nvidia dropped almost 1% despite announcing a $100 billion partnership with OpenAI. Oracle fell by 1.7%, and Micron Technology was down 2.9% even after reporting better-than-expected earnings. Conversely, Alibaba’s pledge to increase AI spending beyond its initial $50 billion commitment lifted its US-listed shares by 8.2%. Broader market sentiment was weighed down by overvaluation concerns after Federal Reserve Chair Jerome Powell reiterated that inflation and labor market risks persist and warned that stock prices remain overvalued. On the economic front, new home sales unexpectedly rose in August, a bright spot amid fears of slowing growth and seasonal market weakness.

The Canadian dollar (CAD) fell to a four-month low, breaking the 1.39 mark against the US dollar. This was driven by weaker domestic data and a strengthening US dollar. Markets are repricing a more aggressive easing path for the Bank of Canada (BoC) after the Central Bank cut its policy rate and signaled the possibility of further easing, which reduced the appeal of CAD fixed-income assets. At the same time, the headline Consumer Price Index (CPI) for August was 1.9%, with core measures largely holding steady, giving the BoC room to ease and lowering the incentive for foreign capital to remain in the country.

European stock markets were mixed yesterday. Germany’s DAX (DE40) rose by 0.23%, France’s CAC 40 (FR40) closed down 0.57%, Spain’s IBEX35 (ES35) gained 0.24%, and the UK’s FTSE 100 (UK100) closed down 0.04%. The DAX in Frankfurt saw a slight gain for the second day, primarily supported by defense stocks following comments from Donald Trump about Ukraine. Trump signaled a major policy shift on Tuesday, suggesting that Ukraine could retake all its territory from Russia. In other news, German business sentiment in September unexpectedly dropped sharply from August, according to IFO data. On the corporate front, defense companies like Renk (+7%), Hensoldt (+6.7%), and Rheinmetall (+3.5%) were notable standouts. Other top performers included Commerzbank (+4.4%), Zalando (+2.7%), and Siemens Energy (+2.3%).

WTI crude oil prices rose over 2% to the $65 per barrel mark on Wednesday, extending a 1.8% gain from the previous session. This was fueled by a drop in US crude inventories, which intensified supply concerns. Data from the EIA showed that US crude oil inventories fell by 0.607 million barrels, defying market expectations for a build. This came after talks to resume oil exports from Iraqi Kurdistan stalled as two major producers demanded debt repayment guarantees, keeping pipeline flows to Turkey halted. Geopolitical risks also continued to support prices, as NATO pledged a “resolute” response to Russia’s airspace incursions and Ukrainian drone attacks on Russian oil refineries and pipelines.

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by 0.30%, China’s FTSE China A50 (CHA50) gained 0.47%, Hong Kong’s Hang Seng (HK50) was up 1.37%, while Australia’s ASX 200 (AU200) finished the day down 0.92%.

Sentiment improved after reports that China is developing new regulations to boost competition in the food delivery sector, including capping service fees for restaurants, increasing subsidy transparency, and limiting platform fees. Alibaba rose nearly 10% after pledging over $53 billion in AI investments, surpassing its previous target, and releasing a new model. However, further gains were capped by concerns over Typhoon Ragasa, the world’s most powerful cyclone this year. Cathay Pacific announced it would cancel more than 500 regional flights, reposition aircraft, and gradually resume operations from Thursday into Friday.

The Australian dollar (AUD) rose to $0.659 on Thursday, recovering some of its losses from the previous session, as reduced bets on domestic policy easing outweighed a strengthening US dollar. Investors scaled back expectations for a near-term rate cut from the Reserve Bank of Australia (RBA) after recent data showed Australia’s monthly CPI grew by 3.0% in August, the fastest pace in a year and slightly above expectations of 2.9%. Markets are now pricing in just a 6.5% chance of a 0.25% rate cut at the RBA’s meeting next week, and a 38.2% chance of a cut at the following meeting in November.

Wall Street extended its record-breaking streak on Monday, fueled by optimism in megacap companies. The Dow Jones (US30) gained 0.14%, the S&P 500 (US500) rose 0.44%, and the Nasdaq (US100) was up 0.55%. Nvidia shares surged 4% after announcing an investment of up to $100 billion in OpenAI, while Oracle jumped 6.3% following a leadership change and continued enthusiasm for AI. Apple shares increased by 4.3% on strong demand for the iPhone 17, and Tesla climbed 1.9%, reaching its 2025 high as investors anticipated new product launches and enhancements to its self-driving system.

The US President Donald Trump is set to announce this week that the deal to sell TikTok’s US operations to its Chinese parent company, ByteDance, complies with the 2024 law. Under the plan, ByteDance will hold less than a 20% stake, and TikTok US will be controlled by a group of existing American and international companies, as well as new investors not affiliated with ByteDance. Key investors include Oracle and Silver Lake, with Trump specifically highlighting US backers like Lachlan Murdoch, Larry Ellison, and Michael Dell. Trump will sign an executive order confirming the legality of the deal, which mandates storing US user data in Oracle’s cloud infrastructure.

European stock markets were mostly down on Monday. Germany’s DAX (DE40) fell by 0.48%, France’s CAC 40 (FR40) closed 0.30% lower, Spain’s IBEX35 (ES35) declined 1.17%, while the UK’s FTSE 100 (UK100) had closed 0.11% higher. Carmakers faced losses after Porsche lowered its profit outlook for the year and delayed an EV launch due to weak demand, causing its shares to fall 7.2%. Volkswagen shares, a major Porsche shareholder, dropped 7.1%, and Stellantis fell more than 2%. Meanwhile, BBVA underperformed tech stocks, dropping 2.7% after raising its offer to acquire Banco Sabadell by 10% to €17 billion.

WTI crude oil prices were trading around $62 a barrel as traders weighed geopolitical risks against concerns over tariffs and slowing demand. Over the weekend, reports of Russian airstrikes on western Ukraine near the Polish border, airspace violations in Estonia, and a Russian military plane entering neutral Baltic airspace heightened fears of further regional escalation. Adding to the tension, the EU introduced its 19th package of sanctions against Russia on Friday, including a ban on LNG imports and restrictions on 118 additional shadow vessels. In the Middle East, geopolitical uncertainty also remained a focus as several countries officially recognized the state of Palestine ahead of a UN summit.

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by 0.99%, China’s FTSE China A50 (CHA50) gained 0.45%, Hong Kong’s Hang Seng (HK50) fell by 0.76%, and Australia’s ASX 200 (AU200) closed 0.43% higher.

On Tuesday, the Australian dollar weakened to above the $0.658 level, giving up gains from the previous session as investors digested disappointing PMI data. Preliminary estimates showed the composite PMI fell to 52.1 in September from 55.5 in August. Market attention is now focused on the monthly CPI Index, due on Wednesday, which will clarify whether the inflation spike in July was caused by the end of electricity subsidies or broader price pressures. If inflation remains high or accelerates, expectations for an RBA rate cut could be pushed into next year.

Malaysia’s annual inflation rate rose to 1.3% in August 2025 from 1.2% in the previous month, its highest reading since April and in line with market expectations. Food prices increased 2.0% year-over-year, slightly above the ten-month low of 1.9% in July. On a monthly basis, consumer prices rose 0.1%, matching the gain from the previous four months.

Singapore’s annual inflation rate eased to 0.5% in August 2025, below market expectations and the 0.6% recorded in the previous month. The latest figure marked the lowest inflation level since January 2021. On a monthly basis, consumer prices rose 0.5% in August. Meanwhile, annual core inflation declined to 0.3% in August, the lowest since February 2021, compared to market prognoses of 0.4% and the July figure of 0.5%.