InvestMacro

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.

The Dow Jones Industrial Average (US30) rose by 0.04% on Wednesday. The S&P 500 (US500) fell by 0.24%. The Nasdaq (US100) closed down 0.67%. In the July FOMC meeting minutes, almost all officials supported keeping the rate at the current 4.25–4.50%, with only Michelle Bowman and Christopher Waller speaking in favor of a quarter-point rate cut to protect the weakening labor market. Their concerns were heightened after data from the Department of Labor showed lower-than-expected July employment figures, a higher unemployment rate, and a sharp downward revision of previous job gain numbers, which prompted Trump to fire the head of the Bureau of Labor Statistics. Markets believe there is an 85% probability of a September rate cut, with a speech from Powell at Jackson Hole on Friday expected to clarify his position.

European stock markets were mostly down yesterday. Germany’s DAX (DE40) fell by 0.60%, France’s CAC 40 (FR40) closed down 0.08%, Spain’s IBEX35 (ES35) fell by 0.08%, and the UK’s FTSE 100 (UK100) closed up 1.08%. The Eurozone’s annual inflation rate in July 2025 remained unchanged from the previous month at 2%, matching the flash estimate and staying slightly above the market’s initial expectation of 1.9%. This is the second consecutive month that inflation has matched the European Central Bank’s official target. The rise in service prices slowed (3.2% vs 3.3% in June), hitting a three-year low since May and offsetting acceleration in most other areas of the bloc’s consumer basket. Meanwhile, core inflation, which excludes energy, food, alcohol, and tobacco, remained unchanged at 2.3%, the lowest level since January 2022.

In August 2025, the Swedish Riksbank kept its policy rate at 2% as expected, as inflation rose more than anticipated. The growth of real wages, previous rate cuts, and an increase in business confidence are creating some conditions for economic recovery, albeit at a slow pace. Given these conditions, the Central Bank decided to leave rates unchanged, maintaining its June assessment that the outlook is broadly unchanged and leaving the door open for further rate cuts this year if inflation subsides and economic weakness persists.

WTI crude oil prices rose by 1.4% to $63.2 per barrel on Wednesday after a weekly report from the Energy Information Administration showed a 6 million-barrel decrease in US crude inventories, providing moderate support for prices. Despite the overall decline, inventories in Cushing, Oklahoma, rose for the seventh consecutive week to 23.5 million barrels, reflecting a sharp increase in supplies from the Permian Basin. Analysts noted that while the inventory decline is a “bullish” factor in the short term, the long-term outlook remains “bearish” due to an anticipated increase in OPEC+ supply and demand concerns. Futures have fallen more than 10% this year, reflecting ongoing market uncertainty.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) fell by 1.51%, China’s FTSE China A50 (CHA50) rose by 1.03%, Hong Kong’s Hang Seng (HK50) rose by 0.17%, and Australia’s ASX 200 (AU200) showed a positive result of 0.25%.

On Thursday, the Australian dollar fell to $0.642, marking its fourth consecutive session of decline and remaining at its lowest level in three weeks following the release of the latest economic data. Australia’s private sector grew at its fastest pace since April 2022, with the composite PMI rising to 54.9 in August, driven by strong expansion in services (55.1 vs 54.1 in July) and manufacturing (52.9 vs 51.3), fueled by a significant increase in new orders and an expanding client base. Meanwhile, consumer inflation expectations fell for the second consecutive month, decreasing to 3.9% in August 2025 from 4.7% in July, the lowest level since March.

The Bank of Indonesia unexpectedly cut its key interest rate by 25 bps to 5.0% at its August 2025 policy meeting, following a 25 bps cut in the previous month and contrary to market expectations of leaving rates unchanged. This was the fifth rate cut since last September, bringing the key rate to its lowest level since October 2022. The decision reflects projections that inflation in 2025–2026 will remain within the Central Bank’s target range of 2.5 plus-minus 1%, a stable rupiah exchange rate, and ongoing efforts to support economic growth. The latest data showed that Q2 GDP grew by 5.12% y/y, the highest figure in the last two years. Meanwhile, annual inflation rose to 2.37% in July from 1.87% in June, a yearly high, but still within the Central Bank’s target range.

The Dow Jones Industrial Average (US30) finished Tuesday up 0.02%. The S&P 500 (US500) fell 0.59%, and the tech-heavy Nasdaq (US100) closed down 1.39%, hitting its lowest level in over two weeks amid a sharp drop in chipmakers. US stocks largely closed lower as losses in major tech companies weighed on the market. Nvidia fell by 3.5%, AMD was down 5.4%, Broadcom dropped 3.6%, and Palantir was the weakest performer in the S&P 500, plunging 9.3%. Intel bucked the trend, rising 7% after SoftBank announced a $2 billion investment, which fueled optimism about its turnaround. Investors are now focused on the Federal Reserve’s Jackson Hole Symposium, where Chair Jerome Powell’s speech on Friday could provide insight into the September policy meeting and the possibility of rate cuts.

The Canadian dollar weakened to 1.38 per US dollar, nearing its two-month low of 1.386 from July 31, as investors digested the latest inflation data. Headline inflation slowed to 1.7% in July, largely driven by lower gasoline prices, but the Bank of Canada’s core measures remained near the top of its target range. The trimmed mean measure, in particular, was stuck at 3.0% in July against expectations of 3.1%, which pushed the market toward a more dovish stance from the Central Bank. This was compounded by an unexpected loss of 41,000 jobs in July, far worse than the 13,500 analysts had projected, and an unchanged unemployment rate of 6.9%.

Bitcoin (BTC/USD) is trading around $113,000, holding most of its losses after a sharp sell-off that sent it to a six-week low. The decline reflects the correlation between digital assets and tech stocks, as investors moved away from growth-oriented assets ahead of the Fed’s Jackson Hole Symposium. The sell-off was further intensified by reports that the Securities and Exchange Commission is investigating potential stock fraud and manipulation at Alt5 Sigma, which fueled broader risk-off sentiment in speculative markets.

European stock markets gained yesterday. Germany’s DAX (DE40) rose by 0.45%, France’s CAC 40 (FR40) closed up 1.21%, Spain’s IBEX35 (ES35) gained 0.34%, and the UK’s FTSE 100 (UK100) closed positive 0.34%. On Tuesday, European equities closed sharply higher, reaching their highest level since March, on optimism about steps taken to end the war between Russia and Ukraine. On Monday, European leaders met with US and Ukrainian Presidents Trump and Zelenskyy in Washington and announced they would provide security guarantees to Ukraine if it began to end the war.

The US natural gas prices (XNG/USD) fell below $2.80 per MBtu, their lowest level since November 2024, pressured by near-record production and high storage levels. The average production in the Lower 48 states was 108.1 billion cubic feet per day in August, up from the record 107.9 billion cubic feet per day in July. The latest EIA data showed that storage inventories grew by 56 billion cubic feet for the week ending August 8, well above seasonal norms.

Asian markets were mostly lower yesterday. Japan’s Nikkei 225 (JP225) fell by 0.38%, China’s FTSE China A50 (CHA50) declined 0.28%, Hong Kong’s Hang Seng (HK50) dropped 0.21%, and Australia’s ASX 200 (AU200) ended the day down 0.70%.

The New Zealand dollar fell by more than 1% to $0.582 on Wednesday, reaching its lowest level since mid-April, after the Reserve Bank, as expected, cut interest rates and signaled that further easing was possible. The Central Bank lowered the Official Cash Rate by 25 basis points to a three-year low of 3%, bringing its easing cycle to 250 basis points, as policymakers sought to revive a struggling economy and protect it from risks related to US tariff policy. Following the announcement, markets quickly priced in two more rate cuts by the end of the year, setting a 50% probability for such a move in October and more than a 100% chance in November.

On Monday, the Dow Jones (US30) fell by 0.08%, and the S&P 500 (US500) dropped by 0.01%. The technology-focused Nasdaq (US100) closed slightly higher, up 0.01%. US equities showed mixed performance amid growing geopolitical concerns. European leaders and the President of Ukraine met with US President Trump in Washington to discuss potential terms for ending the Russian-Ukrainian war. The outcome could have significant macroeconomic consequences for tariffs and oil prices, and it could also profoundly affect European security.

European stock markets saw mixed movement on Monday. Germany’s DAX (DE40) declined by 0.18%, France’s CAC 40 (FR 40) was down by 0.50%, Spain’s IBEX35 (ES35) fell by 0.17%, and the UK’s FTSE 100 (UK100) closed up 0.21%.

European equities closed slightly lower overall as markets avoided risky assets in anticipation of a week of events that could shift the geopolitical landscape and the global rate outlook. Federal Reserve Chair Jerome Powell may offer guidance on the interest rate outlook at the Jackson Hole symposium, as softer labor market data has strengthened the position of dissenting voices within the FOMC. Meanwhile, Ukrainian President Zelenskyy and European leaders were scheduled to meet with US President Trump in Washington to discuss a potential peace agreement.

WTI crude oil prices rose by 1% to reach $63.4 a barrel on Monday following the Washington talks between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy, which took place after an inconclusive US-Russia summit in Alaska last Friday. Investors are closely monitoring the potential impact of the talks on global oil supply, including possible changes in sanctions or moves toward reconciliation. Concerns over energy flows were reignited after White House advisor Peter Navarro criticized India’s purchases of Russian oil.

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by 0.77%, China’s FTSE China A50 (CHA50) climbed 0.50%, Hong Kong’s Hang Seng (HK50) fell by 0.37%, and Australia’s ASX 200 (AU200) closed with a positive result of 0.23%.

On Tuesday, the New Zealand dollar fluctuated around the $0.593 mark, staying in a narrow range as traders awaited the RBNZ’s rate decision. Markets have already priced in a potential 25 basis point rate cut to 3%, which would extend the current easing cycle to 250 basis points. Supporting a further easing is a 0.6% quarter-over-quarter rise in producer prices in Q2, which fell short of the 1% growth expected and was down from a 2.1% increase in Q1. Analysts, however, note that policy settings are close to neutral, and the effects of previous cuts are still working their way through the economy.

The offshore yuan held near 7.19 per dollar on Tuesday, trading within a tight range as the market’s focus shifted to the US Federal Reserve’s Jackson Hole symposium later this week for clues on policy direction and potential impacts on global currencies. Markets were watching the dollar amid expectations of a Fed pivot, with the probability of a 25 basis point rate cut in September now at 84%, down from 98% last week following stronger US wholesale and retail trade data, which tempered hopes for a more significant move. In China, markets are now awaiting this week’s loan prime rate decision, with expectations leaning toward the rate remaining unchanged.

The Westpac-Melbourne Institute Australian Consumer Sentiment Index rose by 5.7% in August 2025 to 98.5, its highest level since February 2022. Sentiment was boosted by the Reserve Bank’s 75 basis point rate cut since January and a more optimistic policy tone. The head of Australian macro expectations said that a long period of consumer pessimism may be ending, though additional easing might be needed to maintain momentum. However, he noted that policymakers are not in urgent need of further cuts.