InvestMacro

By the end of Thursday, the Dow Jones Index (US30) rose by 0.27%. The S&P500 Index (US500) gained 0.48%. The Nasdaq (US100) technology Index closed higher by 0.94%. All three major Wall Street indices closed at record highs on Thursday. Investors welcomed the Fed’s quarter-point rate cut and the prospect of two additional reductions, interpreting the move as a shift toward supporting growth rather than strictly controlling inflation. Technology stocks led the rally, with Intel shares soaring more than 22% after Nvidia announced a $5 billion investment in a joint chip development, and Nvidia shares gained 3.5%. Economically, initial jobless claims fell sharply to 231,000 from a four-year high, easing some concerns about labor market weakness.

The Mexican peso fell to 18.35 per US dollar, retreating from its strongest level since July 2024 at 18.29. In Mexico, headline inflation in August was 3.57% and core inflation was around 4.23%, which is relatively subdued but still keeps Banxico cautious, limiting aggressive rate cuts. Meanwhile, growth forecasts have softened, industrial production has shown a contraction, and the outlook for private spending has cooled, which reduces demand for peso-denominated assets.

European stock markets were mostly higher on Thursday. The German DAX (DE40) rose by 1.35%, the French CAC 40 (FR 40) closed up 0.87%, the Spanish IBEX35 (ES35) gained 0.32%, and the British FTSE 100 (UK100) closed positively on Thursday at 0.21%. The Bank of England voted 7-2 to keep the Bank Rate unchanged at 4%, with two members voting for a 25-basis-point cut to 3.75%. The MPC also voted 7-2 to slow quantitative tightening, reducing gold holdings by £70 billion over the next year to £488 billion. Policymakers noted progress in disinflation after past shocks, supported by a restrictive policy, although inflation remains above the target. The CPI was 3.8% in August, and is expected to rise slightly in September before returning to the 2% level. Looking ahead, the committee emphasized the need for a gradual, data-driven approach without a predetermined path for rate cuts, maintaining flexibility to respond to future developments.

In September 2025, Norges Bank reduced its key rate by 25 basis points to 4.0%, aligning with market expectations, and indicated that it would continue to lower rates next year if the economy develops as anticipated. This was the second rate cut in the last five years, following a brief pause in August. The bank’s committee noted that the current policy is restrictive, helping to cool the economy and reduce inflation.

US natural gas prices fell by more than 3% to below $2.99/MMBtu after the EIA reported a larger-than-expected increase in storage inventories. In the week leading up to September 12, companies injected 90 billion cubic feet of gas into storage, exceeding forecasts of 81 billion cubic feet, compared to 56 billion cubic feet a year earlier and a five-year average of 74 billion cubic feet.

Asian markets were mostly lower yesterday. The Japanese Nikkei 225 (JP225) rose by 1.15%, the Chinese FTSE China A50 (CHA50) fell by 1.44%, the Hong Kong Hang Seng (HK50) declined by 1.35%, and the Australian ASX 200 (AU200) showed a negative result of 0.83% yesterday.

In September 2025, the Bank of Japan left its key short-term rate unchanged at 0.5%, keeping borrowing costs at their highest level since 2008 and meeting market expectations. The decision, made by a 7-2 vote, came amid uncertainty about Japan’s political outlook and the impact of US tariffs. It followed the US Fed’s rate cut earlier this week: the first since December. During Friday’s meeting, the Bank of Japan announced that it would begin selling its holdings in exchange-traded funds (ETFs) and real estate investment trusts (REITs). The board noted that the Japanese economy has recovered at a moderate pace despite some weaknesses. Private consumption remained robust due to improved employment and income conditions. Inflation expectations rose moderately, with the core CPI projected to increase gradually.

The New Zealand dollar fluctuated around $0.598 on Friday after falling more than 1% in the previous session to a nearly two-week low. The drop was fueled by a sharper-than-expected economic downturn, which increased bets on further rate cuts by the Reserve Bank. GDP fell by 0.9% in the June quarter, which was worse than the forecasted 0.3% decline. This followed a revised growth of 0.9% in the previous quarter. The contraction was primarily due to weakness in the construction and manufacturing sectors, as well as a decline in exports. Markets are now fully pricing in a 25-basis-point rate cut in October, with the probability of a more significant 50-basis-point reduction estimated at around 25%. They also anticipate an additional 71 basis points of easing, up from 50 basis points previously. Additionally, data released today indicated that New Zealand’s trade deficit narrowed to NZ$1.2 billion in August, compared to NZ$2.3 billion in the same month last year. However, it still exceeded market expectations of NZ$0.7 billion.

By the end of Wednesday, the Dow Jones Index (US30) rose by 0.57%. The S&P 500 Index (US500) declined by 0.10%. The Nasdaq (US100) Technology Index closed lower by 0.33%. US stocks closed mixed as investors weighed the Federal Reserve’s outlook following an expected 25-basis-point rate cut. The median FOMC prognosis suggests two more rate cuts this year, but strong growth, a low unemployment rate, and an upward revision of core inflation have raised doubts about the pace of easing in 2026. Chairman Powell also showed caution, refraining from expressing confidence in further rate cuts. The Fed expects to cut rates by another 50 basis points by the end of 2025 and by a quarter-point in 2026, which is slightly more than anticipated in June. GDP growth expectations were revised upward for 2025 (1.6% vs 1.4% in the Jun prognosis), 2026 (1.8% vs 1.6%), and 2027 (1.9% vs 1.8%). PCE inflation this year is projected at 3%, the same as in June, but expectations for 2026 were revised upward (2.6% vs 2.4%). The core PCE inflation expectations also remained at 3.1% for 2025 but were revised upward for 2026 to 2.6% from 2.4%. The unemployment rate is still expected to be 4.5% for 2025, but the projections for next year were revised downward to 4.4% from 4.5%. Meanwhile, technology stocks were under pressure, with shares of Avidia and Broadcom falling by 2.5% and 3.5% amid reports of Chinese restrictions on Nvidia chip purchases.

The Canadian dollar fell to 1.375 per US dollar after the Bank of Canada lowered its policy rate by 25 basis points to 2.5% and signaled that the easing campaign would continue. The move reflected a sharper-than-expected slowdown in activity, including a 1.6% contraction in Q2 GDP and a 27% drop in exports. The deteriorating labor market situation strengthened the case for policy easing: in August, net job losses and the unemployment rate rose to 7.1%, which reduced wage pressures and took the edge off inflation.

European stock markets were mostly lower on Wednesday. The German DAX (DE40) rose by 0.13%, the French CAC 40 (FR40) closed down 0.40%, the Spanish IBEX35 (ES35) declined by 0.24%, and the British FTSE 100 (UK100) closed positively at 0.14%. The Eurozone’s consumer price inflation for August 2025 was revised downward to 2.0% from a preliminary 2.1%, which is in line with the ECB’s target. Top gainers included Continental (+1.9%), Adidas (+1.7%), Bayer (+1.6%), and Infineon Technologies (+1.3%). In contrast, Commerzbank and Siemens Energy suffered the biggest losses, falling by 2.8% and 2.2%, respectively.

WTI crude oil prices fell to $64 per barrel on Wednesday. European officials reported plans to accelerate the reduction of Russian fossil fuel imports and called for more decisive measures to increase economic pressure on Moscow. Additionally, EIA data showed that US crude oil inventories fell by 9.3 million barrels last week, the largest drop in three months.

Asian markets traded mixed yesterday. The Japanese Nikkei 225 (JP225) fell by 0.25%, the Chinese FTSE China A50 (CHA50) rose by 0.63%, the Hong Kong Hang Seng (HK50) gained 1.78%, and the Australian ASX 200 (AU200) showed a negative result of 0.67%.

The Hong Kong Monetary Authority, following the US Fed, lowered borrowing costs to 4.5%, the lowest since November 2022. Chief Executive Eddie Yue stated that the move should support the real estate market and the broader economy.

The Bank of Indonesia unexpectedly cut its key interest rate by 25 basis points to 4.75% at its September 2025 policy meeting. Since last September, the Central Bank has lowered rates by 150 basis points, bringing the key rate to its lowest level since October 2022. Recent data showed that in Q2, GDP grew by 5.12% y/y, the fastest pace in two years, and annual inflation in August fell to 2.31%. Earlier this week, the government unveiled a stimulus package worth around $1 billion for Q4 to accelerate GDP growth.

The Australian dollar traded around $0.665 on Thursday. Data showed that net employment in August fell by 5,400 against projections of a 21,500 increase, driven by a sharp reduction of 40,900 full-time jobs. The unemployment rate remained stable at 4.2%. Despite the weak data, markets imply only a 20% chance of a rate cut by the Reserve Bank of Australia at its September 30 meeting, with expectations for November rising to 70% as inflation remains above target and policymakers show caution.

The New Zealand dollar fell to $0.592 after weaker-than-expected GDP data spurred bets on interest rate cuts. New Zealand’s economy contracted by 0.9%, worse than the expected contraction of 0.3%. Markets are now fully pricing in a quarter-point rate cut to 2.75% at the Reserve Bank’s October meeting, with a 24% chance of a more significant half-percent cut.

On Monday, the Dow Jones (US30) Index rose by 0.11%, the S&P 500 (US500) gained 0.47%, and the tech-heavy Nasdaq (US100) closed up 0.94%, setting an all-time high. The US stocks closed higher, driven by a surge in technology shares. Tesla jumped by 3.6% after CEO Elon Musk reported purchasing about $1 billion in stock, his largest open-market purchase ever, while Alphabet gained 4.3%, reaching a $3 trillion valuation and boosting the communication services sector. Nvidia ended the session flat, paring losses after a Chinese regulator stated the company had violated antitrust law, and Texas Instruments fell 2.4% on news of a Chinese anti-dumping investigation into US analog chipmakers. Trade tensions also persisted as President Donald Trump signaled progress in US-China talks, including a potential deal related to TikTok, though risks from tariffs and tech restrictions remain.

The Mexican peso strengthened to 18.4 per US dollar, its strongest level since July 2024, as the US dollar weakened and Mexico’s macroeconomic indicators remained stable, increasing the attractiveness of peso-denominated assets. Banco de México is maintaining a tight policy and signaling careful calibration even amid moderate inflation. Higher real interest rate differentials compared to peer countries, sustained demand for forward markets, and Mexico’s strong trade ties with the US support demand for local securities, limiting capital outflows.

European stock markets were mostly up on Monday. The German DAX (DE40) rose by 0.21%, the French CAC 40 (FR40) closed up 0.92%, the Spanish IBEX35 (ES35) gained 0.57%, and the British FTSE 100 (UK100) closed down 0.07%. The DAX Index in Frankfurt experienced some volatility. Investors are awaiting decisions from major central banks, including the US Federal Reserve, the Bank of England, the Bank of Japan, and the Bank of Canada. The US Central Bank is widely expected to cut rates by at least 25 basis points. Meanwhile, attention remains on France, as Fitch downgraded its credit rating, citing rising public debt and increasing political polarization, which raises concerns about the size of the upcoming budget deficit.

WTI crude oil prices rose nearly 1% to $63.3 per barrel on Monday, extending last week’s gains as traders weighed escalating Ukrainian drone attacks on Russian energy facilities against expectations of an impending supply surplus. Ukraine launched a major strike with over 360 drones, briefly causing a fire at the 355,000 bpd Kirishi oil refinery, just days after an attack on the Primorsk export terminal, which handles around 1 million bpd. Pressure on Moscow intensified after US President Donald Trump reaffirmed his willingness to impose massive sanctions on Russian oil if NATO allies cease their purchases, which could alter global energy flows.

On Tuesday, silver (XAG/USD) stabilized at around $42.5 per ounce, trading near its 14-year high as investors prepared for an expected US Federal Reserve rate cut this week. Markets are almost fully pricing in a 25 basis point cut on Wednesday, with 67 basis points of cuts projected by the end of the year. President Donald Trump also pressured Fed Chair Jerome Powell for a more significant cut, citing weakness in the housing market. Elsewhere, the central banks of Canada and China are expected to ease policy this week, while the central banks of Japan and the UK are likely to hold theirs unchanged. On the geopolitical front, US-China trade talks in Spain showed progress, and talks between Trump and Chinese President Xi Jinping are scheduled for Friday. Meanwhile, industrial demand from solar energy, electric vehicles, and electronics continues to intensify pressure on the physical silver market, while supply constraints support prices.

Asian markets had a strong day. The Japanese Nikkei 225 (JP225) rose by 0.89%, China’s FTSE China A50 (CHA50) climbed 0.46%, Hong Kong’s Hang Seng (HK50) gained 0.22%, and the Australian ASX 200 (AU200) posted a negative result of 0.13%.

The Bank of Thailand and the Ministry of Finance are considering introducing a tax on online gold trading in baht. Officials state the measure will limit gold exports and make holding it in the country more expensive, as the influx of dollars from gold shipments has strengthened the currency. Bank of Thailand representatives will meet with gold traders on Monday to discuss the metal’s impact and stricter reporting requirements.

The US stocks had a mixed close on Friday. The Dow Jones (US30) fell by 0.59% for the day (+0.89% for the week). The S&P 500 (US500) dropped 0.05% (+1.33% for the week), while the tech-heavy Nasdaq (US100) closed up 0.44% (+1.54% for the week). Investors interpreted weak employment data and low inflation as signs that the Federal Reserve would lower interest rates this week. The Nasdaq jumped, driven by a 7.4% surge in Tesla shares and a 1.7% gain in Microsoft after the company avoided a potential EU antitrust fine, lifting the broader tech sector.

European stock markets were mostly down on Friday. The German DAX (DE40) fell 0.02% (-0.31% for the week), the French CAC 40 (FR40) closed up 0.02% (+1.54% for the week), the Spanish IBEX35 (ES35) dropped 0.08% (+2.86% for the week), and the British FTSE 100 (UK100) closed down 0.15% on Friday (+0.82% for the week). European stocks closed slightly lower on Friday as markets continued to assess the global rate outlook and awaited France’s credit rating from Fitch. At the same time, pharmaceutical stocks across Europe fell after Goldman Sachs downgraded Novartis due to increasing competition from generic brands, causing the company’s shares to drop by 3%, while Roche, AstraZeneca, and GSK all declined by over 1%. On Thursday, the ECB signaled that its easing cycle was complete, with President Lagarde noting that the bank is now in a “good place” and that growth risks appear more balanced.

WTI crude oil prices rose more than 1.5% on Friday. Ukrainian strikes temporarily halted operations at Primorsk, Russia’s main oil-handling port in the Baltic, and hit three pumping stations that supply the Ust-Luga hub. Meanwhile, the US reportedly said it might force G7 allies to impose tariffs of up to 100% on Chinese and Indian purchases of Russian oil, and Canada convened a meeting of finance ministers to discuss additional measures. Further pressure comes from the International Energy Agency’s forecast of a record oil supply surplus next year, with OPEC+ planning to bring idle barrels back to the market in October, albeit at a slower pace.

Asian markets had a strong week. The Japanese Nikkei 225 (JP225) rose by 3.03%, China’s FTSE China A50 (CHA50) climbed 1.88%, Hong Kong’s Hang Seng (HK50) gained 3.73%, and the Australian ASX 200 (AU200) posted a positive result of 0.11% last week. Japanese stocks reached new record highs, following gains on Wall Street. In Japan, investors continued to assess the Bank of Japan’s policy direction amid mixed economic signals and political uncertainty. Prime Minister Shigeru Ishiba recently announced his resignation, facing increasing pressure after a defeat in last year’s elections and deepening divisions within the ruling party. The Hang Seng rose by about 4%, marking its second consecutive weekly gain, fueled by reports that Beijing may direct state-owned banks to help local governments cover unpaid bills. However, gains were capped by concerns that the US could restrict supplies of Chinese medicines and tighten oversight of licensing deals for experimental drugs. Hong Kong-listed Alibaba jumped 7%, and Baidu surged nearly +4% after both companies began using their self-developed chips to train AI models, reducing their reliance on Nvidia.

China’s economy continues to face numerous risks and challenges, as evidenced by weak August 2025 data amid intensifying global issues. Economic activity was also negatively impacted by extreme weather conditions: the hottest heatwave since 1961 and the longest rainy season during the same period. Industrial production grew by 5.2% year-on-year that month, missing forecasts of 5.8% and marking the slowest growth rate in a year, while retail sales increased by 3.4%, the weakest showing in eight months and below the consensus forecast of 3.8%. The unemployment rate rose to a six-month high of 5.3%, and real estate investment continued to contract, highlighting the sector’s prolonged downturn amid tightening regulations on speculation and debt.

The New Zealand dollar declined to $0.596 on Friday but remained near multi-month highs on a weak US dollar. The US dollar was under pressure as slightly higher US consumer inflation data and a sharp increase in jobless claims maintained expectations of Federal Reserve interest rate cuts next week and beyond. At the same time, on the domestic front, the Reserve Bank of New Zealand’s dovish forecasts continue to pressure the currency. RBNZ Governor Christian Hawkesby confirmed on Thursday the central bank’s forecast for another 50 basis points of cuts to the official cash rate by the end of the year, with the pace of easing to be determined by incoming data, particularly next week’s GDP report. Meanwhile, fresh data showed that New Zealand’s manufacturing sector contracted again in August, underscoring the economy’s fragile state.