InvestMacro

On Thursday, US stocks rose as investors evaluated fresh labor market data and increased bets on a Federal Reserve interest rate cut later this month. The Dow Jones (US30) climbed 0.77%, the S&P 500 (US500) gained 0.83%, and the Nasdaq (US100) was up 0.98%. New data showed that private sector jobs in August increased by only 54,000, which was significantly below expectations. Additionally, jobless claims rose to their highest level since June, signaling a cooling labor market. Traders interpreted this slowdown as a catalyst for a September rate cut, with federal fund futures pricing in a more than 95% chance of a reduction.

Corporate earnings also influenced market momentum. Amazon shares jumped 4.3% on optimism about the company’s AI connections, Meta added 1.6%, and Broadcom rose by 1.2% ahead of its results. However, Salesforce dropped 5.1% following a weak prognosis.

The Mexican peso (MXN) weakened to around 18.75 per US dollar, a two-week low, due to a stronger US dollar and weaker domestic flows. The outlook on Banxico’s (Mexico’s Central Bank) policy appears increasingly gradual. Unemployment rose to 2.8% in July from 2.7% in June, a moderate increase that is cooling consumption and strengthening the case for further monetary easing. The Central Bank started a moderate easing cycle by cutting its rate by 25 basis points to 7.75%, signaling a slow, data-dependent path for reductions, which lessens the appeal of interest-rate carry trades.

European stock markets were mostly higher on Thursday, with the German DAX (DE40) up 0.74%, the Spanish IBEX35 (ES35) gaining 0.87%, and the UK FTSE 100 (UK100) closing 0.42% higher. The French CAC 40 (FR40), however, closed down 0.27%. European equities closed with solid gains on a drop in long-term bond yields and easing concerns about rising borrowing costs.

WTI crude oil prices fell to $63.5 per barrel on Thursday, extending a 2.5% drop from the previous session. Supply concerns were heightened by an unexpected increase in US inventories. US commercial crude oil stocks rose by 2.4 million barrels in the week ending August 29, significantly exceeding expectations. This signals slowing current demand and inflated stockpiles, confirming data from the API (American Petroleum Institute). Meanwhile, OPEC+ is poised to increase production further, with talks underway for additional cuts to output and increased supply in October, which would exacerbate an already saturated market.

Asian markets were mostly down yesterday. The Japanese Nikkei 225 (JP225) rose by 1.53%, while the Chinese FTSE China A50 (CHA50) fell by 1.24%, and the Hong Kong Hang Seng (HK50) dropped 1.12%. The Australian ASX 200 (AU200) posted a positive result, up 1.00%.

Japan: According to an executive order signed by President Donald Trump on Thursday, the United States will cut tariffs on imported Japanese automobiles to 15% by the end of the month. This move formalizes a trade agreement between Washington and Tokyo announced in July, easing months of negotiations and reducing uncertainty for the Japanese automotive sector. The 15% cap will also apply to most other Japanese imports under the agreement. The deal also confirms Japan’s commitment to invest $550 billion in US projects. The tariff cuts will take effect seven days after the order is published, with some benefits retroactive to August 7.

Australia: Strong economic data this week led investors to lower expectations for further RBA (Reserve Bank of Australia) policy easing. Markets are now pricing in an 80% chance of a 0.25% rate cut in November, down from 100% at the start of the week. Economists note that rising household consumption and improving sentiment are supporting the Australian dollar, while robust consumer spending and a stable labor market could limit further rate cuts.

New Zealand: Expectations of further monetary policy easing by the RBNZ (Reserve Bank of New Zealand) continued to cap the New Zealand dollar’s rise. Markets are pricing in a rate cut at the Central Bank’s next meeting in October, with rates projected to fall to around 2.50% by early next year. The currency has been on the defensive since the RBNZ lowered its official cash rate to 3.0% last month and signaled that further cuts may be needed to stimulate a sluggish economy.

By the end of Wednesday, the Dow Jones Index (US30) fell by 0.05%. The S&P 500 Index (US500) gained 0.51%. The technology-heavy Nasdaq (US100) closed higher by 1.02%. Wall Street finished mixed on Wednesday as tech gains offset broader market weakness, with investors weighing a favorable antitrust ruling for Google and signs of a cooling labor market. Alphabet shares surged 9.1% after a court allowed the company to maintain Chrome and its lucrative search deal with Apple, easing fears of a forced breakup. Apple shares rose by 3.8%, helping to bolster confidence in the resilience of large technology companies despite regulatory pressures. In contrast, the Dow dropped 24 points as weakness in the financial and energy sectors countered tech-sector gains. On the data front, the JOLTS report showed job openings fell to their lowest level since September, and factory orders contracted by 1.3%.

European stock markets were mostly up on Wednesday. Germany’s DAX (DE40) was up 0.46%, France’s CAC 40 (FR40) closed with a gain of 0.86%, Spain’s IBEX35 (ES35) gained 0.58%, and the UK’s FTSE 100 (UK100) closed up 0.67%. The Eurozone’s HCOB Composite Business Activity Index rose to 51 in August 2025 from 50.9 the previous month, which was slightly below the preliminary estimate of 51.1 but beat initial market expectations of 50.7. The total volume of new orders increased for the first time in 15 months, despite a contraction in new export orders. The signal of renewed demand for production capacity led companies to increase staff to the highest level in 14 months. Meanwhile, input cost inflation accelerated to a five-month high, which subsequently led to a rise in output prices. Despite the stronger headline figures, overall business confidence remained unchanged during the period amid concerns about US tariffs and economic issues within the Eurozone.

WTI crude oil prices fell below $64 per barrel on Wednesday, retreating from a four-week high of $65.7 reached earlier in the session, on renewed signs of a supply increase. Reports indicate that the OPEC+ group is considering an increase in oil production at its meeting this coming weekend, surprising markets that had largely expected production levels to be maintained. Such a decision would extend the cartel’s series of production increases this year, despite expectations of slowing fuel demand, as major producers and exporters prioritize regaining market share and boosting their budget revenues from energy sales.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) fell by 0.88%, China’s FTSE China A50 (CHA50) declined 0.96%, Hong Kong’s Hang Seng (HK50) was down 0.60%, and Australia’s ASX 200 (AU200) showed a negative result of 1.82%. Hong Kong stocks dropped nearly 1.0% on Thursday morning, marking their third consecutive decline amid widespread losses in the sector. Sentiment became increasingly cautious as traders continued to assess financial difficulties in major economies. The Hang Seng Index also followed mainland Chinese stocks, which extended their slide for a third straight session after reports that regulators are preparing measures to cool down Chinese markets.

Bank of Japan Governor Kazuo Ueda stated on Wednesday that the Bank of Japan remains ready to continue raising interest rates if the economy and prices develop in line with expectations. His statement followed a meeting with Prime Minister Shigeru Ishiba, the first since February, as part of a regular exchange of views on the economy and markets. The Central Bank concluded a decade-long stimulus program last year and raised short-term rates to 0.5% in January, confident that Japan was approaching its 2% inflation target. However, political uncertainty could complicate the outlook, as Ishiba is under pressure and may resign after the LDP’s defeat in the upper house elections in July.

Indonesia’s Central Bank agreed to a “burden-sharing” arrangement with the government, under which it will raise interest rates on government deposits to help fund state programs. This arrangement is designed to support the government’s efforts to raise funds through the bond market for initiatives like building affordable housing and creating village-level cooperatives. Additionally, BI acquired IDR 200 trillion (US$12.3 billion) in government bonds on the secondary market, including IDR 150 trillion through a debt swap with the government.

Wall Street opened September on a negative note, with US stocks falling alongside bonds amid uncertainty about trade policy, interest rates, and economic data. At the close of trading on Tuesday, the Dow Jones Index (US30) dropped by 0.55%. The S&P 500 Index (US500) declined by 0.69%. The technology-heavy Nasdaq Index (US100) closed down by 0.82%. Rising Treasury yields added to the pressure, with 10-year yields approaching 4.3% and 30-year yields nearing 5%, which is seen as an unfavorable factor for equities. Sentiment was further dampened after a federal appeals court ruled that most of Trump’s tariffs were illegal, although they will remain in effect until October 14 pending a Supreme Court decision. Investors are now looking ahead to Friday’s August employment report, which could influence the Fed’s next rate decision, with markets currently expecting a 25-basis-point cut.

European stock markets were mostly down on Tuesday. The German DAX (DE40) fell by 2.29%, the French CAC 40 (FR40) closed down by 0.70%, the Spanish IBEX 35 (ES35) declined by 1.57%, and the UK’s FTSE 100 (UK100) closed down by 0.87%. European stocks closed sharply lower on Tuesday, following a broad sell-off in global equities amid rising long-term borrowing costs, as markets digested the latest inflation data. The Eurozone’s annual inflation rate edged up to 2.1%, while the core rate did not decrease for the third consecutive month, fueling persistent concerns about sticky service sector inflation. This data coincided with a new record for European bond issuance in a single session amid large sales in the UK and Italy, which put additional pressure on long-term securities.

WTI oil prices fluctuated around $65.7 per barrel on Wednesday, holding onto gains of more than 1% from the previous session, a rally supported by US sanctions and ongoing supply concerns. Washington recently imposed sanctions on shipping companies and vessels linked to an Iraqi-Kurdish businessman involved in transporting Iranian oil under the guise of Iraqi crude. Supply pressure also intensified after Ukrainian drones attacked facilities representing about 17% of Russia’s oil refining capacity. Meanwhile, traders are turning their attention to the September 7th OPEC+ meeting, though analysts do not expect any immediate changes to production levels.

Asian markets were mostly lower yesterday. Japan’s Nikkei 225 (JP225) rose by 0.29%, China’s FTSE China A50 (CHA50) gained 0.40%, Hong Kong’s Hang Seng (HK50) fell by 0.47%, and Australia’s ASX 200 (AU200) closed down by 0.30%.

Hong Kong stocks fell in early Wednesday trading, marking a second straight session of losses after a weak start on Wall Street the day before, where investors were assessing the outlook for President Donald Trump’s tariffs following a federal appeals court ruling that most of his sweeping measures were illegal. Further declines in mainland Chinese stocks also soured sentiment, even as a private survey showed that China’s composite PMI rose to a 9-month high in August, indicating a third consecutive month of private sector growth amid broad gains in manufacturing and services.

The Australian dollar was little changed at around $0.652 on Wednesday after falling by 0.5% in the previous session, as a strengthening US dollar offset optimistic domestic GDP data. On the domestic front, Australia’s economy grew by 0.6% in the second quarter, surpassing expectations of 0.5% and accelerating from a revised 0.3% in the first quarter, marking the 15th consecutive quarter of growth. Annual GDP also increased by 1.8%, the fastest growth since the third quarter of 2023, though investors remained cautious about the outlook, with market swaps indicating more than an 80% chance that the Reserve Bank of Australia will keep rates unchanged later this month.

A quarterly survey by the Monetary Authority of Singapore (MAS) revealed that economists have raised their 2025 growth expectations for Singapore and expect monetary policy to remain unchanged at the next review. The median growth expectations was raised from 1.7% in June to 2.4% after the government increased its 2025 projections range to 1.5%–2.5% in August, driven by stronger first-half results. Economists projections a 0.9% year-on-year growth for the third quarter. Geopolitical tensions were cited as the primary downside risk, while an easing of trade disputes and a pickup in the technology sector were named as key growth drivers.

On Wednesday, the New Zealand dollar held its recent decline at around $0.585 amid growing expectations of further policy easing by the Reserve Bank, given the weakness of the domestic economy. Recent data showed a sharp fall in export volumes in the June quarter, while import volumes rose significantly, indicating that trade likely had a major impact on GDP. Analysts now expect two more rate cuts, which would bring the rate down to 2.50%, the lowest level since mid-2022.

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.