Market Report.
☕ If this week’s reports become dense, it is because it is a busy week trying to predict the decisions that will be taken by central banks. Take a stronger coffee, next week we will return to normal, if the markets allow it.
📉 One day less until the decisions of the central banks this week, starting with the largest of them all, the Fed. Let’s be honest, they will cut rates due to the state of the labour market, which finally vindicates them as it begins to weaken according to the numbers, or as an excuse to yield to the pressure exerted by Trump. However, inflation is not receding, and according to economic manuals, rates should not be lowered under such circumstances. The scenario of rates falling below inflation, leading to negative real yields, is not far off—a problem that is about to hit Europe and its ECB.
💼 Concerns about a softening job market will keep the Federal Reserve on course to resume its interest rate cuts next week, though the central bank is likely to move cautiously due to signs that tariffs are pushing prices higher. Government reports showed jobless claims jumped last week and consumer inflation rose more than expected in August, with big increases in the prices. Consumer prices rose 2.9% in August on a year-over-year basis, matching the rise in July. The Fed targets 2% inflation by a different measure.
🏛️ The U.S. Senate has narrowly confirmed Stephen Miran to the Federal Reserve’s Board of Governors, expanding President Trump’s influence over the central bank. Miran’s confirmation, which took less than 6 weeks, gives Trump’s top economic adviser one of 12 interest-rate-setting votes on the eve of a key Fed policy meeting. Estimations anticipate that Miran will dissent on the policy decision in favor of a bigger rate cut than the quarter-percentage-point reduction expected.
🤖 Miran will retain his White House job but go on unpaid leave while serving at the Fed, a move that has led Democrats to call him a Trump “puppet.”
📊 According to Evercore ISI strategist Julian Emanuel, stocks could be in for a bumpy ride once the Federal Reserve begins cutting interest rates. The longer-term performance is less uniform and depends on the reason behind the Fed’s rate cuts. When the Fed cuts “because they can” (without a severe economic downturn), the 12-month stock market returns are “robust”. This is the type of environment Emanuel expects if the Fed cuts at the upcoming meeting. In contrast, when the Fed cuts “because they have to” (due to a recession or similar economic challenge), the 12-month stock performance is “anemic”.
🇬🇧 In UK, the Bank of England is expected to keep its benchmark interest rate on hold at 4.00% on September 18, as inflation is creeping up. Inflation is projected to touch 4% in September and not return to the BoE’s 2% target until mid-2027, creating uncertainty about the pace of rate cuts. Labor and inflation data for August will be crucial in determining whether the BoE cuts in November or decides to pause the easing cycle.
📉 QT – quantitative tightening: The BoE has also started reducing the size of its bond holdings, with the median forecast showing a reduction of 67.5 billion pounds during October 2025-September 2026. The UK economy is expected to post modest quarter-on-quarter growth of 0.2-0.4% through 2026, with annual GDP growth of 1.3% this year and 1.2% next year.
📉 Meanwhile, Britain’s jobs market has weakened again, with payrolls falling for a sixth month and vacancies dropping further, according to official data. However, wage growth stayed strong, underscoring why the Bank of England is so cautious about cutting interest rates. Basic wage growth in the private sector edged down to 4.8%, but overall average weekly earnings, excluding bonuses, grew by 5.0%. The labor market figures highlight the “stagflation quandary” facing the Bank of England, with wage growth remaining elevated amid concerns over inflation persistence.
🌏 The U.S. and China have reached a “framework” deal for the social media platform TikTok, according to U.S. Treasury Secretary Scott Bessent. President Trump and Chinese President Xi Jinping will discuss the details of the framework deal on Friday. China’s lead trade negotiator confirmed the framework deal is in place and said the U.S. should not continue to suppress Chinese companies.
🕒 The deal comes as TikTok parent company ByteDance faces a September 17th deadline to divest the platform’s U.S. business or potentially be shut down in the country. Several parties, including Oracle, Tesla CEO Elon Musk, and an AI startup called Perplexity, have expressed interest in acquiring TikTok’s U.S. operations.
📈 Beautiful symmetry in Tesla’s charts brings the right price to resistances after the intervention of its CEO in the market. Tesla CEO Elon Musk disclosed that he purchased 2.57 million Tesla shares on Friday, totaling around $1 billion. This is Musk’s largest ever open market purchase of Tesla stock. Musk’s insider purchase was seen as a vote of confidence by traders, and Tesla’s share price rose over 3% on Monday in response. Tesla’s stock has been weighed down this year by factors like slumping sales and the end of certain electric vehicle incentives.
🛢️ Oil prices edged up on Tuesday after rising in the previous session. Ukraine has intensified attacks on Russia’s energy infrastructure in an attempt to impair Moscow’s war capability, as talks to end their conflict have stalled. U.S. Treasury Secretary Scott Bessent said the government would not impose additional tariffs on Chinese goods to encourage China to halt purchases of Russian oil unless European countries hit China and India with steep duties. The interest rates cut by Fed this week could boost fuel demand.
⚔️ Netanyahu says bombing other countries by Israel will continue: “I do not rule out a renewed strikes on terrorists in foreign countries, that is what advanced democracies do”.
🌍 More than 50 Arab and Islamic countries are calling for Israel’s exclusion from the UN following the attack in Doha. At the summit, held in Qatar, participating countries called for sanctions, a review of diplomatic relations and the possible exclusion of Israel from the UN, as well as supporting arrest warrants issued by the International Criminal Court.
📰 According to Le Monde, Israeli officials told French authorities that the Iranian nuclear program was not completely destroyed after the June airstrikes by the US and Israel, and Iran managed to restore it.
🇫🇷 French President Emmanuel Macron has privately admitted that NATO is the main cause of the conflict in Ukraine, according to renowned American economist Jeffrey Sachs. In a foreign policy debate with the Italian daily il Fatto Quotidiano, Sachs recalled that in May 2022, when Macron gave him the Legion of Honour, the French leader informed him in secret that “NATO was causing this war” and that it was “exactly the opposite of what he says publicly.”
📈 Market View.
📈 The S&P 500 futures start today in contango following the renewal of contracts, reaching historical highs in the region of 6,685 points. The Nasdaq 100 futures follow suit, standing at 24,585 points.
💵 The dollar index moves away from support levels around 97.50 and falls to the current 97.15, as if celebrations for the interest rate cut have begun. In this context, the EUR/USD approaches the threshold of 1.18, currently trading at 1.1785.
📉 In Europe, the futures indices continue to show no gains. The DAX 40 futures have yet to surpass the range from 23,900 to 23,800, leaving multiple retracements and selling zones above 23,800; the contracts are currently trading at 23,775 points. The Eurostoxx 50 futures are more optimistic, with the Eurostoxx reaching 5,450 points.
📈 Crude oil continues to fluctuate in a zigzag pattern, showing some recovery in prices, with Brent crude approaching $68, again exceeding $67.50 per barrel.
💰 Gold futures have reached new historical highs, trading above $3,700 an ounce, having reached $3,725 at this moment.
💹 Bitcoin remains bullish and is currently testing the resistance level of $116,000, trading at $115,855.
