Market Report.
🗣️ The main event later will be Fed Chair Jerome Powell who gets to speak on the economic outlook and takes questions on policy – that’s at 12:35 EDT/16:35 GMT.
💬 Federal Reserve Governor Stephen Miran, served as Trump’s Council of Economic Advisers chair in 2025 and just took his seat less than a week ago, outlined why he believes the Fed’s benchmark interest rate is too high and should be lowered aggressively. Miran argues that changes in tax, immigration, and other policies have created a different economic landscape that allows the Fed to cut its benchmark rate by nearly 2 percentage points from the current level.
📉 Miran sees monetary policy as “well into restrictive territory” and believes leaving rates roughly 2 percentage points too tight risks unnecessary layoffs and higher unemployment. He dissented from last week’s 0.25% rate cut, saying a 0.5% cut was warranted, and penciled in two more 0.5% cuts at the next meetings – a view that diverges from his FOMC colleagues. However, Miran’s views put him well outside the consensus on the Federal Open Market Committee, where the current approach advocates more caution and a tepid move lower in rates.
🚫 Additionally, Miran dismissed concerns over tariff-driven inflation, arguing that factors like reduced immigration will lead to less housing demand and lower inflation.
💶 The euro cannot replace the U.S. dollar as the world’s dominant currency, but needs to strengthen its global role, according to Bundesbank President Joachim Nagel. Nagel stated that the U.S. dollar is no longer fully perceived as a safe haven, citing concerns over unpredictable trade policies, unsustainable U.S. debt, and attacks on the Federal Reserve’s independence.
📊 To increase the euro’s international significance, Nagel said the EU needs a stability-oriented fiscal stance, predictable policies, military assertiveness, deep and liquid capital markets, and a wide range of high-quality, safe investments. Nagel also emphasized the need to better channel the high savings of European households to finance the green and digital transition, as well as defense spending.
🤖 He also highlighted the need for the euro to be able to ward off the stability threat posed by the growing role of stablecoins in the financial world.
📈 Central bankers will also invest in AI: The Bank of England Governor believes regulators must leverage advanced data analytics and AI to more effectively monitor the financial sector and mitigate systemic risks.
💻 Bank of England Governor Andrew Bailey said regulators overseeing the financial services industry should use artificial intelligence (AI) to help them spot problems among the firms they supervise. Bailey stated that central banks and other watchdogs gather vast amounts of data, but they are not optimally using it all. He expressed concern that the “smoking gun” evidence could be present in their systems without being detected.
🔍 To address this, Bailey emphasized the need for regulators to “invest heavily in data and data science, and techniques” like AI to better analyze the data they collect.
🏛️ The upcoming meeting between President Trump and Democratic congressional leaders represents a high-stakes negotiation to avoid a potential government shutdown over healthcare funding and other spending issues.
🤝 President Trump will meet with top Democratic leaders, Representative Hakeem Jeffries and Senator Chuck Schumer, on Thursday to discuss government funding amid a looming shutdown before the September 30 funding deadline. Healthcare is a central issue, with Democrats seeking more money for Affordable Care Act subsidies and restoring Medicaid funding, while Republicans control both chambers of Congress. The Senate rejected a short-term funding bill on Friday, increasing the odds of a shutdown as Congress has struggled to pass spending legislation in recent years due to rising partisan tensions.
📉 Germany’s federal and state government tax revenues were up 2% in August 2025 compared to the same month in 2024. However, the finance ministry report stated that economic momentum is not expected to significantly increase in the short term.
💰 From January to August 2025, tax revenues increased by 6.8% compared to the same period in 2024, reaching 576.5 billion euros. For 2025 as a whole, tax analysts predict revenues will climb to 893.3 billion euros, up 3.7% from the previous year.
🇩🇪 Germany, Europe’s largest economy, contracted in 2024 for the second consecutive year and is expected to be badly affected by U.S. tariffs due to its reliance on exports.
💵 Nvidia will invest up to $100 billion in OpenAI as the AI lab sets out to build hundreds of billions of dollars in data centers based around Nvidia’s AI processors. OpenAI plans to build and deploy Nvidia systems that require 10 gigawatts of power, which Nvidia CEO Jensen Huang says is equivalent to 4-5 million GPUs – twice as much as Nvidia shipped last year.
🔗 Link between OpenAI and Nvidia: The two major drivers of the recent AI boom, with OpenAI relying heavily on Nvidia GPUs for its AI development and deployment. The investment complements OpenAI’s existing partnerships with Microsoft, Oracle, SoftBank and others, with Nvidia and Microsoft described as “passive” investors and “critical partners.”
🇮🇳 India aims to become a global semiconductor powerhouse, but faces steep challenges as a late entrant in the race to produce advanced chips. India has approved 10 semiconductor projects worth $18.2 billion, including two fabrication plants and multiple testing/packaging facilities.
🏭 The “Semiconductor Mission” launched by India wants to create a full supply chain – from design to fabrication, testing, and packaging – within the country. India needs to address a wide range of factors like talent, policies, infrastructure, and ecosystem development. Experts say India needs to update its IP laws and enforcement mechanisms to better protect semiconductor IP, as it competes with more established ecosystems in the US, Europe, and Taiwan.
🏢 The biggest chip project in India currently is a $11 billion fab plant being built by Tata Electronics and Taiwan’s Powerchip. Other partnerships with companies from the UK and South Korea are also in the works.
🌍 In the international geopolitical context, Belgium, Monaco, Luxembourg, Malta and Andorra officially recognize the State of Palestine, joining the United Kingdom, Canada, Australia, Portugal and France in the last 24 hours.
🛑 Meanwhile, the United States considers sanctions on entire International Criminal Court over its investigations into Israel.
📊 Market view.
📈 S&P 500 futures remain at historical highs, currently trading above 6,750 points, while Nasdaq 100 futures have reached 25,000 points.
💵 The dollar has finally retraced after the significant gains it accumulated last week. The dollar index, which peaked at 97.80 points, has declined during yesterday’s session to 97.37 points. This has allowed for a pause in the downward movement that EUR/USD was experiencing, recovering to levels close to 1.1820 before retracing to the current 1.1795.
📉 Futures in Europe are resisting declines; they started yesterday’s session with losses but have partially recovered, with DAX 40 futures currently at 23,760 points. Eurostoxx futures, which surpassed 5,500 points on Friday, are attempting to recover from Monday’s declines and are currently trading at 5,460 points.
📉 Crude oil continues to weaken in line with last week’s trend and appears to be heading towards the support level of $65.15 for Brent crude.
📈 Gold futures continue to set new records, reaching $3,790 per ounce.
💔 Bitcoin has yet to recover from its similar decline on Sunday, when it fell more than 3%. Since then, it has struggled to cleanly surpass $113,000.
