Market Report.
😊 Markets are regaining some optimism after the inflation data on Friday, where inflation for now does not appear to be a problem in the Fed’s rate-cutting agenda.
📊 The inflation readings were in line with market expectations and are unlikely to change the Fed’s course, as policymakers have indicated they see two more quarter-percentage-point rate cuts by the end of the year.
📉 Core inflation, as measured by the personal consumption expenditures (PCE) price index, was little changed in August, likely keeping the Federal Reserve on pace for further interest rate reductions. The headline PCE price index rose 0.3% for the month, putting the annual inflation rate at 2.7%. The core PCE, which excludes food and energy, rose 0.2% for the month and was up 2.9% annually.
💼 The data suggests President Trump’s tariffs have had only a limited pass-through effect on consumer prices, as companies have relied on pre-tariff inventory and cost-absorbing measures to limit the impact.
🗓️ Remember that this week we will have US labor market report. Will be very sensitive information and key to understand what could be the next moves of the Fed. Wednesday however, also will be a key day, I give you the reasons below:
🏛️ Congress is facing a looming deadline to pass legislation to avert a government shutdown on October 1, the first day of the 2026 fiscal year. Republican leaders in Congress are urging Democrats to agree to a short-term funding bill to buy more time, while Democrats are rejecting this and demanding the bill address recent Republican cuts to healthcare programs.
🤝 President Trump has summoned congressional leaders from both parties to the White House today to discuss the funding legislation, but Democrats are skeptical of the meeting being productive if Trump simply “rants” at them.
🚫 The federal government is on the brink of its 15th partial shutdown since 1981 if Congress does not act, which could disrupt a wide range of government services and furlough thousands of federal workers.
💰 Democrats are seeking to address the expiration of temporary Affordable Care Act subsidies in the funding bill, while Republicans want to deal with that issue separately after a temporary funding measure is passed.
🔌 The Trump administration is considering imposing tariffs on foreign electronic devices based on the number of semiconductor chips they contain. The details of how this proposed tariff structure would work in practice are unclear at this point. This potential new tariff policy comes as a surprise to the administration’s trade partners, who may be questioning the value of negotiating deals with the U.S. if new levies can be imposed arbitrarily.
🌍 The Middle East, particularly the Gulf region, could emerge as a major beneficiary of President Trump’s plan to increase H-1B visa fees in the U.S. Gulf countries like Saudi Arabia and the UAE are driving technology-focused national strategies and creating a business-friendly environment to attract top global tech talent.
⚖️ The flexibility of the labor market in the UAE is seen as a key advantage, as the region becomes more attractive relative to tightening foreign labor limitations in other countries like the U.S. and UK. Middle East is well-positioned to capitalize on the potential disruption to the global tech talent landscape caused by changes to U.S. immigration policies.
📉 Cooling of the UK labor market and business sentiment: Job search website Adzuna reported a 1.3% drop in online job adverts in the 12 months to August, the first such decline since February, and a 2.1% month-on-month drop. However, vacancies remained higher than in January, typically a peak hiring month, suggesting the job market is “cooling, not collapsing.”
💵 Advertised salaries rose 0.2% in August and 8.9% year-over-year, highlighting the dilemma facing the Bank of England between hiring slowdown and inflation pressures. A survey by the Confederation of British Industry showed British companies expect a drop in activity over the next three months.
🌐 There is also a persistent climate of global economic uncertainty and renewed nervousness around the November budget as factors hampering business decision-making and confidence.
📈 The Bank of Japan’s policy meeting this month saw a hawkish split, with two board members dissenting and calling for a 0.25% interest rate hike, surprising markets. The dissenters, Naoki Tamura and Hajime Takata, are seen as wanting to nudge Ueda to hike rates sooner, as it was something that would happen eventually. The timing of the next rate hike will depend on upcoming data convincing policymakers that the U.S. can avoid a recession and that U.S. tariffs won’t derail Japan’s economic recovery.
💡 Mounting price pressures, especially for daily necessities, have also been worrying the BOJ board since as early as July, adding to the case for rate hikes. The dissent of two board members, rather than just one, could sway other members more in favor of a near-term rate hike, according to Reuters.
📱 Vice President JD Vance expressed optimism about the future of TikTok in the U.S. after President Trump signed an executive order approving a proposal to keep the app operating in the country. Vance said the deal has successfully separated TikTok from its parent company ByteDance and will allow the U.S. to control data security and ensure the algorithm is not used as a propaganda tool by the Chinese government.
🏢 Under the terms of the deal, a new joint-venture company will oversee TikTok’s U.S. business, with ByteDance retaining less than a 20% stake. Major investors will include Oracle, Silver Lake, and the Abu Dhabi-based MGX fund. Vance said over 80% of the new TikTok U.S. entity will be owned by American investors and their partners, ensuring no large stake for Chinese entities.
🤔 However, ByteDance has not acknowledged the transaction, and there are no indications the Chinese government has made necessary legal changes to allow the deal to occur.
🌏 Geopolitics:
✈️ The deployment of approximately a dozen KC-135R/T “Stratotanker” aerial-refueling tankers from the U.S. Air Force is noteworthy, as they are making their way northeast and set to cross the Atlantic. Reports indicate that several of these aircraft are headed for RAF Mildenhall in England, raising questions as to whether this is a routine rotation or an actual operation.
👤 Larry Ellison, known for his role as the owner of Oracle and media outlets like CBS and CNN, and now involved with TikTok, is driving the idea of a digital ID that favors data centralization and comprehensive surveillance. He argues that “citizens will behave wonderfully because we are constantly watching and recording everything that happens,” which raises serious concerns about privacy and social control.
🔍 The need to establish a Digital ID arises from the intention of knowing the identity of users. For this reason, it is sought to link the digital wallet to a digital ID, which in turn would be associated with physical identification by collecting biometric data. All this as a condition for the successful implementation of the CBDC, merging fiscal and monetary control.
✊ Youth-led anti-government protests across Morocco escalated into clashes with police on September 27-28, marking the largest such unrest in years. Protesters in multiple cities, including Rabat, Casablanca, Marrakech, Agadir, and Souk Sebt, denounced the government’s spending priorities, especially on stadium projects for the 2030 World Cup, over investments in healthcare and education.
🚨 Scores of protesters were arrested during the clashes with police across at least 11 cities in Morocco. The protests highlight the growing discontent among Moroccan youth over the government’s handling of public services and infrastructure, with the focus on expensive sports facilities drawing particular ire.
🛩️ Several European countries, including Denmark and Norway, have reported a surge in drone sightings and incursions into controlled airspace, prompting heightened concerns. In response, Denmark has temporarily banned all civilian drone flights, while NATO has increased regional vigilance around the Baltic Sea ahead of an EU summit in Copenhagen.
🚫 Airports in Copenhagen, Aalborg, and Oslo were forced to briefly halt operations after drones were spotted entering their airspaces. New drone sightings have also been reported near Danish military bases, adding to the security worries.
📉 These events shake the Russian threat in public opinion. Although it is also true that some sources report that they could be provocations to increase the most warmongering stance towards Russia.
🇺🇦 Trump has authorized Ukraine to execute long-range drone and missile strikes against targets within Russia, as stated by White House special envoy Keith Kellogg in an interview with Fox News.
📊 Market View.
📈 US futures are regaining bullish momentum, as explained in the news section. S&P 500 futures are back above 6,700 points, currently reaching 6,719.50 points. Nasdaq 100 futures have surpassed 24,800 points, currently at 24,835 points.
💵 The dollar has finally deflated during Friday’s session after a spectacular bullish rally last week. The DXY dollar index has fallen to the current 97.95 points, allowing pairs like EUR/USD to regain strength, surpassing 1.17 and currently trading at 1.1725.
📉 US bonds have also retraced in their yields, indicating renewed confidence in interest rate cuts. The 10-year bond yield is at 4.15%, while the 2-year yield is at 3.63%.
🛢️ On Friday, Brent crude approached $70 before retracing to the current $68.80.
💰 Gold futures are starting the week trading at new historical highs, surpassing $3,840 per ounce.
💻 Bitcoin managed to rebound from $109,000, rising during Sunday’s session to $112,000, and is now positioned at $111,790.
