Market Report.
🌀 Political crises are occurring, but the markets, as expected, are focusing more on monetary authorities. Amid the chaos caused by the Japanese Prime Minister’s division, Milei’s defeat in Argentina, the political crisis in France, and the geopolitical conflicts involving Trump, NATO, and Russia, the most relevant issue is what the Federal Reserve will do with interest rates next week.
💵 The markets are already pricing in a 25 basis-point interest rate cut from the Federal Reserve. The focus now is on whether the Fed could deliver a larger, 50 basis-point cut instead. Clues about the Fed’s potential move may come from the U.S. Labor Department’s preliminary revision estimate to employment data for the year through March, which is due later Today.
📉 The preliminary nonfarm payrolls benchmark revision to be published by the U.S. Labor Department on Tuesday could show a significant downward revision of up to 1 million jobs for the 12-month period through March 2025.
🛠️ Factors contributing to the slowdown include technological change, higher financing costs, uncertain policy signals, and an immigration crackdown that has undercut labor supply.
😡 The revisions have angered President Trump, who has accused the BLS Commissioner of faking employment data and nominated a critic of the agency to lead it.
🇫🇷 On Monday, as expected, French Prime Minister François Bayrou lost the confidence vote in the National Assembly, with 364 votes against him and 194 in his favor. Bayrou will now submit his resignation to President Emmanuel Macron today. Bayrou could stay on in a caretaker capacity for now. The far-right National Rally and hard-left France Unbowed parties are pushing for a snap parliamentary election and for Macron to resign.
📅 France faces a tense September, with planned nationwide protests by the “Bloquons Tout” movement on September 10, a potential credit rating review by Fitch on September 12, and trade union strikes and protests on September 18. The country grapples with high public debt and the need for fiscal consolidation measures.
💰 France’s public debt stands at 114% of GDP, with debt servicing accounting for around 7% of state spending. Far-right leader Marine Le Pen is calling for Macron to dissolve the National Assembly again, confident her National Rally party and allies would win a majority in a snap election.
📉 German exports unexpectedly fell by 0.6% in July, with a sharp 7.9% decline in exports to the United States due to the Trump administration’s tariffs on European imports. The drop in exports to the U.S., Germany’s biggest bilateral trading partner, helped drag down overall goods exports to non-EU partners by 4.5%. Separately, German industrial production rose by 1.3% in July, though the three-month trend showed a 0.1% decline.
📚 According to WSJ, Lawyers for Jeffrey Epstein’s estate have given Congress a copy of the birthday book put together for Epstein’s 50th birthday in 2003, which includes a letter with President Trump’s signature that Trump has denied exists. The letter contains typewritten text framed by the outline of a naked woman, and concludes with “Happy Birthday — and may every day be another wonderful secret.” The signature is a squiggly “Donald” below the waist, mimicking pubic hair.
🚫 Trump has denied writing the letter or drawing the picture, calling it “a fake thing.” He has filed a lawsuit against the Wall Street Journal reporters who first reported on the letter, alleging defamation.
⚠️ These facts can seriously damage Trump’s popular approval. A good part of his base believes the conspiracy theory that Epstein was an agent of the Israeli Mossad, who allegedly blackmailed politicians and influential people. It would be based on Epstein’s ties. Ghislaine Maxwell, Jeffrey Epstein’s former girlfriend, who was convicted as his key co-conspirator in a sex trafficking ring involving underage girls, is the daughter of Robert Maxwell, who was strongly suspected of being a Mossad agent. Officially, the UK Foreign Office suspected Maxwell of being a secret agent of a foreign government, possibly a double agent or a triple agent.
🇪🇸 Spain imposes broad sanctions on Israel, including travel restrictions, a ban on weapons and settlements, and increased assistance for Gaza and Palestine.
🗣️ The Israeli Foreign Minister responded: The attempt by Sánchez’s corrupt government to divert attention from serious corruption cases through a constant attack on Israel with anti-Semitic overtones is evident. It highlights the Spanish government’s lack of historical awareness of the crimes committed against the Jewish people, including the expulsion of Jews from Spain in the 15th century. He forgot to mention that the Spaniards did it years after the French, English, Germans, Dutch, and many other countries also did it.
📊 Market View.
📈 US futures continue to rise positively, approaching their previous highs. The Mini S&P 500 futures are currently at 6,515 points, nearing the peaks reached last week. The Nasdaq 100 futures are also advancing, and in the last few hours, they have tested the most recent resistance, approaching 23,900 points, currently trading at 23,847 points. The highs in the Nasdaq were recorded in August when they surpassed 24,000 points.
📉 The dollar index seems to be losing support at 97.50 points, currently falling to 97.37. This is allowing pairs like EUR/USD to rise above the resistance at 1.1750. GBP/USD is also advancing, reaching August highs at 1.3580 in recent hours.
📉 In Europe, markets appear to be weakening after a recovery during yesterday’s session. The DAX 40 attempted to regain levels lost last week, with 23,800 points in its futures contracts seeming to act as resistance, currently trading at 23,780 points. Euro Stoxx 50 futures face a similar situation around 5,375 points, which has caused prices to pull back to the current 5,360 points.
🛢️ Crude is trying to recover despite the turbulence caused by OPEC and the Russian supply crisis. The Brent barrel is currently above $66.50.
💰 A new historical high for gold has approached $3,700 per ounce in recent hours, currently trading at $3,685.
💻 Bitcoin has been advancing over the last few hours, sitting above $113,000 as it attempts to break its nearest resistances.
