MARKET WRAPS
Watch For:
Manufacturing PMI data for EU, Germany, France, U.K.; EU unemployment; U.K. house price index, money and credit; no major corporate trading updates expected
Opening Call:
European stock futures were little changed early Monday. Asian stock benchmarks declined; the dollar edged lower; oil futures fell and gold rose.
Equities:
Stock futures were little changed at the start of the week as markets await a number of data releases, including eurozone inflation data and the U.S. jobs report.
Markets are increasingly anticipating that the Federal Reserve will cut interest rates at its next meeting on Sept. 17 after July’s weak jobs data and recent comments from Fed Chair Jerome Powell at Jackson Hole suggesting that such a move was possible.
U.S. money markets are pricing an 84% chance of a 25 basis-point rate cut at the coming Fed meeting, LSEG data show.
A September rate reduction isn’t quite nailed on, however, and in that light Friday’s U.S. nonfarm payrolls data for August will be a key piece of data for investors.
Forex:
The Fed is headed toward cutting rates, and the market’s reaction has been to worry about inflation down with the road, tempering the demand for long-term bonds, and the yield curve has started to steepen, DBS said.
Markets’ reluctance to absorb long-term bonds could antagonise Trump, and the casualty from all this may be a considerably weaker dollar, the bank added.
Bonds:
Credit spreads on French bank bonds are likely to recover from their recent widening, Societe Generale credit strategist Juan Valencia said. The risk premium on French bank bonds increased last week as markets became cautious ahead of the confidence vote the minority government–currently led by Prime Minister Francois Bayrou–faces on Sept. 8.
“We believe that the volatility will not last too long, and spreads will recover,” Valencia said.
Energy:
Oil fell early Monday. Investors are anticipating a rise in supply as OPEC+ unwinds their production cuts, UOB said. The end of the summer driving season is also likely to mean that there will be weaker demand for U.S. gasoline, it added.
Metals:
Gold prices strengthened in Asia. Prices are likely to consolidate in the short term before another rally toward $3,600/oz by year-end, ANZ said.
The precious metal’s recent rally, which has been mainly supported by trade uncertainty, is losing steam as U.S.-China trade negotiations are underway. A strong catalyst would be needed to push gold’s prices beyond their record high, ANZ said. “We believe macroeconomic data are likely to take over as the primary catalyst.”
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Iron ore futures declined following China’s August PMI data. Construction PMI for August declined sharply to 49.1, the lowest on record outside the pandemic, which reflects fading support from fiscal stimulus and a persistent decline in the property sector, said Capital Economics’ Zichun Huang.
Meaningful demand growth for iron ore and steel from China’s property market appears unlikely until new construction activity rises, ANZ’s Daniel Hynes and Soni Kumari said. That said, the market expects China’s policymakers to apply meaningful cuts to steel production capacity in the coming months, which could provide support to iron ore prices, they added.
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Uranium prices are likely to rise to $100/lb next year, Citi said. “Term prices have been trading at $80/lb in the past five months, which we consider supportive for our bullish narrative,” analyst Arkady Gevorkyan said. Uranium has increased to $73/lb in recent months, and Citi thinks it will achieve $80/lb over the coming three months.
“The bullish risk skew for uranium prices is significant when combined with potential under delivery of uranium producers and an increasing energy demand that incentivize an increase in nuclear energy capacity,” Citi said.
TODAY’S TOP HEADLINES
Fed Upheaval Sows New Uncertainty About Path of Rates
Weeks before what is likely to be the Federal Reserve’s first interest-rate cut of the year, an unprecedented effort by President Trump to reshape the central bank is scrambling the dynamics on its policy committee.
In an Aug. 22 speech, Fed Chair Jerome Powell opened the door to a rate cut at the Fed’s Sept. 16-17 meeting to cushion a weaker labor market. While a quarter-point reduction from the current 4.25% to 4.5% target range still looks all but assured, the breadth of support for that cut among Fed officials, and what comes after, have been thrown into doubt.
U.S. Stocks Are Now Pricier Than They Were in the Dot-Com Era
The S&P 500’s march to a record high this year hasn’t come cheap: By some measures, stocks have never been pricier.
Investors are now paying more than ever for each dollar of revenue the index’s members produce. The benchmark traded at 3.23 times sales on Thursday, a record high.
With Another Government on the Brink of Collapse, Is France the New Italy?
PARIS-There is a country in the European Union saddled with a massive debt pile, rising borrowing costs and governments that collapse in a matter of months-and it’s not Italy.
France, rather, is sliding into a morass that once plagued its southern neighbor. If French Prime Minister François Bayrou loses a Sept. 8 confidence vote on his efforts to rein in the country’s budget deficit with 44 billion euros-roughly $51 billion-in cuts, he will become the fourth head of government to lose his job in a year and a half.
Populist Right-Wing Parties Lead Polls in Europe’s Biggest Economies
LONDON-For the first time, populist or far-right parties are leading the polls in the U.K., France and Germany, the latest sign of growing voter discontent in much of the continent following years of high immigration and inflation.
Far-right and anti-immigration parties have already entered government in countries such as Italy, Finland and the Netherlands. But this year marks the first time that they have been ahead in Europe’s biggest economies at the same time. That could provoke a period of political turbulence in all three countries, even if national elections are likely still a few years away.
Intel’s CHIPS Act Requirements Waived After U.S. Government Takes Stake
Intel’s funding agreement with the U.S. government has loosened some requirements now that it is taking some stake in the chip company.
Intel no longer needs to meet certain project milestone requirements to receive funding, as long as it shows that it already spent $7.9 billion in eligible costs on projects under an agreement signed with the Commerce Department in November, Intel said in a filing Friday.
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Expected Major Events for Monday
00:01/IRL: Aug Ireland Manufacturing PMI
04:30/NED: Jul Retail turnover
05:00/NED: Aug Netherlands Manufacturing PMI
06:00/NOR: 2Q Credit Indicator C3
06:00/UK: Aug Nationwide House Price Index
06:30/HUN: Jul PPI
06:30/SWI: Jul Retail Sales
07:00/TUR: 2Q GDP
07:00/POL: Aug Poland Manufacturing PMI
07:00/TUR: Aug Turkey Manufacturing PMI
07:15/SPN: Aug Spain Manufacturing PMI
07:30/CZE: Aug Czech Republic Manufacturing PMI
07:30/SWI: Aug procure.ch Purchasing Managers’ Index
07:45/ITA: Aug Italy Manufacturing PMI
07:50/FRA: Aug France Manufacturing PMI
07:55/GER: Aug Germany Manufacturing PMI
08:00/GER: Aug Bavaria CPI
08:00/GER: Aug Brandenburg CPI
08:00/POL: 2Q GDP
08:00/ITA: Jul Unemployment
08:00/EU: Aug Eurozone Manufacturing PMI
08:00/GRE: Aug Greece Manufacturing PMI
08:30/UK: Jul Bank of England effective interest rates
08:30/UK: Jul Monetary & Financial Statistics
08:30/UK: Jul Money and Credit – Lending to Individuals, Lending to Businesses, Broad Money and Credit
08:30/UK: Aug S&P Global UK Manufacturing PMI
09:00/POR: Jul Retail trade
09:00/EU: Jul Unemployment
09:00/CYP: Jul Retail trade
09:00/CYP: 2Q GDP
09:00/GRE: Jul Labour Force Survey
15:59/UKR: Jul POSTPONED: Industrial Production
16:59/AUT: Aug Unemployment figures
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(END) Dow Jones Newswires
September 01, 2025 00:15 ET (04:15 GMT)
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