Retail Sales Overview

The latest US retail sales data for September showed a significant increase, with a month-on-month (MoM) growth of 0.77%, surpassing the forecast of 0.3%. This is a slight decrease from the previous month's 1.29% but still indicates robust consumer spending. Year-on-year (YoY), retail sales rose by 6.29%, up from 5.56% in the previous period.

Control Group Sales

The retail sales control group, which excludes certain volatile items, also showed a MoM increase of 0.77%, higher than the anticipated 0.3%. The YoY growth for the control group was 4.72%, marginally up from 4.7% previously.

Components Details

• Gasoline Stations: Experienced a significant YoY increase of 28.05%, up from 21.03%.
• Electronics Appliance: Saw a notable rise to 9.39% from 8.3% YoY.
• Furniture: Rebounded to a 4.85% increase from a previous decline of -0.41%.
• Health & Personal Care: Declined by -1.18% YoY, compared to -0.8% previously.
• Food & Drinking Services: Increased to 6.99% from 5.81% YoY.

These figures suggest strong consumer demand across various sectors, particularly in gasoline and electronics.

Macroeconomics

US September CPI data revealed persistent inflation pressures, with headline CPI rising 0.6% month-over-month and 3.7% year-over-year, while core CPI, excluding food and energy, increased 0.3% month-over-month and 2.6% year-over-year, both exceeding expectations. This reinforced market expectations for potential additional Federal Reserve rate hikes, with the probability of an October hike rising to around 32-35%. The Fed's Beige Book also indicated robust or intensifying price pressures across many districts, often linked to higher energy costs. In China, September CPI rose 0.9% year-over-year and PPI increased 5.0% year-over-year, while exports surged 36.3% year-over-year, and social financing and new RMB loans both saw significant increases.

Major Stock Markets

Major US stock indexes closed lower, driven by the hotter-than-expected inflation data and growing concerns over funding for AI infrastructure, which led to a broad sell-off in technology shares. The S&P 500 closed down -1.1% to 7719, the Nasdaq Composite closed down -1.9% to 26693, and the Dow Jones Industrial Average closed down -0.1% to 51622. Defensive sectors like healthcare and consumer staples outperformed, while growth sectors, including technology and communication services, lagged. European equities, however, largely bucked the trend, with the Euro Stoxx 50 gaining 0.4% and the UK FTSE 100 rising 0.7% to 10725. Asian markets were mixed, with some indices in China, including the Shanghai Shenzhen CSI 300 Index which closed down -1.4% to 4218, a record low, and South Korea's KOSPI Index which closed down -0.4% to 6009, lower.

Major Government Bonds

US Treasury yields experienced significant volatility following the release of the inflation report. Yields initially surged, with the 10-year Treasury yield briefly touching its highest levels of the year above 5.3%, as markets priced in increased odds of further Fed tightening. However, yields largely retraced these gains later in the session, with the 10-year Treasury yield ultimately falling down -0.03 percentage points to 5.2%, and the 2-year yield ending near flat around 4.80-4.82%.

Major Commodities

Oil prices finished modestly higher, with WTI crude settling up 1.0% at $95.1 per barrel and Brent crude rising 0.35% to $106.06 per barrel, primarily due to escalating Middle East tensions and reports of a strike at Saudi Aramco headquarters. Conversely, precious metals saw sharp declines as the US dollar strengthened, with the US Dollar Index rising 0.3% to 102.5, and expectations for higher interest rates increased; gold was down -1.3% to $4123.6 per ounce, and silver plummeted 5.98-6.1% to approximately $55.62-$55.88 per ounce.

Highlight

The latest Consumer Price Index (CPI) report for September shows an increase in inflation rates, surpassing forecasts. The US CPI (NSA, YoY) rose to 3.74%, higher than the previous 3.4% and the forecasted 3.6%. The CPI (SA, MoM) also increased to 0.65%, exceeding both the previous 0.4% and the expected 0.6%. Core CPI (NSA, YoY) reached 2.56%, above the previous 2.45% and the forecasted 2.5%. Similarly, Core CPI (SA, MoM) climbed to 0.33%, surpassing the previous 0.29% and the forecasted 0.2%.

Components

The Energy sector saw a significant rise, with a YoY increase of 20.35%, up from 16.05%. Transportation costs also surged, with a YoY increase of 7.77%, compared to the previous 5.97%. Medical Care Commodities experienced a notable decline, with a YoY decrease of -3.27%, down from -2.69%. Shelter costs rose to 3.22% from 3.03%, while Transportation Services increased to 2.77% from 2.46%. Other components such as Food & Beverages, Apparel, and Medical Care Services showed moderate changes in their respective YoY figures.

Macroeconomics

US private employers added an average of 24,750 jobs per week for the four weeks ended September 26, a modest slowdown from the previous report, while the unemployment rate held at 4.2%. Existing home sales unexpectedly rose 1.5% month-over-month to 3.99 million units in September. Federal Reserve President Williams indicated one more rate hike this year is appropriate, but no further tightening is expected in 2027, while Governor Waller noted rising long-term bond yields are already aiding demand suppression. The IMF slightly upgraded 2026 global GDP growth to 3.1%, warning of persistent risks from elevated energy prices and financial instability.

Major Stock Markets

Global equity markets experienced a mixed day, with US indices closing slightly lower as investors digested initial earnings reports and reassessed the AI trade. The S&P 500 closed at 7805, down -0.0%, the Dow Jones Industrial Average fell -0.4% to 51670, and the Nasdaq Composite declined -0.2% to 27204. Major US banks reported varied results, with several exceeding earnings estimates while one prominent institution missed on revenue. The technology sector, particularly semiconductors, underperformed significantly due to intensifying competition concerns and elevated valuations, leading to sharp declines in Asian markets, notably South Korea's KOSPI which plunged -5.5% to 6035. European equities also saw broad declines.

Major Government Bonds

US Treasury yields saw modest declines across most tenors, with the 10-year Treasury yield falling to 5.2%, influenced by Federal Reserve President Williams' comments suggesting a potential end to rate hikes in 2027. The 2-year Treasury yield, however, edged slightly higher. European government bonds faced pressure, with continued focus on France's sovereign bond turmoil as a potential contagion risk for European fixed income. Australian and other Asian government bond yields generally edged lower, reflecting a cautious market sentiment.

Major Commodities

Oil prices showed a mixed performance, with WTI crude extending gains, up 1.0%, to settle at $94.6 per barrel amid ongoing Middle East disruptions, including reports of attacks on shipping in the Strait of Hormuz and a strike on Saudi Aramco's headquarters. Brent crude, however, saw slight declines. Gold prices struggled for direction, closing marginally lower, down -0.1%, at $4184.7 per ounce, caught between inflation concerns and the US rate outlook. Industrial metals like copper saw mixed performance, with copper rising 0.5% to $6.7, while aluminum declined, reflecting broader market concerns tied to the AI trade and global economic outlook.

Highlight

The US JOLTS Job Openings for August reported a decrease to 7,079,000 from the previous 7,335,000. The Job Openings Rate slightly decreased to 4.3% from 4.4% in the previous period.

Components

The US JOLTS Quits Rate remained stable at 1.9%, showing no change from the previous month. The Hires Rate saw a slight increase to 3.3% from 3.2%. Meanwhile, the Layoffs Rate decreased to 1.0% from 1.1%.

Macroeconomics

A Federal Reserve official indicated that inflation is decelerating slowly and further monetary tightening might be necessary, favoring "smaller, more frequent policy adjustments." The US Dollar Index climbed 0.4% to 102.6, reaching a record high since April 10, 2025. No significant US economic data was released due to a holiday, but French fiscal concerns intensified, causing the spread between French and German 10-year government bond yields to widen to levels reminiscent of the European debt crisis.

Major Stock Markets

US equity markets closed mixed, with the S&P 500 down -0.1% to 7807 and the Nasdaq Composite down -0.4% to 27246, primarily weighed down by weakness in technology and semiconductor stocks. In contrast, the Dow Jones Industrial Average gained 0.4% to 51851, supported by energy and traditional industrial sectors. European markets generally advanced, with the Euro Stoxx 600 up 0.7%, while Asian markets showed divergence, as South Korea's Kospi dropped -3.7% to 6384 amid a tech sell-off, and Chinese A-shares also declined.

Major Government Bonds

US Treasury markets were closed for a holiday, leading to limited activity. In Europe, Germany's 10-year bond yield was down -0.01 percentage points to 3.5%, but French 10-year yields increased, reflecting heightened investor concerns over France's fiscal health and widening the yield spread against German bonds.

Major Commodities

Crude oil prices saw a significant rise, with WTI crude settling up 1.6% at $93.3 per barrel and Brent crude increasing 1.8% to $106.65 per barrel. This surge was primarily driven by escalating geopolitical tensions in the Middle East, including Houthi attacks on Saudi Arabia and reported Iranian actions in the Strait of Hormuz, alongside skepticism regarding a proposed Russia-Ukraine energy ceasefire. Gold prices declined -0.4% to $4,198.6 per ounce, pressured by a stronger US dollar, while industrial metals generally advanced.

Macroeconomics

US consumer sentiment declined in October, with the preliminary University of Michigan Consumer Sentiment Index falling to 46.3 from 48.1 in September, and the current conditions index hitting a record low of 44.7. Inflation expectations rose, with the 1-year outlook at 4.7% and the 5-year outlook at 3.5%. The US dollar continued its upward trend, marking its fourth consecutive week of gains, rising 0.1% to 102.2, while the Euro declined down -0.1% to 1.120 against the dollar for a fifth straight week. Fed officials reiterated the need for further rate hikes, though October tightening expectations faded slightly, and the US federal government's 2026 fiscal year budget deficit increased by 21% to nearly $2 trillion, reaching over 6% of GDP.

Major Stock Markets

Major US equity markets rebounded, with the S&P 500 gaining 0.6% to 7812, the Dow Jones Industrial Average rising 0.8% to 51655, and the Nasdaq Composite climbing 0.6% to 27366, closing the week near record highs. The S&P 500 had set a fresh record of 7,844.52 earlier in the week, and the Nasdaq achieved its fourth consecutive weekly gain. However, the Russell 2000 underperformed for the fifth straight week, reflecting weakness in small-cap stocks, while the AI trade saw mixed performance with some chipmakers lower but software strong. European markets also closed higher, though Asian markets generally saw declines.

Major Government Bonds

US government bond yields were volatile, with the benchmark 10-year Treasury yield ending the week up 0.01 percentage points to 5.2%, after briefly peaking at 5.3645% (the highest since April 2002) earlier in the week, and continuing its rising streak. The 2-year Treasury yield was around 4.79%. The yield curve steepened, and while some auctions were well-received, yields faced pressure from French fiscal concerns, AI financing needs, Middle East risks, and ongoing inflation worries. European bond markets, particularly French bonds, saw rising yields due to debt sustainability concerns.

Major Commodities

Crude oil prices experienced significant volatility, with WTI crude settling up 0.2% to $91.7 per barrel, and Brent crude at $104.72 per barrel (up 0.42%), driven by geopolitical tensions in the Middle East, including Iran's warnings and reports of US military preparations, as well as President Trump's announcement of a deal for Russia to supply millions of tons of diesel to the global market. Gold prices rallied, with December futures settling up 1.5% to $4,220.3 per ounce, breaking a two-week losing streak, while silver also saw strong gains.

Macroeconomics

The September Federal Reserve meeting minutes revealed unanimous support for the recent rate hike, with most officials anticipating one more increase by year-end. Fed governors Waller and Musalem reinforced the need for further tightening, though Waller noted flexibility in the timing of future hikes. Economic data showed US - Initial & Continuing Jobless Claims declined to 197,000, better than the 200,000 expected, indicating a resilient labor market, while US - Initial & Continuing Jobless Claims rose slightly to 1.72 million.

Major Stock Markets

US equity markets were mixed, with the Dow Jones Industrial Average edging up 0.1% to 51232, while the S&P 500 was down -0.5% to 7765 and the NASDAQ Composite Index was down -1.2% to 27193. The tech sector, particularly AI-related stocks and semiconductors, underperformed significantly after reports suggested OpenAI's annualized revenue was approaching $50 billion by September, falling short of previously circulated figures and raising concerns about AI investment returns. Major Asian and European markets also closed broadly lower, with some indices hitting record lows.

Major Government Bonds

US Treasury yields initially rose but then retreated, with the benchmark US - 10-Year Treasury Note Yield down -0.05 percentage points to settle at 5.2%. The 30-year Treasury yield also declined about 6 basis points to 5.60%, following strong demand at a $22 billion auction. This unwound some of the recent upward pressure, though yields remained near multi-decade highs, while the US Dollar Index was down -0.1% to 102.1 against most major currencies.

Major Commodities

WTI Crude Oil prices surged, settling up 3.2% at $91.1 per barrel, and Brent Crude Oil rose 4.1% to $104.28 per barrel. The rally was fueled by renewed concerns over Middle East supply disruptions, including increased attacks on shipping in the IMF - Strait of Hormuz - Daily Transit Calls & Transit Trade Volume, and the threat of Hurricane Isaias to US Gulf of Mexico production. Prices pared some gains after President Trump stated the US would not attack Iran before the midterm elections. Gold prices edged up 0.4% to $4,158.2 per ounce, recovering from a two-month low.

Macroeconomics

Fed September meeting minutes indicated broad support for the recent interest rate hike, with most officials foreseeing another hike by year-end, though reasons for tightening varied. The New York Fed's Survey of Consumer Expectations showed one-year inflation expectations rising to 3.9% in September, the highest since May 2023. India's central bank raised its policy repo rate by 25 basis points to 5.50%, its first hike in nearly four years. China's central bank continued its gold-buying streak for the 23rd consecutive month, adding 740,000 ounces in September. The International Energy Agency (IEA) supported accelerating the release of previously committed oil reserves, prioritizing diesel.

Major Stock Markets

U.S. equities closed lower, retreating from recent record highs, with the S&P 500 down -0.2% to 7802, the Nasdaq Composite down -0.2% to 27539, and the Dow Jones Industrial Average down -0.7% to 51180. The Russell 2000, representing small-cap names, saw a more significant decline of 1.31%. European markets also closed lower, notably the Euro Stoxx 50 down 1.47%, Germany's DAX down -1.3% to 25104, and France's CAC down -1.2% to 7769, reaching its lowest level since March 2026, as concerns over sovereign debt and political uncertainty weighed on sentiment. Asian markets were mostly weaker, with Japan's Nikkei 225 down -0.9% to 70036 and Hong Kong's Hang Seng Index down -0.6% to 24131.

Major Government Bonds

Global government bond yields generally moved higher, with the U.S. 10-year Treasury yield initially spiking to a 24-year high of 5.365% before retreating to close up 0.01 percentage points to 5.3% following a well-received $39 billion auction. The 2-year Treasury yield, sensitive to Fed policy, declined by about 3 basis points to 4.77%. In Europe, the French 10-year government bond yield rose by 0.11 percentage points, or 12 basis points, to 4.87%, reflecting ongoing fiscal concerns and political uncertainty. The U.S. Dollar Index (DXY) was up 0.4% to 102.3, reaching its highest level since April 2025, largely due to elevated U.S. yields and European weakness, with the Euro down -0.5% to 1.120 against the dollar, reaching its lowest level since May 2025.

Major Commodities

Oil prices eased after an initial rise, following the International Energy Agency's (IEA) support for accelerating the release of strategic oil reserves, particularly diesel. WTI crude futures settled down -0.6% to $88.9 per barrel, and Brent crude fell 0.38% to $100.20 per barrel. Gold prices declined, pressured by a stronger U.S. dollar and higher Treasury yields, down -1.2% to $4,136.2 per ounce, reaching a two-month low. Silver also saw a significant drop of 2.54%.

Macroeconomics

The U.S. International Trade in Goods & Services widened to $105.6 billion in August, marking its largest gap since March 2025, driven by record imports including US - Crude Oil Imports & Exports, Gold, and AI chips. Meanwhile, private employers in the U.S. added an average of 23,750 US - Nonfarm Payrolls over the past four weeks, the highest since June. In the Eurozone - Retail Sales, August retail sales saw a modest month-on-month increase of 0.1%, an improvement from the prior month but still below expectations, indicating continued mild consumer momentum.

Major Stock Markets

U.S. equity markets extended gains, with the S&P 500 rising 0.6% to close at a record high of 7819 and the NASDAQ Composite Index advancing 0.5% to a record high of 27600, as bond yields eased and oil prices stabilized. Leadership was broad-based across sectors, with significant contributions from technology and AI-related stocks, exemplified by Marvell's substantially raised revenue guidance and Constellation Energy's surge on a major nuclear power deal with Google. European markets also closed higher, with the Euro Stoxx 600 gaining 0.5%, Germany DAX Index up 0.8% to 25449, and the UK's FTSE 100 increasing 0.4% to 10542.

Major Government Bonds

Major government bond yields retreated from recent highs, with the US - 10-Year Treasury Note Yield falling -0.04 percentage points to 5.3% and the US 2-year Treasury Note Yield declining to around 4.80%. This movement was largely attributed to a pause in the surge of yields, reduced expectations for near-term policy tightening, and stabilized oil prices. European sovereign bond markets also saw some relief, as the Germany 10-year Bond Yield eased down -0.01 percentage points to 3.5% and France - 10-Year Government Bond Yield saw a notable decline, easing concerns about the euro area's debt market pressure.

Major Commodities

Commodity markets showed mixed performance, with WTI Crude Oil prices rising 0.4% to $89.8 per barrel, after earlier volatility. While Brent Crude Oil finished slightly higher at $100.58 per barrel, as the market weighed increased Middle Eastern exports and planned emergency reserve releases against ongoing supply concerns. Gold prices advanced, rising 0.9% to settle at $4193.9 per ounce, supported by the retreat in U.S. Treasury yields and a weaker US Dollar Index, which was down -0.3% to 101.9.

Macroeconomics

The US services sector continued its expansion in September, with the ISM Services PMI registering 54.9, slightly below the prior month but indicating healthy activity. However, the Prices Paid Index accelerated to 74.0, its highest level since June 2022, signaling rising cost pressures. The Employment Index improved to 50.1, returning to expansion. In Europe, political uncertainty intensified as Spain's Prime Minister announced a snap election for November 29, 2026, adding to existing concerns over France's fiscal outlook.

Major Stock Markets

Major global stock markets advanced, with US equities leading the charge as the Nasdaq Composite surged 1.0% to a fresh record high of 27477, driven by strong performance in AI-related technology stocks. The S&P 500 also gained 0.7% to 7774, while the Dow Jones Industrial Average rose 0.2% to 51268. European markets saw mixed results, with the Euro Stoxx 50 up 0.04% and the FTSE 100 gaining 0.3% to 10498, though France's CAC40 notably declined -0.8% to 7834, reaching a record low amidst domestic fiscal concerns. In Asia, Japan's Nikkei 225 rose 2.4% to 69947, reaching a record high and Taiwan's Taiex gained 2.6% to 49712, reaching a record high, while Hong Kong's Hang Seng Index rose 0.3% to 24040.

Major Government Bonds

US government bond yields remained elevated, with the benchmark 10-year Treasury yield rising 0.03 percentage points to 5.3%, touching a record high since April 2002, and the 30-year Treasury yield reaching 5.66%, both touching multi-year highs. The 2-year Treasury yield was around 4.82%. In Europe, government bond yields continued to face pressure, with Spanish 10-year yields rising and the spread between French and German bond yields showing tentative signs of stabilization after last week's widening, reflecting ongoing fiscal and political concerns in the region.

Major Commodities

Oil prices retreated, with WTI crude settling around $89.2 per barrel, down -2.1%, and Brent crude around $100.32 per barrel, as Saudi export flows reportedly recovered and G7 nations released oil stocks, offsetting geopolitical concerns. Gold prices rose 0.2% to hover around $4,170.7 per ounce, while silver saw gains of over 1%.

Macroeconomics

The U.S. labor market showed signs of cooling, with September US - Nonfarm Payrolls vs. Unemployment Rate increasing by a softer-than-expected 29,000 jobs, significantly below the 90,000 consensus. The US - Nonfarm Payrolls vs. Unemployment Rate edged up to 4.2% from 4.1%, while US - Average Hourly Earnings vs. Employment Cost Index rose 3.0% year-over-year, the lowest since May 2021. This data, coupled with comments from Fed officials indicating no urgency for further tightening, led to a sharp reduction in market expectations for an October rate hike, with probabilities falling to approximately 23%.

Major Stock Markets

Major U.S. equity indices reacted positively to the softer jobs data, with the S&P 500 closing higher by 0.7% to 7723, the Dow Jones Industrial Average closing higher by 0.5% to 51177, and the NASDAQ Composite Index closing higher by 1.2% to 27191. Technology and mid-cap stocks notably outperformed, with all S&P 500 sectors except healthcare ending in positive territory. European markets, however, generally closed lower, and Hong Kong's Hong Kong Hang Seng Index experienced a significant decline, falling down -2.6% to 23972 and breaking below 24,000.

Major Government Bonds

U.S. Treasury yields experienced volatility, initially declining after the jobs report but later reversing course. The benchmark US - 10-Year Treasury Note Yield, after touching an intraday high of 5.34%, ended the day up 0.04 percentage points to 5.3%, near its highest level since 2002 and marking its fifth consecutive weekly increase. The US 2-year Treasury Note Yield also saw an initial dip followed by a rebound, ending around 4.82%, as persistent inflation concerns and solid growth prospects continued to weigh on the bond market.

Major Commodities

WTI Crude Oil prices ended lower, with WTI Crude Oil dropping down -1.7% to settle at $91.3 per barrel and Brent Crude Oil slipping to $102.25 per barrel. This decline was largely driven by news that G7 nations plan to release up to 100 million barrels of emergency oil and diesel stocks over four months to help curb surging fuel prices. Gold prices fell down -0.7% to $4,172.1 an ounce, marking a 3.6% weekly loss, while Silver also declined 1.24% to $60.42 an ounce, down 6.7% for the week.

September Job Report Highlights

The U.S. job market showed signs of slowing in September, with nonfarm payrolls increasing by 29,000, significantly below the forecast of 89,000 and the previous month's increase of 133,000. The unemployment rate rose to 4.2%, surpassing both the previous and forecasted rate of 4.1%.

Components Details

The mining and logging sector saw a decrease of 2,000 jobs, reversing the previous month's gain of 3,000. The information sector also reported a decline, losing 10,000 jobs compared to a loss of 18,000 in the prior month. Financial activities shed 7,000 jobs, an improvement from the previous month's loss of 9,000. Professional and business services experienced a reduction of 9,000 jobs, following a decrease of 5,000 jobs in August. Government employment saw a significant drop of 17,000 jobs, a stark contrast to the previous month's gain of 44,000. Conversely, the retail trade sector rebounded with an increase of 5,800 jobs, compared to a loss of 5,100 jobs in the previous month. Education and health services added 20,000 jobs, down from 38,000 in August, while leisure and hospitality gained 10,000 jobs, a decrease from the previous month's 37,000.

Macroeconomics

US Initial & Continuing Jobless Claims fell to 197,000, below expectations, while continuing claims dropped to a three-year low of 1.70 million, indicating a healthy labor market. Manufacturing data showed continued expansion, with the S&P U.S. Manufacturing PMI at 55.9 and ISM Manufacturing PMI at 54.5, although the US - ISM Manufacturing & Services PMI - Prices Index jumped significantly to 77.9, suggesting persistent cost pressures. However, Federal Reserve Vice Chair Jefferson and other officials signaled a patient approach to future policy adjustments, suggesting more time is needed to assess data and tempering expectations for an immediate rate hike.

Major Stock Markets

US equity markets closed mostly higher, with the S&P 500 posting a modest gain of 0.2% to 7667, while the Dow Jones Industrial Average closed at 50927 and the NASDAQ Composite at 26872, as the technology and energy sectors led the advance. This rebound followed an early session dip, partly aided by retreating bond yields and dovish signals from Federal Reserve officials. In contrast, European stock markets ended mostly lower, while Asian bourses were mixed, with Japan's Nikkei 225 Index surging 3.3% to 68957 and South Korea's KOSPI Index adding 2.0% to 6971.

Major Government Bonds

US Treasury yields retreated across the curve, with the benchmark US - 10-Year Treasury Note Yield falling down -0.04 percentage points to 5.2% after briefly touching a 24-year high of 5.34% earlier in the session. The US 2-year Treasury Note Yield also declined to 4.804%. This pullback in yields was largely attributed to Federal Reserve officials signaling a more patient approach to monetary policy, easing immediate rate hike concerns and providing relief to interest-rate sensitive assets. European and UK bond yields also saw declines.

Major Commodities

Crude oil prices surged significantly, with WTI Crude Oil rising 3.0% to $93.2 per barrel and Brent Crude Oil rising to $102.31 per barrel, driven by reports of China suspending fuel exports for October and heightened geopolitical tensions in the Middle East, including increased US troop deployments. Meanwhile, precious metals saw gains, with Gold advancing 0.5% to $4205.6 per ounce and Silver rising 1%.

Highlight

The Institute for Supply Management (ISM) released its Manufacturing Purchasing Managers' Index (PMI) for September, which came in at 54.5, slightly below the forecast of 54.8 and the previous month's reading of 54.6. This indicates a slower pace of growth in the manufacturing sector than anticipated.

Components

• New Order: Increased to 55.3 from 53.7, showing a rise in demand.
• Production: Decreased to 56.7 from 58.3, indicating a slowdown in manufacturing output.
• Employment: Rose to 52.7 from 51.2, suggesting an improvement in hiring.
• Inventories: Dropped to 48.6 from 50.6, reflecting a reduction in stock levels.
• Customers' Inventories: Fell to 41.6 from 42.8, indicating that customers' inventory levels are considered too low.
• Price: Jumped significantly to 77.9 from 71.1, highlighting increased cost pressures.
• Backlog of Orders: Increased to 56.4 from 51.8, showing a rise in unfulfilled orders.
• Exports: Declined to 50.9 from 53.2, indicating a decrease in international demand.
• Imports: Decreased to 51.0 from 52.5, reflecting a reduction in import activity.

Macroeconomics

US headline Personal Consumption Expenditures (PCE) price index rose 0.3% month-over-month in August, below expectations, with the year-over-year rate easing to 3.4%. Core PCE inflation also moderated to 0.25% month-over-month and 3.0% year-over-year, both below forecasts. Despite cooler inflation, second-quarter real GDP growth was revised up to a 2.2% annualized rate, and real consumer spending increased a solid 0.6% in August. Private-sector employment, as reported by ADP, showed a gain of 90,000 jobs in September, exceeding expectations. China's official Manufacturing PMI rose to 50.1% and Non-Manufacturing PMI to 50.2% in September, both entering expansion territory.

Major Stock Markets

US equity markets finished mixed, with the Dow Jones Industrial Average falling -0.9% to 50906 and the S&P 500 down -0.3% to 7652, while the Nasdaq Composite managed a 0.2% gain to 26861, largely supported by resilience in the technology sector and select large-cap names. European major indices closed lower across the board, with the Euro Stoxx 50 down 0.81%. Asian markets were mixed, seeing the Nikkei 225 rise 1.9% to 66754 and the Shanghai Composite gain 0.31%, while the Australian ASX 200 advanced 0.9% following softer local inflation data.

Major Government Bonds

US Treasury yields resumed their upward climb, with the benchmark 10-year Treasury yield rising 0.03 percentage points to 5.3%, reaching a record high. The 30-year Treasury yield also climbed to 5.63%, marking a multi-year high, reflecting persistent concerns over economic strength and fiscal financing needs despite moderating inflation data. The 2-year Treasury yield ended at 4.89%. Global government bonds recorded their worst quarterly performance since late 2024.

Major Commodities

International oil prices extended gains, with WTI crude settling up 1.0% at $90.3 per barrel and Brent crude rising 0.92% to $103.53 per barrel, driven by ongoing Middle East supply uncertainties. Gold prices reversed earlier declines to close up 0.3% at $4,190.4 per ounce, pressured by elevated real yields and a stronger dollar. Silver also declined by 1.69% to $60.43 per ounce, while COMEX 10月期铜 rose 1.5% to $6.6 per pound.

Macroeconomics

Macroeconomic data revealed a softening labor market and consumer sentiment, with August JOLTS job openings declining to 7.1 million and the September Consumer Confidence Index falling to 81.9, its lowest since 2014. Federal Reserve officials offered mixed signals; New York Fed President Williams suggested no urgency for further rate hikes after the September action, potentially only one more later this year, which tempered market expectations for an October hike to about 50%. However, Governor Barr reiterated the need for further tightening due to persistent inflation drivers like high energy prices and AI-related capital expenditure. Internationally, the Reserve Bank of Australia unanimously raised its cash rate by 25 basis points to 4.60% amid resilient domestic demand and escalating energy costs, while China introduced mortgage subsidies and expanded credit support.

Major Stock Markets

Major U.S. stock indices closed modestly lower, with the Dow Jones Industrial Average down -0.3% to 51350, a record low, the S&P 500 down -0.2% to 7671, and the Nasdaq Composite down -0.1% to 26798, primarily pressured by rising long-term bond yields. AI-related technology stocks showed relative resilience, with the semiconductor sector rising 1.3% to 12629. European markets were mixed, as the Euro Stoxx 50 gained 0.3% and the German DAX rose 0.1% to 25399, while the UK FTSE 100 fell down -0.5% to 10637 and France CAC 40 fell down -0.5% to 8036, a record low. Asian equities also saw varied performance, with Hong Kong's Hang Seng index down -0.5% to 24524 and South Korea's KOSPI down -0.3% to 6871, though mainland Chinese indices posted small gains.

Major Government Bonds

Government bond markets saw continued pressure on the long end, leading to a steepening of the yield curve. The U.S. 10-year Treasury yield edged down -0.01 percentage points to settle at 5.2%, while the 30-year Treasury yield surged to 5.619%, marking its highest level since 2002. In contrast, shorter-term yields, such as the 2-year Treasury yield, moved modestly lower to approximately 4.885%, finding some reprieve after comments from New York Fed President Williams. German 10-year government bond yields declined down -0.03 percentage points to 3.6%.

Major Commodities

Crude oil prices experienced a significant decline, with WTI crude down -4.2% to $88.7 per barrel and Brent crude retreating 3.03% to $95.44 per barrel. This downward movement was attributed to the U.S. announcing plans to release 40 million barrels from its Strategic Petroleum Reserve, reports of Saudi Arabia restoring partial capacity to its East-West pipeline, and ongoing mediation efforts in U.S.-Iran talks. Meanwhile, gold prices rebounded after hitting seven-week lows, rising up 1.1% to $4214.8 per ounce, alongside a 1.37% gain for silver.

Eurozone Economic Sentiment Indicator Falls Short

The Eurozone Economic Sentiment Indicator for September recorded a value of 97.9, falling short of the forecasted 99.0 and down from the previous month's 98.4. This marks a decline in economic sentiment across the Eurozone, signaling potential concerns about the region's economic outlook.

Main Countries and Sectors Details

• Germany: The indicator rose to 95.0, up from 94.4, reaching its highest level since May 2023.
• France: Recorded a decrease to 96.2 from 97.9.
• Greece: Increased to 107.6 from 106.9.
• Italy: Fell to 99.8 from 100.6.
• Spain: Notably rose to 105.5 from 102.1.

Sector Confidence Indicators

• Industrial Confidence: Improved to -3.8 from -5.0, the highest level since April 2023.
• Services Confidence: Increased to 6.1 from 5.6.
• Consumer Confidence: Declined to -16.5 from -15.5.
• Retail Confidence: Slightly decreased to -6.4 from -6.3.
• Construction Confidence: Remained unchanged at -5.0.

Macroeconomics

US-Iran negotiations remained stalled, contributing to heightened inflation concerns, while Fed Governor Cook noted that AI investment, energy costs, and wealth effects could continue to push inflation higher. The Dallas Fed manufacturing index printed at 9.8, below the 12.0 consensus, though outlook and employment components improved. In Europe, ECB President Lagarde indicated that significantly higher long-term interest rates would slow economic growth and curb inflation, leading to a "measured response" from the central bank, with market expectations for an October ECB rate hike falling below 40%. China's industrial profits increased by 15.7% year-on-year from January to August.

Major Stock Markets

Major US equity indices closed lower, with the S&P 500 declining down -0.8% to 7684, the Dow Jones Industrial Average falling down -0.7% to 51482, and the Nasdaq Composite dropping down -0.9% to 26820, as rising bond yields and energy prices weighed on risk appetite. European markets were largely flat to slightly down, with the Euro Stoxx 600 unchanged. Asian markets mostly retreated, notably the Kospi plunging down -2.7% to 6890 and the CSI 300 falling down -2.2% to 4341, marking a record low since 2025. In the technology sector, Meta experienced a significant decline of nearly 5%, while Nvidia bucked the trend, rising approximately 2% following an announcement of a substantial increase in its share buyback program.

Major Government Bonds

Government bond yields surged globally, with the benchmark 10-year US Treasury yield rising up 0.07 percentage points to 5.2%, marking a record high since 2007, as inflation fears intensified and hawkish comments from Fed officials persisted. The 2-year US Treasury yield also increased by 8 basis points to 4.93%. European bond markets followed suit, with the German 10-year Bund yield up 0.02 percentage points to 3.6%, marking a record high since 2009 and the UK 10-year gilt yield rising 6 basis points to 5.42%.

Major Commodities

Oil prices ended higher, albeit after significant intraday volatility, as ongoing US-Iran tensions and supply concerns kept markets on edge; WTI crude settled up 1.1% at $93.4 per barrel, while Brent crude rose 0.9% to $105.28 per barrel. Conversely, precious metals experienced a sharp sell-off, with gold tumbling down -3.9% to $4,154.4 per ounce and silver falling 4.8%, primarily driven by the surge in real yields and a stronger US dollar.

Macroeconomics

US economic data showed resilience, with August US - Durable Goods Orders unchanged and core capital goods orders rising a healthy 1.6%, indicating solid business investment. The University of Michigan's final September consumer sentiment registered 48.1, while 1-year inflation expectations rose to 4.6%. US - Initial & Continuing Jobless Claims unexpectedly fell to 197,000. Federal Reserve officials, including Williams, reiterated that another rate hike by year-end remains reasonable to combat inflation. US-China trade discussions continued, with leaders meeting and a trade truce extended by two months.

Major Stock Markets

Major U.S. equity markets closed higher, with the Dow Jones Industrial Average gaining 0.9% to 51829, the S&P 500 rising 0.5% to 7743, and the NASDAQ Composite Index advancing 0.5% to 27069. This rally was supported by easing oil prices, stabilizing Treasury yields, and robust economic data, particularly benefiting large-cap technology stocks. European stock markets also saw gains, with the Stoxx 600 Index closing up 0.35%.

Major Government Bonds

U.S. Treasury yields eased on Friday after a week of significant volatility, driven by inflation concerns and hawkish Federal Reserve commentary. The benchmark US - 10-Year Treasury Note Yield closed slightly lower, down -0.03 percentage points, to 5.2%. The US 2-year Treasury Note Yield also declined, settling at 4.85%.

Major Commodities

Oil prices experienced a notable decline amid reports of potential U.S.-Iran negotiations and a proposed plan to reopen the Strait of Hormuz. US WTI Crude Oil Futures fell down -2.3% to settle at $92.4 per barrel, while Brent crude futures dropped 2.14% to $104.32 per barrel. US Gold Futures, in contrast, rose 0.5% to $4,320.5 per ounce, though the precious metal still recorded a weekly loss.

Market Highlights

The September MM Fundamental Index reports significant movements across various global markets. Notably, US stocks have reached their lowest level since September 2020, with the latest stats at 2.04, down from 2.18. Taiwan stocks also hit a low not seen since April 2025, dropping to 1.21 from 1.41. Meanwhile, emerging market stocks have plummeted to their lowest since November 2024, with a significant drop to -1.36 from 1.14.

Components Details

• US Stock: Latest Stats 2.04 / Previous Stats 2.18 / Lowest Level Since 2020 September
• Taiwan Stock: Latest Stats 1.21 / Previous Stats 1.41 / Lowest Level Since 2025 April
• Emerging Market Stock: Latest Stats -1.36 / Previous Stats 1.14 / Lowest Level Since 2024 November
• High Yield Bond: Latest Stats -3.28 / Previous Stats -1.49 / Lowest Level Since 2022 November
• US Dollar: Latest Stats -1.19 / Previous Stats 0.08
• EUR: Latest Stats 1.29 / Previous Stats 1.83 / Lowest Level Since 2025 February
• Oil: Latest Stats -4.2 / Previous Stats -3.98
• Taiwan Dollar: Latest Stats 7.14 / Previous Stats 6.49

Macroeconomics

Global macroeconomic sentiment remained dominated by inflation concerns and hawkish central bank rhetoric. US initial jobless claims unexpectedly fell to 197,000, a historically low level, while continuing claims were 1.719 million. August new home sales surged to 684,000, significantly above expectations, and business activity expanded at its fastest pace since 2021, indicating robust economic growth. Several Federal Reserve officials reiterated support for further rate hikes this year, citing persistent inflation risks and strong economic momentum. In a positive development, the US and China agreed to extend their trade truce by two months, through January 10. Germany's Ifo Business Climate Index also improved to 90.4 in September.

Major Stock Markets

Major global stock markets ended mixed to little changed, as persistent inflation anxiety and soaring bond yields weighed on investor sentiment. The Dow Jones Industrial Average declined by -0.3% to 51350, reaching its lowest level since June 15, 2026, while the S&P 500 closed down a marginal -0.0% to 7704, and the Nasdaq Composite saw a slight gain of 0.0% to 26939. Underlying market breadth was generally weak, with small-cap stocks underperforming due to rising borrowing costs. European equities also finished modestly lower, with the Euro Stoxx 50 down 0.4% and the UK FTSE 100 down -0.2% to 10680. In Asia, the Nikkei 225 rose 0.8% to 65514 following a holiday, while the Hang Seng Index fell -0.3% to 24761.

Major Government Bonds

Government bond yields surged globally, with US Treasuries reaching multi-decade highs. The 10-year Treasury yield climbed 0.1 percentage points to 5.2%, reaching its highest level since 2007, and the 30-year Treasury yield reached 5.483%, a level not seen since 2004. The 2-year Treasury yield also rose to 4.928%, contributing to a bear-steepening of the yield curve. Demand for US Treasuries was weak, with a 7-year note auction tailing and a Treasury buyback operation falling short of its maximum target. Japanese 10-year government bond yields also jumped 0.1 percentage points to 3.1%, marking a new high since 1996, and Australian 10-year government bond yields moved higher by 12 basis points.

Major Commodities

Oil prices saw a significant rally, driven by escalating geopolitical tensions in the Middle East and renewed supply concerns. WTI crude futures settled up 2.7% at $94.6 per barrel, while Brent crude futures climbed 3.41% to $106.60 per barrel, with refined products like diesel surging to record highs. Initial reports of potential US-Iran talks to reopen the Strait of Hormuz briefly tempered gains, but prices rebounded as markets looked past these preliminary announcements. Gold prices, however, edged lower by -0.2% to $4308.9 per ounce, failing to attract safe-haven demand as a stronger US dollar, which rose 0.2% to 101.3, and rising bond yields weighed on the precious metal.

Macroeconomics

Strong U.S. economic data, with the September S&P Global U.S. Composite PMI rising to 58.4, the highest level since July 2021, fueled concerns about persistent inflation and further monetary tightening. Federal Reserve Governor Barr reinforced this sentiment, indicating that additional policy adjustments might be necessary. While the Eurozone's composite PMI also improved to 53.1, price pressures, particularly from increased input costs, remained a significant concern across major economies.

Major Stock Markets

Major global stock markets experienced a broad-based decline as surging bond yields and renewed inflation concerns weighed heavily on investor sentiment. U.S. equities closed lower, with the S&P 500 falling -0.8% to 7706, the Dow Jones Industrial Average down -0.7% to 51512, and the NASDAQ Composite Index dropping -1.1% to 26936, as rate-sensitive and growth sectors faced significant pressure. European indices also retreated, though the UK FTSE 100 remained largely unchanged, closing at 10705, while the energy sector was a notable outperformer amidst rising oil prices.

Major Government Bonds

Government bond markets saw a significant sell-off, pushing yields to multi-year highs across major economies. The US - 10-Year Treasury Note Yield surged 0.15 percentage points to 5.1%, reaching its highest level since July 2007, while the 5-year yield surpassed 5% for the first time since 2007, partly due to weak demand at its $70 billion auction. European long-term bond yields also climbed, with the Germany 10-year Bond Yield rising 0.10 percentage points to 3.5%, its highest level since June 2009, reflecting intensified expectations for higher interest rates.

Major Commodities

Crude oil prices rebounded sharply, with WTI Crude Oil gaining 2.4% to $92.7 per barrel and Brent Crude Oil surging 4.88% to $103.42 per barrel, driven by renewed concerns over Middle East supply disruptions following comments from an Iranian official regarding the IMF - Strait of Hormuz - Daily Transit Calls & Transit Trade Volume. Conversely, precious metals declined, with spot Gold falling -1.1% to $4328.5 per ounce and Silver dropping 3.83%, as the strengthening US Dollar Index, which rose 0.5% to 101.1, and rising bond yields diminished their appeal.

Eurozone PMI Overview

The Eurozone's Purchasing Managers' Index (PMI) for September has shown stronger-than-expected performance across both manufacturing and services sectors. The Manufacturing PMI remained steady at 52.7, slightly above the forecast of 52.6. The Services PMI rose to 53.0, surpassing both the previous figure of 51.6 and the forecast of 51.4. The Composite PMI, which combines both sectors, reached 53.1, marking the highest level since April 2023.

European Countries PMI Details

Germany's Manufacturing PMI saw a slight decline to 53.8 from 54.3. However, the Services PMI improved significantly, climbing to 52.9 from 49.7. In France, the Manufacturing PMI decreased to 50.3 from 51.1, while the Services PMI rose to 51.4 from 48.0. These figures indicate a mixed performance in the manufacturing sector but a notable improvement in services across the major European economies.

Macroeconomics

U.S. private employers added an average of 20,000 jobs per week for the four weeks ending September 5, up from 16,750 in the previous report, with the unemployment rate steady at 4.1%. Market-implied 10-year inflation expectations in Treasury Inflation Protected Securities (TIPS) declined by 5-10 basis points, suggesting easing inflation concerns. The Richmond Fed manufacturing index, however, fell from 4 to -2 in September, while Eurozone consumer confidence edged lower to -16.5.

Major Stock Markets

U.S. equity markets closed mixed, with the Nasdaq Composite advancing 0.45% to a new record high of 27244, primarily driven by continued strength in semiconductor stocks. The S&P 500 remained largely unchanged, closing at 7765, while the Dow Jones Industrial Average was down -0.4% to 51864, pressured by a notable 2.0% drop in financial shares. European and Asian markets generally ended higher, with the Euro Stoxx 50 gaining 0.1% and the Nikkei 225 up 1.38%.

Major Government Bonds

U.S. Treasury yields were largely flat to slightly lower, with the benchmark 10-year Treasury yield settling at 5.0%, down -0.01 percentage points. The 2-year Treasury yield was little changed at 4.756%, though it touched a two-year high earlier in the session. Market-implied 10-year inflation expectations in TIPS markets decreased by 5-10 basis points, reflecting an easing of inflation concerns.

Major Commodities

Crude oil prices extended their recent decline for a fifth consecutive session, with WTI crude was down -2.7% to $89.9 per barrel and Brent crude dropping 1.09% to $99.25 per barrel, marking its first close below $100 since September 8. This downturn was driven by reports of Saudi Arabia's East-West pipeline restart progress and diplomatic hopes between the U.S. and Iran regarding the Strait of Hormuz. Gold prices saw a modest rise of 0.4% to $4401.8 per ounce, while copper continued its rally, increasing 3.3% to $6.9, reaching a record high.

Macroeconomics

Optimism regarding US-China trade discussions and potential US-Iran diplomatic engagement eased geopolitical tensions, though Federal Reserve officials maintained a hawkish stance, with Chicago Fed President Goolsbee and St. Louis Fed President Musalem suggesting further rate hikes may be necessary to combat US - Consumer Price Index (CPI). Meanwhile, US diesel retail prices reached a new record, surpassing $6.50 per gallon, while the EU extended sanctions on Russia for 36 months.

Major Stock Markets

US major stock markets surged, with the S&P 500 rising 1.5% to 7765 and the NASDAQ Composite Index gaining 2.3% to close at a record high of 27122, driven by strong performance in technology and AI-related sectors. The Dow Jones Industrial Average also advanced 0.7% to 52049. European equities followed suit, with the Stoxx 600 Index climbing 1.0% and Germany DAX Index up 1.1% to 25575.

Major Government Bonds

Major government bond yields declined, with the US - 10-Year Treasury Note Yield falling -0.04 percentage points to 5.0%, reflecting reduced inflation concerns following the drop in oil prices. Europe - 10-Year Bond Yield also saw declines, with Germany 10-year Bond Yield down -0.07 percentage points to 3.5%.

Major Commodities

Oil prices experienced a significant decline, with WTI Crude Oil falling down -4.5% to $91.8 per barrel and Brent Crude Oil dropping around 3.4% to $100.34 per barrel, largely due to hopes for diplomatic progress in the Middle East and increased Saudi oil exports. Gold also retreated, declining down -0.9%.

Highlight

The global economic expectation index for September recorded a slight increase, reaching 2.6%, up from the previous 2.57%.

Components

• US: The index remained stable at 2.11%.
• Eurozone: Saw an increase to 1.2% from 1.07%.
• UK: Matched the Eurozone with a rise to 1.2% from 1.07%.
• Germany: Slightly up to 1.08% from 1.03%.
• Japan: Increased to 0.8% from 0.77%.
• China: Decreased to 4.47% from 4.53%.
• Italy: Dropped to 0.75% from 0.83%.
• Taiwan: Notable increase to 6.5% from 6.36%.
• India: Marginal increase to 6.98% from 6.97%.
• Canada: Rose to 1.54% from 1.43%.
• Indonesia: Slight increase to 5.05% from 5.03%.
• South Korea: Increased to 2.72% from 2.67%.
• Singapore: Rose to 3.5% from 3.43%.
• Malaysia: Slight decrease to 4.8% from 4.83%.

Macroeconomics

Major central banks were active, with the Federal Reserve hiking its policy rate by 25 basis points to a range of 3.75% to 4%, signaling a hawkish stance with expectations for another increase this year. The Bank of Japan also raised its policy rate by 25 basis points to 1.25%, the highest since 1995, though the yen weakened due to internal dissent regarding future tightening. The Bank of England, meanwhile, held its interest rates steady at 3.75% and announced the cancellation of its long-term bond selling program. On the data front, US August retail sales surpassed expectations, while August industrial output remained unchanged. French 10-year government bond yields rose significantly to 4.56%, marking their highest level since 2008 and widening the spread against German bonds.

Major Stock Markets

Major US equity indices closed mixed, with the Nasdaq posting a slight gain of 0.4% to 26523 and the S&P 500 up 0.2% to 7651, primarily driven by strength in semiconductor and AI-related stocks. The Dow Jones Industrial Average, however, finished marginally lower, down -0.2% to 51683. For the week, the Nasdaq gained 0.7%, the S&P 500 declined 0.1%, and the Dow dropped 1.7%. European stock markets generally retreated amid concerns over French fiscal stability, while Asian markets, including Japan, which advanced 1.4% to 65019, and South Korea, up 2.7% to 6894, advanced, with technology and semiconductor sectors leading the charge.

Major Government Bonds

US Treasury yields saw an upward trend, with the benchmark 10-year yield settling at 5.0%, up 0.05 percentage points, and the 2-year yield reaching a new 52-week high of 4.741%, reflecting continued market adjustments to central bank policy. This led to a flattening of the yield curve. In Europe, government bond markets faced pressure, particularly in France, where the 10-year yield climbed 12 basis points to 4.56%, its highest level since 2008. The spread against German bunds, whose 10-year yield rose 0.04 percentage points to 3.5%, widened significantly.

Major Commodities

International oil prices declined for a third consecutive day, with WTI crude settling at $99.5 per barrel, down -2.3%, and Brent crude at $103.87, though prices remained elevated amid ongoing Middle East supply concerns and record-high US diesel prices. Gold and silver prices both advanced, with gold settling at $4,415.9 an ounce, up 0.4%, and silver at $67.15 an ounce. Industrial metals saw gains, with copper settling at $6.7, up 2.0%, recording its eleventh weekly rise out of twelve, while Bitcoin surged 6.4% to 81280.7, its highest level since May 12, 2026, partly driven by regulatory developments concerning tokenized stocks.

Macroeconomics

US economic data showed mixed signals with initial jobless claims falling to a two-year low of 196,000 and continuing claims reaching 1.73 million, indicating labor market resilience. However, housing starts declined to 1.27 million, and building permits also fell to 1.39 million, suggesting weakness in the housing sector. The Philadelphia Fed manufacturing index eased to 37.8 but remained strong. Globally, the Bank of England held its policy rate steady at 3.75% for the sixth consecutive meeting and announced the cancellation of its long-dated gilt sales plan, while expecting CPI to rise to 3.75% in Q4 2026 and above 4.00% in Q1 2027.

Major Stock Markets

Major global stock markets saw a broad rebound, with U.S. equities posting significant gains as the S&P 500 rose 1.1% to 7638, the Nasdaq Composite climbed 1.7% to 26418, and the Dow Jones Industrial Average added 0.6% to 51778. This marked the best session for the S&P 500 and Nasdaq since early August, driven by strength in technology, semiconductor, and AI-related sectors. European markets also advanced, with the FTSE 100 gaining 1.2% to 10816 and the Euro Stoxx 50 up 0.9%, while Asian markets were mixed.

Major Government Bonds

U.S. Treasury yields retreated across the curve, with the benchmark 10-year Treasury yield falling 0.07 percentage points to 4.9%, moving back below the 5% threshold after an extended rise. The 2-year Treasury yield also declined by over 7 basis points to 4.675%. This broad bond market rally was attributed to easing inflation concerns and investor comfort with central bank policy signals. European bond yields also saw declines, including a 7 basis point drop in UK 10-year gilt yields.

Major Commodities

Crude oil prices extended their recent pullback for a second consecutive day, with WTI crude settling at $101.0 per barrel, down -1.4%, as reports of potential increased Saudi supply and de-escalation efforts in the Middle East eased supply disruption fears. Concurrently, precious metals saw a decline, with spot gold down -0.1% to $4381.2 per ounce, and silver climbing 3.49%. Industrial metals also gained, with copper rising 2.8% to $6.6 per pound.

Macroeconomics

The Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%-4.00%, marking the first hike since 2023. The accompanying dot plot indicated a notably hawkish stance, with 16 of 18 officials projecting at least one more rate increase by year-end 2026. U.S. August US - Retail Sales Value significantly surpassed expectations, rising 1.2% month-over-month, with control group sales up 1.4%, signaling robust consumer spending despite rising interest rates and a decline in homebuilder sentiment.

Major Stock Markets

U.S. equity markets reacted negatively to the Fed's hawkish tone, with the Dow Jones Industrial Average down -1.2% to 51462, reaching a record low, and the S&P 500 down -0.5% to 7552, while the NASDAQ Composite Index remained largely unchanged. In contrast, European stock markets generally advanced, and Asian equities were mixed to higher, with the Japan Nikkei 225 Index gaining 0.7% to 63923 and the South Korea - KOSPI Index rising 1.4% to 6718.

Major Government Bonds

U.S. Treasury yields saw a mixed but generally upward movement, particularly on the short end of the curve, as investors priced in further tightening. The US 2-year Treasury Note Yield rose by 7 basis points to 4.749%, reaching its highest level since mid-2024, while the US - 10-Year Treasury Note Yield rose 0.03 percentage points to 5.0%, reaching a record high. The US Dollar Index surged 0.7% to 100.3, marking its best single-day gain in three months.

Major Commodities

Crude oil prices retreated sharply, with WTI Crude Oil down -3.5% to $102.1 per barrel and Brent Crude Oil declining 2.7% to $105.83 per barrel, following reports that Saudi Arabia aims to restore half the capacity of a key pipeline within days. Gold prices reversed earlier gains to close down -0.8% at $4300.0 per ounce, pressured by the stronger dollar and hawkish Fed outlook, while Silver also declined.

Retail Sales Growth

The latest data for US retail sales in August shows a significant increase, with a month-on-month (MoM) growth of 1.24%, surpassing the forecast of 0.8% and reversing the previous month's decline of 0.54%. Year-on-year (YoY), retail sales rose by 6.01%, up from 5.03% in the previous period.

Control Group Performance

The retail sales control group, which excludes more volatile categories, also showed strong performance with a MoM increase of 1.33%, well above the forecast of 0.4% and marking the highest level since September 2024. On a YoY basis, the control group sales grew by 5.63%, compared to 4.51% previously.

Components Details

• Sporting Goods saw a notable YoY increase to 10.74% from 9.99%.
• Electronics Appliance sales rose significantly YoY to 7.84% from 5.47%.
• Gasoline Stations experienced a sharp YoY rise to 20.96% from 17.07%.
• Furniture sales improved YoY to 1.93% from a previous decline of -2.71%.
• Health & Personal Care sales increased YoY to 1.91% from 0.43%.
• Nonstore Retailers reported a YoY growth of 9.88%, up from 8.32%.

Macroeconomics

The market was largely focused on the upcoming Federal Reserve interest rate decision, with expectations for a 25 basis point hike. Economic data showed mixed signals: the New York Fed's manufacturing index dropped significantly from 20.6 to 7.6, with new orders declining, though prices paid rose to 63.1. In China, August's industrial production increased by 5.2%, but retail sales grew modestly at 0.4%, and fixed asset investment for January-August fell by 7.2%, with real estate investment down 19.9%. Concerns over inflation and government debt led to reports that the Bank of England is considering ceasing the sale of long-term government bonds.

Major Stock Markets

Global equity markets experienced a broad decline, with major indices in the U.S., Europe, and Asia closing lower. In the U.S., the S&P 500 fell down -0.5% to 7586, the Dow Jones Industrial Average down -0.6% to 52093, and the Nasdaq Composite down -0.8% to 25982, as investors reduced risk ahead of the Fed's decision. European markets also saw modest declines, with the Euro Stoxx 50 down 0.3% and the FTSE 100 down -0.4% to 10658. While most sectors were under pressure, energy stocks were a notable exception, posting gains, and the US - PHLX Semiconductor Sector Index managed a slight rebound, up 0.4% to 11175 after recent instability, though crypto-related stocks plunged following the failure of a regulatory bill in the U.S. Senate.

Major Government Bonds

Government bond yields continued their upward trend globally, reaching multi-year highs. The US - 10-Year Treasury Note Yield climbed to 5.0%, a record high. The 30-year Treasury yield also rose to 5.37%, while a 20-year U.S. Treasury auction saw weak demand, with the yield reaching 5.42%. Elsewhere, the Germany 10-year Bond Yield increased to 3.5%, a record high, and longer-term Japanese government bond yields also moved higher, with the benchmark Japan 10-year Government Bond Yield moving higher by 0.1 percentage points to 3.0%, a record high. Australia 10-Year Government Bond Yield rose by 8bps to 5.42%.

Major Commodities

International oil prices surged significantly amid heightened supply concerns from the Middle East. US WTI Crude Oil Futures jumped up 3.8% to $105.3 per barrel, a record high. And Brent Crude Oil rose by 2.9% to $108.75 per barrel. This rally was fueled by reports of three Libyan oil fields halting operations, Saudi Arabia canceling some crude shipments to Europe, and the suspension of oil loading at Saudi Arabia's Red Sea port of Yanbu. Diesel prices also reached record highs. In precious metals, Gold prices edged lower, down -0.4% to $4335.0 per ounce, while Silver saw a modest gain.

Macroeconomics

Global markets were primarily influenced by concerns over the pace of AI development, with industry leaders calling for a slowdown, countered by former President Trump's opposition. Geopolitical tensions in the Middle East escalated following a Saudi pipeline closure and postponed diplomatic talks, pushing oil prices higher and intensifying inflation fears ahead of the Federal Reserve's anticipated rate hike this week. China reported August M2 at 356.81 trillion yuan (+7.5% YoY) and social financing at 23.91 trillion yuan cumulatively for the first eight months, down 2.64 trillion yuan YoY.

Major Stock Markets

Major global stock markets closed mostly lower, with U.S. indices like the S&P 500 fell -0.5% to 7620, Nasdaq Composite fell -0.6% to 26186, and Dow Jones Industrial Average fell -0.3% to 52421 all declining. The downturn was largely driven by fears of a slowdown in AI development, which heavily impacted semiconductor and related technology sectors, with the PHLX Semiconductor Sector Index (SOX) falling -5.9% to 11131. European markets were mixed, with the Euro Stoxx 50 falling 1.02% while the UK FTSE 100 gained 0.4% to 10698.

Major Government Bonds

Government bond markets saw a significant sell-off, with the U.S. 10-year Treasury yield rose 0.02 percentage points to 5.0% at close, reaching a record high for the first time since July 2007. The U.S. 2-year Treasury yield also climbed to 4.671%, reflecting heightened inflation concerns and strong expectations for a Federal Reserve rate hike this week. German 10-year Bund yields also advanced 0.03 percentage points, closing at 3.5%, a record high since June 2009.

Major Commodities

Commodity markets saw international oil prices climb, with WTI crude settling up 1.9% at $102.0 per barrel and Brent crude rising 1.41% to $103.16 per barrel, fueled by supply concerns from the Saudi pipeline closure and ongoing Middle East tensions. Conversely, precious metals declined as the U.S. dollar index strengthened 0.3% to 99.5 and bond yields rose, with spot gold falling down -1.6% to $4339.3 per ounce and silver down 1.96%.

Macroeconomics

US August core CPI rose 0.3% month-over-month, exceeding the 0.2% consensus, while headline CPI increased 0.4% monthly and 3.4% annually, both in line with expectations. Annually, core CPI was up 2.4%, the lowest since March 2021. Energy prices contributed to inflation, rising 2.1% for the month, with transportation services also up 0.5%. The University of Michigan's preliminary September consumer sentiment slipped to 47.8, and 1-year inflation expectations jumped to 4.6%. The European Central Bank raised its policy rate by 25 basis points, and following the US inflation data, futures markets now assign an approximately 85-90% probability of a Federal Reserve rate hike at its upcoming meeting.

Major Stock Markets

Major US equity markets rebounded, ending a four-day losing streak, with the S&P 500 gaining 0.9% to 7657, the Dow gaining 1.0% to 52573, and Nasdaq gaining 1.0% to 26333. This rally was partly driven by a pullback in oil prices and the overall CPI report not being worse than feared, despite the core inflation surprise. Technology, Industrials, and Communications sectors led the gains, while Healthcare and Utilities lagged. Despite Friday's rebound, all major US indices recorded weekly declines. AI-related stocks remained a bright spot, with Oracle's strong cloud infrastructure results and Microsoft's data center expansion plans providing momentum, and Dell surging on AI infrastructure optimism. European markets also closed higher, though Asian indices generally saw declines.

Major Government Bonds

Government bond yields across major economies finished higher, particularly at the shorter end of the curve, reflecting increased expectations for central bank tightening. The US 2-year Treasury yield rose over 15 basis points to 4.594%, and the 10-year Treasury yield increased by 0.03 percentage points to 5.0%, reaching its highest level since October 20, 2023. This move was exacerbated by a disappointing US Treasury buyback operation, which fell short of its maximum authorized amount. Globally, the German 10-year yield rose 0.01 percentage points to 3.5%, hitting its highest level since August 10, 2009, and the Japan 10-year yield rose 0.08 percentage points to 3.0%, reaching its highest since 1996, following the ECB's rate hike and anticipation of further global monetary tightening.

Major Commodities

Oil prices retreated on Friday, with WTI crude settling at $99.99 per barrel, down -2.4%, but both benchmarks still posted significant weekly gains of nearly 10% and 9% respectively. The daily decline was attributed to reports of potential talks between Gulf states and Iran to ease Middle East tensions and manage shipping through the Strait of Hormuz. However, concerns over supply disruptions persisted after Saudi Arabia preventatively closed a key East-West oil pipeline following attacks, and US diesel prices reached a new record high above $6.00 per gallon. Gold prices ended the day down -0.4% to $4390.0, but recorded weekly losses.

CPI Overview

The Consumer Price Index (CPI) for August showed a YoY increase of 3.4%, slightly below the forecast of 3.4% and the previous month's 3.36%. On a MoM basis, the CPI rose by 0.4%, aligning with forecasts but below the previous month's 0.07%.

Core CPI Insights

The Core CPI, which excludes food and energy, recorded a YoY increase of 2.45%, slightly above the forecast of 2.4% and the previous month's 2.48%. This marks the lowest level since March 2021. On a MoM basis, the Core CPI rose by 0.29%, surpassing the forecast of 0.2% and the previous month's 0.22%.

Components Details

Energy prices surged with a YoY increase of 16.05%, up from 14.45% previously. Education & Communication saw a significant rise to 2.15% from 0.55%. Transportation costs increased to 5.97% from 5.58%. Conversely, Medical Care Commodities experienced a decline of -2.69%, slightly up from -2.71% previously. Other notable changes include Food & Beverages at 2.58%, Shelter at 3.03%, and Apparel at 3.62%.

Macroeconomics

Inflation concerns intensified following the release of August's US - Producer Price Index (PPI), which rose 5.4% year-over-year, exceeding the 5.3% expectation, though core PPI month-over-month increased a cooler 0.2%. Initial jobless claims remained low at 206,000, indicating a resilient labor market, while existing home sales fell 2.0% to an annual rate of 3.98 million units. The European Central Bank raised its key interest rates by 25 basis points, as anticipated, and revised its inflation forecasts higher for 2027 and 2028, citing persistent inflationary pressures from the Middle East conflict. Market odds for a Federal Reserve rate hike next week increased to around 70-73%.

Major Stock Markets

Major global stock markets experienced broad declines for the fourth consecutive session, driven by rising bond yields, surging oil prices, and persistent inflation worries. The S&P 500 fell -0.6% to 7592, the Dow Jones Industrial Average fell -0.6% to 52064, and the Nasdaq Composite fell -0.7% to 26082. European indices also retreated, with the Euro Stoxx 600 down 1.4%, following the hawkish ECB rate hike. Technology, particularly semiconductors, and materials sectors were among the weakest performers, while consumer staples and certain software names showed relative resilience.

Major Government Bonds

Government bond yields surged globally as inflation fears and central bank hawkishness took center stage. The benchmark US 10-year Treasury yield climbed 0.13 percentage points to 5.0%, reaching its highest level since October 20, 2023, while the 2-year yield rose 16 basis points to 4.59%. The 30-year Treasury yield also increased 8 basis points to 5.37%, a level not seen since June 2007. European bond yields followed suit, with the German 10-year Bund yield rising 0.06 percentage points to 3.5%, reaching its highest level since April 12, 2011.

Major Commodities

Oil prices surged significantly, with WTI crude jumping 8.5% to $104.2 per barrel and Brent crude rising 6.3% to $107.63 per barrel, with WTI reaching its highest level since May 20, 2026. This rally was fueled by escalating Middle East tensions, including Houthi actions in the Red Sea and reports of Iran resuming ballistic missile production, alongside news of Saudi Arabia's August crude output falling to its lowest since 1990. In contrast, precious metals declined, with gold falling down -2.2% to $4362.2 and silver tumbling 5.4%, pressured by the sharp rise in bond yields and strengthened Fed rate hike expectations. Copper prices also dropped down -4.1% to $6.5 amid reports of a stalled US tariff plan.

Macroeconomics

Geopolitical tensions intensified in the Middle East, driving renewed concerns about inflation and central bank policy. China's August Consumer Price Index (CPI) rose by 0.8% year-on-year, while the Producer Price Index (PPI) increased by 3.8% year-on-year, both turning positive month-over-month. In the U.S., the Treasury Department's announcement of a $6 billion long-term bond buyback program fell short of market expectations, further exacerbating rate concerns. Traders are now pricing in approximately a 60% probability of a Federal Reserve rate hike in September, with expectations for rate increases from the European Central Bank and Bank of England also rising.

Major Stock Markets

Major global equity markets experienced broad declines, with U.S. indices closing lower for a third consecutive session; the S&P 500 fell -0.5% to 7636, the Dow Jones Industrial Average dropped -0.8% to 52381, and the Nasdaq Composite decreased by -0.6% to 26253. European markets also saw significant losses, with the Euro Stoxx 50 down 1.6%, Germany's DAX falling -1.7% to 25576, and the UK's FTSE 100 declining -1.3% to 10670. Energy stocks were a notable exception, outperforming other sectors in the S&P 500 amid surging oil prices.

Major Government Bonds

Government bond yields surged globally as inflation concerns mounted and the U.S. Treasury's bond buyback announcement disappointed. The U.S. 10-year Treasury yield climbed 0.05 percentage points to 4.8%, reaching a record high since November 2023. Similarly, the German 10-year Bund yield rose 0.08 percentage points to 3.4%, a record high since 2011, and the UK 10-year Gilt yield increased 9 basis points to 5.26%, a level not seen since 2007.

Major Commodities

International oil prices continued their ascent driven by escalating Middle East tensions, with Brent crude futures breaking above $100 per barrel for the first time since July, settling at $101.21, while WTI crude futures rose 4.8% to $97.5 per barrel, a record high since May 2026. Precious metals saw gains, with spot gold rose 0.2% to $4447.8 per ounce, and silver jumping 2.32%. Industrial metals also surged, with London Metal Exchange (LME) copper hitting a new record high of $14,858.5 per metric ton.

Macroeconomics

Geopolitical tensions in the Middle East intensified, with Houthi attacks on Saudi energy facilities and reports of US strikes on Iranian targets, reigniting inflation concerns. Markets are keenly awaiting upcoming US August inflation data (US - Producer Price Index on Thursday, US - Consumer Price Index (CPI) on Friday) for clues ahead of the US - Federal Funds Rate's September 15-16 meeting, where a roughly 58-59% probability of an US - FedWatch Probability of Rate Hike/Cut is priced in. Meanwhile, China's August China - Exports rose 25.0% year-on-year, and China - Imports increased 28.2% year-on-year, resulting in a record China - Imports/Exports vs. Trade Balance of $119.09 billion, while US consumer credit increased by $18.1 billion in July.

Major Stock Markets

US equity markets closed lower, with the S&P 500 down -0.6% to 7673, the Dow Jones Industrial Average down -1.2% to 52786, and the NASDAQ Composite Index down -0.3% to 26421. The downturn was primarily driven by escalating geopolitical tensions and rising oil prices, which fueled inflation and rate hike fears. Sector performance saw Energy Select Sector SPDR Fund and Utilities Select Sector SPDR Fund outperform, while Health Care Select Sector SPDR Fund and iShares Global Financials ETF (IXG) led declines, though iShares PHLX Semiconductor ETF showed some resilience. European markets were mixed, and Asian markets generally finished lower.

Major Government Bonds

US Treasury yields were mixed across the curve. The benchmark US - 10-Year Treasury Note Yield closed at 4.8%, showing no change, while the policy-sensitive US 2-year Treasury Note Yield rose to 4.39%. This movement reflected increased market expectations for a US - FedWatch Probability of Rate Hike/Cut in the near term. The Japanese Yen, in contrast, edged slightly lower against the US Dollar, with USD/JPY at 153.8. The US Dollar Index was down -0.3% to 98.8.

Major Commodities

Oil prices surged significantly due to the escalating Middle East conflict and attacks on energy infrastructure. US WTI Crude Oil Futures surged 2.0% to $94.4 per barrel, reaching its highest level since June 4, 2026, and Brent Crude Oil Futures settled at $97.92 per barrel, briefly approaching the $100 mark. US Gold Futures declined, with Gold futures down -1.5% to $4401.3 per ounce, while Copper continued its rally, rising 0.8% to $14946.3 per ton, reaching a record high since July 1, 1959.

Macroeconomics

Eurozone economic data showed strength, with Q2 GDP revised upwards to 0.6% month-on-month and 1.2% year-on-year, while the September investor confidence index climbed to a four-year high of 5.1. However, political risk in the Eurozone increased following the German far-right AfD's significant win in a state election, securing 43.8% of the vote. In the US, gasoline prices reached a new Labor Day record of approximately $4.15 per gallon amid Middle East tensions, and China's central bank continued its gold accumulation, adding 650,000 ounces in August.

Major Stock Markets

US stock markets were closed for the Labor Day holiday. European equities saw mixed performance, with the Euro Stoxx 600 flat, while Germany's DAX declined down -0.2% to 26007 and France's CAC 40 posted a modest gain of 0.3% to 8306. Asian markets, particularly in tech, rallied strongly, with Japan's Nikkei 225 up 2.1% to 66400 and South Korea's KOSPI surging 4.6% to 6995 following significant advancements in AI models and robust demand for storage chips. Chinese A-shares were also mixed but saw strong gains in AI-related sectors.

Major Government Bonds

US Treasury markets were closed for the holiday, though futures indicated a cautious sentiment. European government bond yields rose, with the German 10-year Bund yield increasing by 0.05 percentage points to 3.4%, a record high since April 15, 2011. Concerns over potential Japanese sales of US Treasuries to fund currency intervention, alongside persistent inflation worries and expanding fiscal deficits, contributed to upward pressure on global long-term yields.

Major Commodities

Oil prices surged, with WTI crude rising 1.3% to $92.7 per barrel, a record high since June 5, 2026, driven by escalating US-Iran hostilities and fresh attacks on Saudi Aramco facilities. Gold declined down -0.4% to $4458.4 per ounce, pressured by higher yields and inflation expectations. LME copper reached a new all-time high of $14,533 per tonne, fueled by speculation regarding new US tariffs on copper imports.

Macroeconomics

US August Nonfarm Payrolls significantly exceeded expectations, adding 162,000 jobs against a forecast of 55,000, with the unemployment rate holding at 4.1% and prior months' data revised up by 55,000. This data boosted the probability of a September Federal Reserve rate hike to 58% from 49.4%. In contrast, Canada's August employment unexpectedly decreased by 41,700. The US Treasury imposed sanctions on a Turkish investment bank for alleged ties to an Iranian shadow banking network. S&P also issued a credit warning regarding AI infrastructure, projecting over $7 trillion in capital expenditure by 2030 for major cloud vendors with unquantified returns, raising concerns about tech giants' debt sustainability.

Major Stock Markets

Major US stock indices closed lower, ending a two-day winning streak, with the S&P 500 falling -0.4%, the Nasdaq Composite Index down -0.3%, and the Dow Jones Industrial Average declining -0.5%, as strong employment data reignited rate hike concerns. However, the US - PHLX Semiconductor Sector Index notably rose 3.4%. Asian markets showed mixed performance, with Hong Kong's Hong Kong Hang Seng Index gaining 1.7% and the Hong Kong - Hang Seng TECH Index up 2.27%, while mainland Chinese A-shares edged lower. European equities also saw mixed results.

Major Government Bonds

US Treasury yields rose across the curve following the robust jobs report, with the US 2-year Treasury Note Yield increasing 3.4 basis points to 4.3703% and briefly touching 4.416%, its highest level since January 2025. The US - 10-Year Treasury Note Yield was around 4.8%. Adding to market movements, Norway's sovereign wealth fund announced plans to reduce its US Treasury exposure by approximately $80 billion, intending to reallocate towards agency mortgage-backed securities.

Major Commodities

Oil prices saw a slight dip, with WTI Crude Oil settling down -0.1% at $91.2 per barrel and Brent Crude Oil rising 0.80% to $96.28 per barrel, both marking weekly gains of about 9%. Gold initially dropped after the strong US jobs data but recovered most of its losses to close down -1.4% at $4477.2 per ounce. Industrial metals also saw gains, with Copper increasing 1.4% to $6.7.

August Job Report Highlights

The US Nonfarm Payrolls for August reported a significant increase, with a monthly change of 162.0k, surpassing the forecast of 55.0k and the previous month's 21.0k. The unemployment rate remained steady at 4.1%, aligning with both previous and forecasted figures.

Components Details

• Mining & Logging saw a positive shift with a change of 3.0k, up from -3.0k.
• Construction increased to 22.0k from 18.0k.
• Retail Trade experienced a decline, with a change of 1.4k compared to the previous 13.2k.
• Transportation dropped to 5.0k from 13.8k.
• Information sector faced a significant decrease, reporting -23.0k from a previous 5.0k.
• Financial Activities remained unchanged at -11.0k.
• Education & Health Services surged to 29.0k from 12.0k.
• Leisure & Hospitality rebounded with a change of 62.0k, up from -21.0k.
• Government employment increased significantly to 35.0k from -50.0k.
• Goods Production rose to 41.0k from 29.0k.
• Private Service showed a notable increase to 86.0k from 42.0k.

Macroeconomics

Federal Reserve Governor Waller's remarks, indicating a willingness to hold interest rates steady in September if disinflationary trends continue, significantly influenced market sentiment, leading to a reassessment of September hike probabilities to roughly 50%. Economic data revealed Q2 nonfarm business sector productivity increased at a 1.4% annualized rate, with unit labor costs revised lower to a 1.2% annualized gain. The August ISM Services PMI rose to 55.4, exceeding expectations, though prices paid reached a four-year high. Initial jobless claims edged up to 206,000, and the July trade deficit widened to $88.6 billion.

Major Stock Markets

Major global stock markets closed higher, primarily driven by dovish signals from a Federal Reserve Governor regarding interest rates. U.S. equities saw broad-based gains, with the Dow Jones Industrial Average rising 1.2% to 53686, the S&P 500 up 1.1% to 7748, and the Nasdaq Composite advancing 1.4% to 26584, led by sectors such as consumer discretionary and financials. European markets also posted gains, while Asian equities were mixed.

Major Government Bonds

Government bond yields retreated globally following the Federal Reserve Governor's comments, which eased concerns about aggressive rate hikes. The U.S. 10-year Treasury yield fell 0.02 percentage points to 4.8%, while the 2-year yield dropped to around 4.34%. Japanese government bond yields also declined, with the 10-year yield decreasing 0.07 percentage points to 2.9%, as speculation of a Bank of Japan rate hike intensified, contributing to a broader rally in fixed income markets.

Major Commodities

Oil prices continued their upward trend, with WTI crude settling at a record high of $91.7 per barrel, up 0.8%, driven by escalating geopolitical tensions in the Middle East and concerns over supply disruptions in the Strait of Hormuz. Gold experienced a significant rally, closing at $4523.5 an ounce with a gain of 2.5%, alongside a rise in silver prices, both supported by a weaker U.S. dollar and reduced expectations for aggressive interest rate hikes. Industrial metals like copper and iron ore also saw gains.

Highlight

The Institute for Supply Management (ISM) reported that the Services Purchasing Managers' Index (PMI) for August rose to 55.4, surpassing both the previous and forecasted figures of 54.1. This marks a continued expansion in the services sector, maintaining a position above the 50 mark since May 2025.

Components

• Business Activity: Increased to 61.7 from 59.1.
• New Orders: Jumped to 60.9, the highest level since February 2023, from 57.2.
• Employment: Slightly decreased to 47.8 from 47.4.
• Supplier Deliveries: Decreased to 51.3 from 52.8.
• Inventory: Rose significantly to 56.7 from 51.4.
• Prices: Increased to 72.6, the highest since June 2022, from 70.3.
• Backlog of Orders: Increased to 55.6 from 50.9.
• New Export Orders: Increased to 56.3 from 52.0.
• Imports: Increased to 56.3 from 51.8.
• Inventory Sentiment: Increased to 54.1 from 52.5.

Macroeconomics

US ADP private payrolls increased by a lower-than-expected 38,000 in August, marking the smallest gain since January. New York Fed President Williams suggested that rising Treasury yields reflect a strong US economy rather than inflation concerns, indicating insufficient reason for further rate hikes, while the Fed's Beige Book noted slight to moderate economic growth and moderate price increases. The Bank of Canada maintained its overnight rate at 2.25%, and the Reserve Bank of New Zealand raised its Official Cash Rate by 25 basis points to 2.75%. In Europe, ECB Governing Council member Nagel signaled a high probability of a rate hike next week, even as the France-Germany 10-year bond spread widened to 88 basis points, reflecting Eurozone fiscal fragility. The Japanese Yen strengthened significantly, with USD/JPY down -0.9% to 158.7, amid speculation of intervention and hawkish comments from the Bank of Japan regarding potential aggressive normalization.

Major Stock Markets

US equities ended a three-day losing streak, with the S&P 500 rising 0.5% to 7667, the Dow Jones Industrial Average gaining 0.6% to 53062, and the Nasdaq Composite advancing 0.5% to 26218. Small-cap stocks, as measured by the Russell 2000, outperformed with a 1.13% increase. In contrast, European markets generally closed lower, with the Euro Stoxx 50 down 0.1% and the FTSE 100 down -0.3% to 10757. Asian markets also saw broad declines, notably South Korea's KOSPI tumbling down -4.0% to 6563 and Japan's Nikkei 225 sliding down -2.9% to 64326, influenced by higher oil prices and global bond yields.

Major Government Bonds

US Treasury yields pulled back modestly from recent multi-year highs, with the 10-year Treasury yield settling around 4.8% after briefly touching 4.818%, and the 2-year yield declining by approximately 3 basis points to 4.37%. In Europe, German 10-year government bond yields rose to 3.4%, a record high since April 18, 2011, while the spread between French and German 10-year bonds widened to 88 basis points, reaching a high not seen since the 2012 Eurozone debt crisis. Japanese 10-year government bond yields increased to 3.0%, a record high since September 9, 1996, continuing their ascent above 3%.

Major Commodities

Crude oil prices experienced choppy trading but ultimately settled higher, reaching five-week highs as the US-Iran conflict continued to escalate; WTI crude rose 0.6% to $90.7 per barrel, and Brent crude gained 1.04% to $95.63 per barrel. This rise was supported by a surprise draw in US crude oil inventories, which decreased by 4.5 million barrels. Gold prices rebounded by 0.9% to $4435.4 per ounce, snapping a three-day losing streak, benefiting from a weaker US dollar, with the US Dollar Index down -0.1% to 99.6, and easing Treasury yields. Meanwhile, copper prices rose 1.5% to $6.6, and iron ore down -1.6% to 715.0.

Macroeconomics

Geopolitical tensions escalated significantly following U.S. strikes on Iranian targets and reported attacks on oil tankers in the Strait of Hormuz, triggering broad market anxiety. U.S. economic data showed the August ISM Manufacturing PMI decreased to 54.6, with the Prices Paid index remaining high at 71.1, while July JOLTS job openings fell to 7.271 million, indicating some cooling in the labor market. In the Eurozone, August HICP rose to 3.3% year-on-year, its highest since September 2023, though core inflation surprisingly eased to 2.4%, and the July unemployment rate stood at 6.4%. Fed Governor Barr's hawkish comments reinforced concerns about further rate hikes if inflation persists.

Major Stock Markets

Major global stock markets experienced a broad decline, primarily driven by escalating geopolitical tensions in the Middle East, a sharp rise in oil prices, and surging government bond yields which reignited inflation fears. In the U.S., the S&P 500 fell -0.7% to 7631, the Dow Jones Industrial Average dropped -0.8% to 52767, and the Nasdaq Composite declined -1.0% to 26100, with technology and growth sectors particularly affected. European equities also closed lower, with the German DAX falling -1.1% to 25970, the UK FTSE 100 down -0.3% to 10789, and the French CAC 40 declining -0.4% to 8302.

Major Government Bonds

Global government bond markets experienced a significant sell-off, pushing yields higher across the board amid renewed inflation concerns and expectations of tighter monetary policy. The U.S. 10-year Treasury yield rose 0.04 percentage points to 4.8%, reaching a record high, while the 30-year yield climbed to approximately 5.3%, touching multi-decade highs. In Europe, the German 10-year bond yield increased 0.01 percentage points to 3.3%, a record high, and the UK 10-year yield surged 16 basis points to 5.22%. Japan's 10-year government bond yield also rose 0.06 percentage points to 3.0%, a record high, reflecting a broad global repricing of interest rate risk.

Major Commodities

Crude oil prices surged dramatically due to escalating geopolitical tensions in the Middle East, including U.S. strikes on Iranian targets and reported attacks on oil tankers in the Strait of Hormuz, fueling concerns about supply disruptions. WTI crude oil futures rose 6.0% to settle at $90.9 per barrel, while Brent crude spiked over 4% to settle around $94 per barrel. Conversely, gold prices were down -2.4% to settle at $4375.7 per ounce, as rising government bond yields and a stronger U.S. dollar, which rose 0.2% to 99.7, weighed on the precious metal.

Job Openings Overview

The latest data from the US Job Openings and Labor Turnover Survey (JOLTS) indicates that job openings in July were reported at 7,271,000, falling short of the forecasted 7,330,000. This marks a slight increase from the previous month's figure of 7,182,000.

Job Openings Rate

The job openings rate rose slightly to 4.4% from the previous 4.3%.

Components Details

• Quits Rate: The quits rate decreased to 1.9% from the previous 2.0%.
• Hires Rate: The hires rate dropped to 3.2% from 3.4% previously.
• Layoffs Rate: The layoffs rate saw a slight decline to 1.0% from 1.1%.

Highlight

The Institute for Supply Management (ISM) reported that the Manufacturing Purchasing Managers' Index (PMI) for August stood at 54.6, a decline from July's 55.6 and below the forecasted 55.2. This indicates a slower growth rate in the manufacturing sector than anticipated.

Components

• New Order: Decreased to 53.7 from 56.7.
• Employment: Dropped to 51.2 from 52.8.
• Supplier Deliveries: Increased slightly to 59.3 from 58.9.
• Customers' Inventories: Rose to 42.8 from 40.7.
• Backlog of Orders: Fell to 51.8 from 55.0.
• Imports: Declined to 52.5 from 55.7.
• Price: Remained unchanged at 71.1.

Macroeconomics

Geopolitical tensions escalated as the U.S. and Iran exchanged military strikes, reigniting inflation concerns. Fed Chair Kevin Warsh's hawkish comments continued to influence markets, with CME FedWatch indicating a 65% probability of a September rate hike. Economic data showed Germany's August HICP annual rate rising to 2.9% from 2.8%, while core HICP remained at 2.4%. China's August Manufacturing PMI improved slightly to 49.8%, still in contraction, and the non-manufacturing PMI held at 49.0. In the U.S., the Dallas Fed Manufacturing Index jumped to 11.6 in August, the highest since January 2025, though its employment index fell and raw materials prices paid index rose.

Major Stock Markets

Major U.S. equity indices closed lower, with the S&P 500 down -0.3% to 7686, the Dow Jones Industrial Average down -0.7% to 53186, and the Nasdaq Composite down -0.1% to 26371. European markets also saw declines, with the Euro Stoxx 50 dropping 1.01% and Germany's DAX down -1.2%. Asian markets were mixed, as Shanghai gained 0.4% and Seoul rose 0.5%, while Tokyo edged lower, down -0.1%, and Hong Kong edged lower, down -0.1%. Energy stocks outperformed due to surging oil prices, but California utilities PG&E and Edison International plunged over 20% each after lawmakers blocked a proposal to shift wildfire liability. Amazon also fell 2.5% following news of an impending FTC antitrust lawsuit.

Major Government Bonds

Government bond yields rose significantly, reflecting increased inflation fears and heightened rate hike expectations. The U.S. 10-year Treasury yield climbed 0.04 percentage points to 4.8%, reaching a record high since January 2025. The German 10-year Bund yield also advanced 0.05 percentage points to 3.3%, marking a record high since April 2011. Yield curves generally steepened as longer-term yields saw larger increases.

Major Commodities

Oil prices surged sharply due to renewed military actions between the U.S. and Iran, which raised concerns about potential supply disruptions in the Strait of Hormuz. WTI crude futures rose 3.4% to $86.2 per barrel, while Brent crude futures gained 2.71% to $90.49 per barrel, pushing Brent back above the $90 mark. Conversely, gold prices fell for a second consecutive day, declining -0.6% to $4501.5 per ounce, pressured by rising bond yields and a stronger outlook for interest rate hikes.

Fed Chair Kevin Warsh delivered hawkish remarks at the Jackson Hole symposium, emphasizing that inflation remains uncomfortably high above the 2% target and policymakers "have work to do" if it doesn't clearly and swiftly move towards that goal. Markets interpreted this as a strong signal for further tightening, with the implied probability of a September rate hike jumping from approximately 35% to around 55-57%. Economic data included a weaker-than-expected Chicago PMI at 47.1, while initial jobless claims came in lower than anticipated at 203,000. Separately, France's August CPI rose to 2.7% and Spain's to 4.5%, a three-year high, further fueling European rate hike expectations. South Korea's central bank also raised rates by 25 basis points to 3% for the second consecutive time.

Major Stock Markets

U.S. equity markets closed lower after Fed Chair Warsh's hawkish comments reversed earlier gains, with the S&P 500 falling down -0.3% to 7712, the Nasdaq down -0.5% to 26402, and the Dow Industrials slightly lower by down -0.0% to 53560. The Russell 2000, sensitive to higher borrowing costs, saw a more significant decline of 1.39%. Despite Friday's dip, major indices ended the week higher, largely supported by strong technology sector performance earlier in the week. However, the semiconductor sector faced renewed pressure, with Nvidia falling 4.57%, while PayPal also saw a significant decline of 12.7% after buyout talks reportedly ended. European markets were mostly higher, while Asian markets finished mixed.

Major Government Bonds

Government bond yields surged, particularly on the short end of the curve, as markets repriced interest rate expectations following the hawkish Fed commentary. The 2-year Treasury yield jumped 0.12 percentage points to 4.35%, while the 10-year Treasury yield rose 0.05 percentage points to 4.7%. This sharp move reflected increased conviction among traders for a September rate hike. Demand for recent Treasury auctions, including two, five, and seven-year notes totaling $183 billion, was mixed, with foreign participation below recent averages.

Major Commodities

Commodity markets saw notable movements, with precious metals experiencing a sharp sell-off. Gold prices tumbled down -3.4% to $4,504.1 per ounce, and Silver dropped around 3.49% to $67.79 per ounce, pressured by the stronger U.S. dollar and rising Treasury yields. In contrast, oil prices remained relatively stable on Friday, with WTI crude closed at $83.4 per barrel, down -0.1%, and Brent crude at $89.31 per barrel, though WTI crude recorded a weekly drop of 4.2% amid reports of increased transit volumes through the Strait of Hormuz.

Highlight

The Eurozone Economic Sentiment Indicator for August reported a figure of 98.4, surpassing both the previous month's 97.1 and the forecasted 97.5. This marks a positive deviation from expectations, indicating a stronger economic sentiment across the Eurozone.

Main Countries and Sectors Details

• Germany: The Economic Sentiment Indicator rose to 94.1, up from 92.8, reaching its highest level since May 2023.
• France: The indicator increased to 98.1 from 95.8.
• Greece: Recorded a slight decrease to 106.9 from 107.5.
• Italy: Saw an increase to 100.5 from 99.7.
• Spain: Dropped to 102.1 from 104.3, marking its lowest level since August 2025.

In terms of sector-specific indicators: - Industrial Confidence improved to -5.3 from -6.1, the highest since April 2023. - Services Confidence rose to 5.8 from 5.1. - Consumer Confidence slightly improved to -15.5 from -15.9. - Retail Confidence increased to -5.7 from -6.8. - Construction Confidence showed a minor improvement to -5.0 from -5.2.

US Stock Market

The US stock market saw a significant drop, with the latest stats at 2.1, down from 3.88, marking the lowest level since September 2020.

Taiwan and China Stock Markets

Taiwan's stock market fell to 1.41 from 1.76, hitting its lowest level since June 2025. Similarly, China's stock market decreased to 1.45 from 2.23, reaching its lowest point since January 2025.

Europe and Japan Stock Markets

Europe's stock market improved to 1.08 from 0.17. Japan's stock market rose slightly to 2.23 from 2.2, achieving its highest level since January 1995.

Emerging Market Stock

Emerging market stocks dropped to 1.28 from 1.73, marking the lowest level since April 2025.

Bond Markets

US bonds increased to 0.79 from 0.55. High yield bonds saw a significant decline to -1.5 from 0.05, reaching the lowest level since June 2023.

Currency Movements

The US Dollar rose slightly to 0.05 from -0.4. The Euro dropped to 1.84 from 2.56, marking its lowest level since February 2025.

Commodity Prices

Oil prices decreased to -3.93 from -4.76. Gold and silver saw increases, with gold at 2.98 from 1.73 and silver at 3.43 from 2.03.

Macroeconomics

US initial jobless claims fell to 203,000, below expectations of 210,000, with continuing claims also declining to 1.78 million, signaling continued labor market resilience. However, the July advanced goods trade deficit widened significantly to $118.8 billion, exceeding both June's $101.4 billion and expectations of $100 billion, driven by robust imports. Several Federal Reserve officials reiterated hawkish stances, emphasizing that current interest rates might not be restrictive enough to curb persistent inflation, ahead of the anticipated Jackson Hole speech by Fed Chair Warsh.

Major Stock Markets

US equity markets closed higher, primarily propelled by a strong rally in technology stocks, as better-than-expected earnings and guidance from major AI chipmakers and software companies reinforced the AI investment theme. The Nasdaq surged 1.6% to 26541, the S&P 500 gained 0.7% to 7731, and the Dow Jones Industrial Average rose 0.2% to 53569, though market breadth was negative with most other sectors declining. International markets generally softened, with European equities mixed as the UK's FTSE 100 was down -0.8% to 10793 and France's CAC 40 was down -1.7% to 8320, while Germany's DAX Index rose 0.3% to 26367. Asian equities were also mixed, with Japan's Nikkei 225 down -0.2% to 66132 and Hong Kong's Hang Seng Index down -0.3% to 25566, while China's CSI 300 rose 0.9% to 4630 and Taiwan's TSEC Weighted Index gained 0.3% to 45975.

Major Government Bonds

US Treasury yields rose across the curve, with the 10-year Treasury yield rising 0.01 percentage points to 4.7% and the 2-year yield increasing to approximately 4.23-4.24%, as hawkish comments from Federal Reserve officials and anticipation of Fed Chair Warsh's speech influenced sentiment. European government bonds also saw yields climb following hawkish European Central Bank minutes, with Germany's 10-year government bond yield up 0.02 percentage points to 3.2%, while Australian bond yields rose sharply, particularly at the short end, on increased expectations for a rate hike by the Reserve Bank of Australia.

Major Commodities

Crude oil prices advanced significantly, with WTI crude settling up 1.8% at $83.7 per barrel and Brent crude gaining 2.12% to $89.70 per barrel, following reports that the Trump administration rejected a return to the June agreement with Iran, fueling geopolitical tensions around the Strait of Hormuz. Gold prices saw a modest increase of 0.0% to $4654.8 per ounce, while Silver surged 2.12%.

Macroeconomics

US inflation data indicated persistent price pressures, with the July headline Personal Consumption Expenditures (PCE) inflation ticking up to 3.7% year-over-year and core PCE holding steady at 3.3%, both remaining above the Federal Fed's target. This was accompanied by stronger-than-expected personal income and spending, while the second estimate for Q2 GDP remained at 1.5% annualized with upward revisions to consumption. Internationally, Australia also reported slightly higher-than-expected inflation, and Japan's services producer price index accelerated, adding to global central bank tightening concerns ahead of the Jackson Hole Symposium.

Major Stock Markets

Major U.S. equity indices closed modestly lower as investors digested the inflation data and awaited key corporate earnings, with the Dow Jones Industrial Average down -0.2%, the S&P 500 down -0.0%, and the Nasdaq Composite down -0.1%. While European markets were largely mixed, most Asian indices posted gains, though Australia's S&P/ASX 200 bucked the trend with a 0.4% decline. Trading activity remained subdued as market participants exercised caution.

Major Government Bonds

Government bond yields globally moved higher, with U.S. Treasury yields rising across the curve following the inflation report, as the benchmark 10-year yield rose to 4.7% and the 2-year yield rose about 4 basis points to 4.21%. This upward movement in yields was also observed in European and UK bond markets, while Australian bond yields saw a notable increase, particularly in the 3-year tenor, reflecting heightened expectations for further monetary policy tightening.

Major Commodities

Crude oil prices experienced a choppy session before ultimately declining, with WTI crude settling at $81.9 per barrel, down -0.6%. Brent crude settled at approximately $86.37 per barrel, as reports of potential negotiations between Iran and Oman regarding the Strait of Hormuz influenced sentiment. Precious metals also retreated, with gold futures falling -0.8% to $4658.4 per ounce, pressured by a stronger U.S. dollar and rising real yields, while copper prices eased to $6.7, down -0.2%.

Macroeconomics

US August consumer confidence fell to 89.4, the lowest since January, while July new home sales dropped 10.5% month-over-month to an annualized 607,000 units. In Europe, Germany's second-quarter GDP growth was revised up to 0.3% quarter-over-quarter. Canada announced retaliatory tariffs of 15% to 50% on approximately $20 billion worth of US products, escalating trade tensions. Japan's July core CPI, excluding fresh food and special factors, rose 2.3% year-over-year, marking the 22nd consecutive month above the central bank's 2% target.

Major Stock Markets

Global stock markets generally moved higher, driven by easing Middle East geopolitical tensions and a significant drop in oil prices. The S&P 500 gained 0.3% to 7677, the Dow Jones Industrial Average rose 0.3% to 53577, and the Nasdaq Composite advanced 0.7% to 26151. European indices were mostly positive, with the Euro Stoxx 600 up 0.4% and Germany's DAX rising 0.6% to 26266, while France's CAC 40 saw a slight decline, down -0.2% to 8439. Asian markets also saw gains, including Japan's Nikkei 225 up 0.5% to 65856 and South Korea's KOSPI up 0.7% to 6743.

Major Government Bonds

Government bond yields declined across major markets as easing geopolitical tensions and falling oil prices reduced inflation concerns. The US 10-year Treasury yield dropped -0.08 percentage points to 4.6%, and the 2-year Treasury yield fell 6 basis points to 4.174%. German 10-year bond yields also decreased by -0.05 percentage points, settling at 3.2%.

Major Commodities

Oil prices experienced a sharp decline, with WTI crude falling down -4.5% to $81.2 per barrel and Brent crude dropping 3.9% to $88.58 per barrel, driven by reports of de-escalation in the Middle East and progress in US-Iran ceasefire talks. Gold prices saw a modest increase of 0.4% to $4718.0 per ounce, reaching its highest level since May 12, 2026, while copper prices rose 1.7% to $6.7 per pound, reaching a record high.

Macroeconomics

US Treasury Secretary Bessent announced "Operation Economic Outcast," expanding sanctions against nearly 60 Iranian entities, individuals, and vessels, targeting digital assets, technology, gold, aviation, and shipping, and warning that any entity laundering for Iran would be removed from the dollar system. US-Canada trade tensions escalated, with President Trump announcing a 50% tariff on Canadian cars, trucks, auto parts, and steel, effective January 1, 2027. The US Treasury is reportedly considering using its general account (TGA) cash balance, estimated near $1 trillion, to fund buybacks of longer-dated bonds, a move seen as easing pressure on long-end rates. The Chicago Fed National Activity Index for July came in at -0.08, suggesting a slight loss of economic momentum.

Major Stock Markets

US equities were mixed, with the Dow Jones Industrial Average gaining 0.3% to 53417, while the S&P 500 declined -0.3% to 7653 and the Nasdaq Composite fell -0.8% to 25980. Technology and momentum stocks, particularly semiconductors and memory chip producers, were notable laggards, with a memory-chip ETF slumping 5.9% and the Philadelphia Semiconductor Index down -2.7% to 11423. Conversely, sectors like financials, consumer staples, and utilities saw strong upside gains. Asian markets generally weakened, with Hong Kong's Hang Seng Index down -1.9% to 25517 and South Korea's KOSPI falling -3.1% to 6697, while European markets were mixed.

Major Government Bonds

US Treasury yields mostly firmed, with the curve flattening, as reports circulated about the Treasury potentially utilizing its cash balance for bond buybacks. The benchmark 10-year US Treasury yield fell -0.04 percentage points to 4.7%, while the 2-year yield was largely unchanged at approximately 4.23%, and the 30-year yield declined 2-4.6 basis points to about 5.23%.

Major Commodities

Crude oil prices declined, with WTI crude futures settling at $85.1 per barrel, down -2.3%, and Brent crude around $92.00 per barrel, also down over 2%, as initial US sanctions on Iran were perceived as less severe than feared and investors took profits after recent gains. Gold prices advanced, rising 0.7% to settle at $4714.7 per ounce, reaching its highest level since mid-May, driven by geopolitical uncertainty and safe-haven demand, while silver declined over 1%.

Highlight

The August MM Economic Expectation Index for the world stands at 2.55%, showing a slight increase from the previous 2.53%.

Components

• US: The index slightly increased to 2.12% from 2.11%.
• Eurozone: Notable rise to 1.07% from 0.95%.
• Germany: Increase to 1.01% from 0.91%.
• China: Slight decrease to 4.47% from 4.48%.
• Taiwan: Significant decrease to 6.11% from 6.38%.
• India: Decrease to 6.9% from 6.98%.
• Canada: Increase to 1.37% from 1.32%.
• South Korea: Increase to 2.58% from 2.53%.
• Singapore: Increase to 3.3% from 3.08%.
• Malaysia: Increase to 4.58% from 4.54%.

Macroeconomics

US economic data was mixed but generally positive, with August flash PMIs surprising to the upside: the US Composite PMI rose to 56.0, a four-year high, driven by strong services offsetting softer manufacturing. The Eurozone Composite PMI also hit a nine-month high of 52.1, boosted by manufacturing. However, geopolitical tensions escalated as the US announced "severest economic actions" against Iran, threatening consequences for countries maintaining commercial ties, which fueled concerns over global trade and energy supply. The US Treasury unexpectedly doubled its long-dated bond buyback cap to at least $4 billion per operation, aiming to temper rising yields, though market skepticism about its long-term impact on structural deficit pressures was evident.

Major Stock Markets

Major US equity indexes concluded the week lower, marking the first weekly loss since late July, pressured by elevated long-term bond yields and rising oil prices. The S&P 500 fell 1.43%, the Nasdaq declined 2.05%, and the Dow Jones Industrial Average was down 0.85% for the week. While Friday saw a rebound with all major US indices closing higher, the weekly performance reflected investor concerns over inflation and the sustainability of recent AI and momentum trades. European markets were mostly lower for the week, while Asian indices showed mixed performance.

Major Government Bonds

Government bond yields across major economies rose significantly over the week, largely reversing the brief rally sparked by the US Treasury's surprise announcement to double long-dated bond buybacks. The 10-year US Treasury yield climbed 4.1 basis points to settle at 4.7%, while the 30-year yield rose 1.1 basis points to 5.276%, approaching its highest levels since 2007. This upward pressure on yields reflected ongoing market skepticism regarding the efficacy of buybacks in countering fundamental structural pressures from fiscal deficits and increasing debt supply. Germany's 5-year bond yield also touched 3% for the first time since 2008.

Major Commodities

Crude oil prices saw a strong weekly advance, with WTI crude gaining 5.7% to $87.06 per barrel and Brent crude rising 6.63% to $94.39 per barrel, driven by escalating US-Iran tensions and continued supply concerns in the Strait of Hormuz. Precious metals also surged, with gold increasing 5.5% to $4,680.60 per ounce and silver up 6.8%, as investors sought safe havens amid fiscal worries and a weaker US dollar. Bitcoin futures experienced a notable rally, climbing 22% for the week and briefly surpassing $70,000.

Highlight

The Eurozone's Purchasing Managers' Index (PMI) for August has shown a stronger performance than anticipated. The Manufacturing PMI rose to 52.8, surpassing both the previous month's 51.9 and the forecast of 51.8, marking the highest level since May 2022. The Services PMI remained steady at 51.7, slightly above the forecast of 51.5. The Composite PMI, which combines both manufacturing and services, increased marginally to 52.1 from 52.0.

European Countries PMI Details

Germany's Manufacturing PMI saw a significant rise to 54.1 from 52.2, indicating robust growth in the sector. However, the Services PMI in Germany declined to 48.5 from 49.8, suggesting a contraction. In France, the Manufacturing PMI improved to 51.5 from 49.8, while the Services PMI decreased to 48.4 from 49.6, reflecting a downturn in the services sector.

Macroeconomics

US economic data presented a mixed picture, with initial jobless claims falling to 206,000, better than consensus, though continuing claims were slightly higher. The August Philadelphia Fed manufacturing index surprised with an increase to 47.4, its highest in over five years, with the employment index also improving, while prices paid and received indices declined. US Treasury Secretary Bessent indicated plans to further expand bond buybacks beyond $4 billion per operation and a new fiscal initiative for consolidation, alongside threatening "unprecedented economic isolation" against Iran. Federal Reserve officials offered varied perspectives, with San Francisco Fed President Daly stating policy is in a "good place" and no need for earlier hikes, while St. Louis Fed President Musalem noted that competition for capital from government financing and AI build-out is affecting the bond market. China's August LPR remained unchanged at 3.0% for the one-year and 3.5% for the five-year. Australian labor market data showed a downside surprise, with employment falling by 15.8k and participation easing by 0.1 percentage points to 66.9%.

Major Stock Markets

Major US equity indices closed lower, with the Dow Jones Industrial Average falling -1.3% to 52759, the S&P 500 declining -0.9% to 7641, and the Nasdaq Composite dropping -1.0% to 26067. The Russell 2000 also saw a significant decline of 1.34%. Walmart's shares plunged over 9% after disappointing earnings, dragging down consumer staples and discretionary sectors, while Moderna's stock retreated over 23% following a previous day's surge. Sector performance was mixed, with energy, agricultural chemicals, rails, exchanges, custody banks, utilities, and insurance outperforming. European markets were mostly down, with the Euro Stoxx 50 falling 0.35% and the German DAX30 down -0.4% to 25983, though the UK FTSE100 edged up 0.0% to 10748. Asian markets generally saw gains, with the Hang Seng Index rising 0.8% to 25699 and the Nikkei 225 up 1.4% to 66217, while mainland Chinese indices also closed higher.

Major Government Bonds

US Treasury yields rose across the curve, reversing much of the previous day's gains, as skepticism grew regarding the long-term impact of the Treasury's expanded buyback program. The 10-year US Treasury yield climbed 0.05 percentage points to 4.7%, while the 30-year US Treasury yield increased 5.7 basis points to 5.248%, nearing its recent 20-year high. The 2-year US Treasury yield also rose 2.8 basis points to 4.19%. The US Dollar Index firmed, gaining 0.0% to 98.8. German 5-year bond yields touched 3% for the first time since 2008, while Japanese government bonds rallied on strong demand.

Major Commodities

Crude oil prices surged significantly, driven by escalating geopolitical tensions following new economic threats from the US against Iran and ongoing concerns over the Strait of Hormuz. WTI crude futures rose 2.3% to $86.4 per barrel, and Brent crude futures climbed 2.4% to $93.78 per barrel, both reaching their highest levels since late July. Gold prices edged higher by 0.7%, settling at $4,576.9 per ounce, benefiting from safe-haven demand amidst global uncertainties and elevated inflation expectations, despite a firmer US dollar. Silver also saw a notable gain of 3.5%, reaching $68.11 per ounce. Bitcoin futures jumped 4.8%, surpassing $72,500.

Macroeconomics

The U.S. Treasury announced it would double its bond buyback operations for 10- to 30-year maturities to at least $4 billion per operation, effective September 9, aiming to support market liquidity. This came as U.S. federal government debt surpassed $40 trillion for the first time. The Federal Reserve's July FOMC minutes indicated that "many" participants viewed inflation as potentially more persistent, with "some" suggesting current financial conditions might not be restrictive enough and noting that AI investments could contribute to higher prices. In Europe, the Eurozone's June current account surplus expanded to 35.1 billion euros, while the UK's July CPI rose 0.3% month-over-month, bringing the annual rate to 2.9%.

Major Stock Markets

U.S. equities saw a modest rebound, with the S&P 500 gaining 0.2% to 7708, the Dow Jones Industrial Average gaining 0.2% to 53463, and the NASDAQ Composite Index gaining 0.2% to 26331, all driven by the U.S. Treasury's bond buyback announcement. The healthcare and biotech sectors significantly outperformed following news of a major breakthrough in an mRNA cancer vaccine trial. Conversely, the semiconductor sector broadly underperformed, down -2.1% to 11738, contributing to a mixed performance in European markets where the Euro Stoxx 50 fell 0.4% and the FTSE 100 gained 0.1% to 10743. Asian markets were mixed, with Japan's Nikkei 225 declining -3.2% to 65326 and Chinese A-shares experiencing a significant sell-off across major indices.

Major Government Bonds

U.S. Treasury yields tumbled, particularly at the longer end of the curve, in response to the U.S. Treasury's announcement of increased bond buyback operations. The benchmark US - 10-Year Treasury Note Yield fell -0.07 percentage points to 4.6%, while the 30-year yield dropped 9 basis points to 5.19%. In contrast, the German 10-year bund yield remained stable at 3.3%, a record high since May 2011, and the Japan 10-year Government Bond Yield decreased by -0.04 percentage points to 2.9%.

Major Commodities

Gold prices surged significantly, rising 3.6% to settle above $4579.8 per ounce, reaching its highest level since early June, primarily driven by a weaker U.S. dollar and declining Treasury yields. Crude oil prices continued their upward trend for a fourth consecutive session, with WTI Crude Oil settling around $84.5 per barrel, up 0.5%, and Brent Crude Oil around $91.62 per barrel, as tensions in the Middle East persisted. US - Crude Oil Inventories reportedly increased by 4.4 million barrels last week.

Macroeconomics

Macroeconomic data presented a mixed picture in the US, with July Housing Starts falling by 12.4% while Housing Permits rose by 5.0%. Import prices decreased by 0.4% and export prices by 1.3% in July, while industrial output saw a modest 0.2% increase. In Europe, Germany's ZEW Economic Confidence Index improved to 34.2 in August, surpassing expectations. However, the UK labor market showed signs of cooling, with private sector regular wages growing at 2.8% year-over-year, the slowest pace since October 2020. Geopolitical tensions in the Middle East remained elevated, with continued US-Iran stalemate, accusations of missile launches, and suspended trade relations, fueling broader inflation concerns.

Major Stock Markets

Major global stock markets largely closed lower for a third consecutive day, with the tech-heavy Nasdaq Composite declining by -1.3% to 26290, the S&P 500 down -0.7% to 7692, and the Dow Jones Industrial Average down -0.2% to 53343. The semiconductor sector was particularly hard hit, with the PHLX Semi Index falling down -5.0% to 11993, as concerns over AI investment debt and rising bond yields pressured rate-sensitive technology stocks. European equities also saw broad declines, with the Euro Stoxx 600 down 0.7%, though the UK FTSE 100 managed a slight gain of 0.1% to 10728. Asian markets were mixed, with Japan's Nikkei falling down -2.5% to 67461, while China's Shanghai Composite fell down -0.3% to 4726 and Hong Kong's Hang Seng posted marginal gains of 0.1% to 25471.

Major Government Bonds

Global government bond markets experienced a significant sell-off, pushing yields to multi-year highs. The US 30-year Treasury yield surged to 5.3371% intraday, its highest since 2007, before paring losses to close at 5.2868%, while the 10-year yield also saw an intraday peak of 4.7478% before settling down -0.02 percentage points to 4.7%. In Europe, Germany's 10-year bond yield rose 0.04 percentage points to 3.3%, reaching its highest level since 2011, and the UK 10-year Gilt yield increased by 2 basis points to 5.08%. Japanese 10-year government bond yields also climbed 0.03 percentage points to 3.0%, reaching a 30-year high, reflecting widespread concerns over inflation, fiscal deficits, and increased capital demand.

Major Commodities

Commodity markets saw crude oil prices extend their gains for a third straight session, driven by persistent Middle East geopolitical tensions and concerns over supply disruptions. WTI crude rose 0.9% to $84.5 per barrel, and Brent crude increased 0.17% to $91.02 per barrel, reaching a three-week high. Conversely, precious metals declined significantly, with spot gold falling down -1.8% to $4394.2 per ounce and spot silver dropping 3.72% to $63.34 per ounce, as surging bond yields and a firmer US dollar reduced their appeal.

Macroeconomics

Global economic data presented a mixed picture, with China's July industrial production slowing to 4.5% year-on-year and retail sales to 0.6% year-on-year, alongside a 19.2% decline in China Real Estate Investment. In contrast, the US saw its August Empire manufacturing index rise to 20.6, the highest since December 2021, and NAHB builder confidence increased to 35. Canada's July CPI also edged up to 3.0% year-on-year.

Major Stock Markets

Major global stock markets were largely subdued, with US equities closing lower as the S&P 500 fell -0.5% to 7745 and Dow Industrial Average fell -0.5% to 53460, and the Nasdaq Composite dipped -0.3% to 26645. European indices also saw declines, with the Euro Stoxx 600 down 0.2%. Sentiment was primarily weighed down by escalating geopolitical tensions in the Middle East and rising bond yields, though semiconductor and AI hardware-related stocks showed notable strength. Asian markets, however, generally outperformed, with the Hang Seng Index rising 1.3% to 25453 and Japan's Nikkei 225 gaining 0.7% to 69220.

Major Government Bonds

Government bond markets experienced a significant sell-off, particularly in the US, where the 10-year Treasury yield rose 0.02 percentage points to 4.7% and the 30-year Treasury yield surged to 5.31%, marking a 19-year high. This upward pressure on yields was attributed to heightened inflation expectations driven by rising oil prices, alongside ongoing concerns about increased government and corporate supply. Notably, China, Japan, and the UK all reduced their holdings of US Treasuries in June, with China's holdings reaching a 2008 low.

Major Commodities

Commodity markets were dominated by a sharp rise in oil prices, as geopolitical tensions in the Middle East intensified following the expiration of the US-Iran ceasefire memorandum and renewed threats. WTI crude settled up 3.5% at $84.3 per barrel, while Brent crude surged 2.65% to $90.87 per barrel, crossing the $90 mark for the first time in three weeks. Gold prices also advanced, gaining 0.8% to $4472.8 per ounce, as investors sought safe-haven assets amidst the heightened uncertainty.

Macroeconomics

US July retail sales unexpectedly fell 0.6%, the largest dip since May 2025, and preliminary August Michigan consumer sentiment also declined to 51.0 from July's 55.2. Despite this weaker data, July core CPI was inline and core PPI was cooler than expected, easing pressure on the Federal Reserve's rate hike outlook, with markets now pricing in a 28% chance of a September rate hike, down from 44% a week ago. The University of Michigan's 1-year inflation outlook rose slightly to 4.3% from 4.2%. In China, July social financing was 1.41 trillion yuan, RMB loans decreased by 340 billion yuan, and M2 grew 7.7%.

Major Stock Markets

US equities closed mostly lower on Friday, with the S&P 500 down -0.2% to 7786, the Nasdaq down -0.3% to 26729, and the Dow down -0.2% to 53732. Despite Friday's dip, the S&P 500 still managed a 0.4% gain for the week, marking its third consecutive weekly advance, and the Russell 2000 reached a new all-time high. The AI and memory chip sectors saw continued strong performance, with some individual names making significant moves, while broader tech was mixed. Chinese equities and Hong Kong markets experienced a mixed day, with some major tech companies seeing declines.

Major Government Bonds

US Treasury yields rose on Friday despite weaker economic data, with the 10-year Treasury yield up 0.05 percentage points to 4.7% and the 2-year yield up 3.1 basis points to 4.17%. The 30-year US Treasury yield ended the week above 5.25%, reaching its highest level since 2007, reflecting broader supply concerns and global yield increases. Longer-dated bond yields in the UK, Germany, and France also hit multi-year highs, with Germany's 10-year government bond yield rising 0.06 percentage points to 3.2%. In contrast, China's 10-year government bond yield fell down -0.01 percentage points to 1.7%, a record low since July 2025, amidst central bank liquidity operations.

Major Commodities

WTI crude oil prices up 1.4% to $82.4 per barrel on Friday, with Brent crude oil up 1.67% to $88.52 per barrel, driven by ongoing Middle East tensions. Gold prices saw a modest gain up 0.3% to $4432.0 per ounce, while silver also edged higher. The US Dollar Index fell down -0.3% to 99.7 following the disappointing retail sales data. Bitcoin continued its decline, down -1.0%.

Retail Sales Overview

The latest report on US retail sales for July indicates a decline, with the month-on-month (MoM) figure at -0.58%, down from the previous 0.25% and missing the forecast of 0.1%. This marks the lowest level since May 2025. Year-on-year (YoY), retail sales grew by 5.01%, compared to 6.75% previously.

Retail Sales Control Group

The retail sales control group, which excludes certain volatile items, also saw a decrease. The MoM figure is -0.49%, down from the previous 0.48% and below the forecast of 0.3%, marking the lowest level since January 2025. The YoY growth stands at 4.56%, down from 6.16%.

Components Details

Motor Vehicle sales showed a significant drop with a YoY growth of 1.86%, down from 6.27%. Sporting Goods saw a YoY growth of 10.14%, down from 12.59%. Electronics Appliance sales grew by 4.71%, down from 7.0%. Furniture sales declined with a YoY change of -1.22%, compared to -0.19% previously. Gasoline Stations experienced a YoY growth of 16.17%, down from 19.09%. Nonstore Retailers saw a notable decrease in growth, with a YoY figure of 7.7%, down from 12.42%.

Macroeconomics

US inflation data showed further signs of cooling, with July headline Producer Price Index (PPI) flat at 0.0% month-over-month, below the 0.2% consensus, and the core PPI rising 0.2%, also below expectations. The annualized core PPI decreased by 0.5 percentage points to 4.2%, its lowest level since March. Initial jobless claims rose to 209,000, exceeding consensus estimates, while continuing claims declined. Federal Reserve officials presented mixed views, with Cleveland Fed President Mester advocating for immediate rate hikes, while Richmond Fed President Barkin questioned the necessity of further increases. Market expectations for a September rate hike remained around 34%, but the total hikes priced through year-end fell to 24 basis points, the lowest since mid-June, indicating reduced conviction for further tightening.

Major Stock Markets

Major global stock markets generally advanced, with US equities closing mostly higher as a risk-on sentiment prevailed, fueled by cooling inflation data and falling oil prices. The S&P 500 index rose 0.6% to a new record close of 7799, while the Nasdaq Composite gained 0.8% to 26803 and the Dow Jones Industrial Average added 0.1% to 53840. Technology and AI-related sectors, particularly memory chip makers, showed strong performance, with SanDisk surging over 13% after its investor day projections, and Workday jumping on M&A talks. European markets were mixed, with the Euro Stoxx 50 seeing modest gains while the UK's FTSE 100 was down -0.6% to 10773. Asian markets varied, with Japan's Nikkei 225 up 1.2% to 68309 and South Korea's KOSPI surging 3.6% to 6813, while Chinese indices like the Shanghai Shenzhen CSI 300 were down -0.6% to 4664 and the Hong Kong Hang Seng Index was down -0.2% to 25397.

Major Government Bonds

Global government bond yields generally declined, with US Treasuries firming across the curve as softer inflation data reduced expectations for aggressive Federal Reserve rate hikes. The 10-year US Treasury yield was down -0.05 percentage points to 4.6%, and the 2-year yield dropped by around 5-6 basis points to 4.14%. However, a $25 billion auction of 30-year notes saw weak demand, with the yield reaching 5.216%, the highest at a long bond auction since 2001. European bond yields also saw modest declines, with Germany's 10-year government bond yield down -0.02 percentage points to 3.1%, while Japanese 10-year government bond yields edged up 0.02 percentage points to 2.9% following speculation of faster rate hikes by the Bank of Japan.

Major Commodities

Oil prices experienced a notable decline, with WTI crude was down -2.6% to settle at $81.1 per barrel and Brent crude also dropping over 2% to approximately $87.07 per barrel. This downturn was attributed to weaker global demand forecasts and a significant increase in US crude inventories, despite ongoing geopolitical tensions around the Strait of Hormuz. Gold prices were down -1.3% to settle at $4409.6 per ounce due to profit-taking, after reaching two-month highs. Silver also saw a similar percentage decline, while copper was down -0.1% to $6.6 and iron ore was up 0.7% to $710.5.

Macroeconomics

US July Consumer Price Index (CPI) data showed a modest increase, with the annual rate at 3.4% (matching expectations and down from 3.5% in June) and the monthly rate at 0.1%. Core CPI also moderated to 2.5% year-over-year (matching expectations and down from 2.6% in June) and 0.2% month-over-month, easing pressure on the Federal Reserve for a September rate hike, with market expectations for such a move falling to around 40-45%. Separately, the US July budget deficit widened significantly to $432 billion, exceeding estimates. In China, the central bank's Q2 monetary policy report emphasized timely, pragmatic incremental policies and increased counter-cyclical adjustment.

Major Stock Markets

Major global stock markets were mixed, with US indices generally higher as AI-related tech stocks drove gains following upbeat earnings and forecasts from semiconductor and AI cloud companies. The S&P 500 rose 0.3% to 7748 and the Nasdaq Composite gained 0.5% to 26588, while the Dow Jones Industrial Average saw a marginal decline to 53770. European equities closed lower across the board, with the Euro Stoxx 50 down 0.26% and the German DAX30 fell down -0.2% to 26331. In Asia, the KOSPI surged 3.7% to 6579 on AI optimism, the Nikkei 225 gained 0.8% to 67524, while Hong Kong's Hang Seng index fell down -0.8% to 25440 and mainland Chinese A-shares closed higher, with the CSI 300 Index gaining 0.5% to 4688, led by computing power hardware and optical fiber sectors.

Major Government Bonds

US Treasury yields saw initial declines following the benign CPI report, which tempered expectations for aggressive Fed tightening, before partially recovering. The 10-year US Treasury yield closed at 4.7%, while the 2-year yield settled near 4.21%. A 10-year Treasury auction drew a high yield of 4.683%, the highest since 2007. Futures markets adjusted, pricing in a reduced probability for a Fed rate hike in September. Chinese government bond yields saw a modest rally, with the 10-year yield closing at 1.7% and the 30-year at 2.158%.

Major Commodities

Oil prices traded in a narrow range before ending lower, influenced by ongoing uncertainty surrounding the Strait of Hormuz, a larger-than-expected build in US crude inventories, and OPEC's revised global demand outlook. WTI crude settled down -0.7% at $82.6 per barrel, and Brent crude fell 0.66% to $88.38 per barrel. Gold prices rose, gaining 0.5% to close at $4462.7 per ounce as the softer inflation data bolstered expectations for a stable interest rate environment. Silver also saw a notable increase of 1.00% to $65.33 per ounce, while copper fell down -0.1% to $6.6 on softer Chinese demand.

Highlight

The Consumer Price Index (CPI) for July in the United States showed a slower-than-expected increase. The CPI (NSA, YoY) recorded a 3.36% rise, down from the previous 3.53% and below the forecast of 3.4%. The CPI (SA, MoM) rose by 0.07%, compared to a previous decline of 0.42% and a forecast of 0.1%. Core CPI (NSA, YoY) was at 2.48%, slightly lower than the previous 2.59% and the expected 2.5%. Meanwhile, Core CPI (SA, MoM) increased by 0.22%, surpassing the forecast of 0.2% and the previous decrease of 0.02%.

Components

Energy prices saw a significant decline, with a YoY increase of 14.45%, down from 15.45%. Medical Care Commodities decreased by 2.71%, compared to a previous drop of 2.06%. Education & Communication rose by 0.55%, recovering from a previous decline of 0.06%. Transportation services saw a YoY increase of 2.9%, down from 3.24%. Shelter costs rose by 3.16%, slightly lower than the previous 3.26%. Housing increased by 3.25%, compared to 3.32% previously. Medical Care Services saw a YoY increase of 2.65%, down from 2.92%.

Macroeconomics

Anticipation for the upcoming US July Consumer Price Index (CPI) data dominated macroeconomic sentiment, with expectations for a 0.1% month-over-month increase and a 3.4% year-over-year rise in headline inflation, while core CPI is projected at 0.2% and 2.5% respectively. The NFIB Small Business Optimism Index rose 2.4 points to 99.8, reaching its highest level since August 2025. Meanwhile, US - ADP Nonfarm Employment weekly private payrolls showed a sixth consecutive deceleration, averaging 8,250 jobs over the prior four weeks, the lowest since January. US July Existing Home Sales fell 1.7% to an annualized rate of 4.06 million units, the slowest pace since April, with the median home price at $434,100, up 2.0% from July 2025. Federal Reserve officials continued to highlight inflation as a primary concern, while China's Consumer Price Index [CPI] and Producer Price Index [PPI] for Industrial Products slowed sharply in July.

Major Stock Markets

US equity markets largely closed lower, with the S&P 500 declining -0.3% to 7728, the Dow Jones Industrial Average falling -0.3% to 53792, and the NASDAQ Composite Index dropping -0.6% to 26445, as investors remained cautious ahead of inflation data and amid geopolitical uncertainties. Conversely, the iShares Russell 2000 ETF (IWM) bucked the trend, gaining 0.32%. European markets were mixed, with the Euro Stoxx 600 flat, Germany DAX Index up 0.3% to 26391, a record high since November 1990, and the FTSE 100 down -0.2% to 10844. Asian markets also saw mixed performance, notably with Japan Nikkei 225 Index rising 2.1%, while Hong Kong Hang Seng Index fell -1.2% to 25637. Semiconductor and data center-related stocks performed strongly, driven by positive AI infrastructure news, though several large technology companies experienced declines.

Major Government Bonds

Government bond markets saw yields edge lower, with the US - 10-Year Treasury Note Yield down -0.01 percentage points to 4.7% and the US 2-year Treasury Note Yield down 3 basis points to 4.21%. Demand for US government debt was evident as a $58 billion auction of three-year notes stopped through by 0.5 basis points. European bond yields also declined, with the Germany 10-year Bond Yield down -0.02 percentage points to 3.2% and the UK 10-Year Government Bond Yield falling 2 basis points to 4.96%.

Major Commodities

Oil prices extended gains, driven by persistent geopolitical tensions in the Middle East, particularly concerns over the IMF - Strait of Hormuz - Daily Transit Calls & Transit Trade Volume remaining closed until Iran's conditions are met. US WTI Crude Oil Futures rose 1.6% to settle at $83.4 per barrel, while Brent Crude Oil advanced 1.4% to $88.91 per barrel. US Gold Futures finished up 0.3% at $4433.0 per ounce after earlier touching a two-month high, while Silver also declined by 1.6%.

Macroeconomics

US-Iran tensions escalated as both sides demanded compensation, casting doubt on the reopening of the Strait of Hormuz and driving oil prices higher. This reignited inflation concerns, with Cleveland Fed President Hammack suggesting multiple rate hikes might be needed to bring inflation down. Meanwhile, the US Strategic Petroleum Reserve fell below 300 million barrels for the first time since 1983. In Asia, China's CPI inflation eased to a six-month low of 0.5% year-on-year in July, and PPI also moderated to 3.5% year-on-year.

Major Stock Markets

Major global stock markets showed mixed performance, with US indices closing slightly lower as technology shares underperformed. The Dow Jones Industrial Average fell -0.1% to 53976, the S&P 500 declined -0.1% to 7753, and the Nasdaq Composite dropped -0.3% to 26605, partly due to weakness in chipmakers following Intel's $15 billion stock offering and news of Nvidia's large AI infrastructure financing plans. European markets were also mixed, while most Asian markets, including Japan's Nikkei 225 rose 2.1% to 66970 and Hong Kong's Hang Seng Index rose 1.1% to 25938, saw gains.

Major Government Bonds

Government bond yields rebounded across major markets as rising oil prices renewed inflation fears. The benchmark 10-year US Treasury yield climbed 0.05 percentage points to 4.7%, with the 2-year yield also rising to 4.2430%, reversing some of the previous session's gains that followed weaker US jobs data. European bond yields also increased, with the UK 10-year Gilt yield jumping and the German 10-year Bund yield rising 0.05 percentage points to 3.2%, reflecting broader market concerns about persistent price pressures.

Major Commodities

Oil prices surged significantly, with WTI crude jumped 5.2% to $82.2 per barrel and Brent crude rising 6.71% to $86.96 per barrel, driven by heightened geopolitical tensions between the US and Iran and uncertainty surrounding the Strait of Hormuz. Gold extended its rally, touching a nine-week high with a 1.2% increase to $4451.2 per ounce, while silver also saw a substantial gain of 3.38%. European natural gas prices also saw a notable increase, rising over 10%.

Macroeconomics

The US labor market showed unexpected weakness as July non-farm payrolls contracted by 23,000, significantly missing the +80,000 expectation and marking the first decline since February. Revisions for May and June also reduced prior figures by a combined 103,000. Despite this, the unemployment rate dropped to 4.1%, partly due to a decreased labor force participation rate. Average hourly earnings rose by a modest 0.1% month-over-month and 3.2% year-over-year. Initial jobless claims remained low at 199,000. Meanwhile, July ISM manufacturing surpassed expectations, reaching its highest level since May 2022, while ISM services remained in expansion but slightly underperformed forecasts. China's July exports surged by 23.9% year-over-year, and imports increased by 27.5%.

Major Stock Markets

Global equity markets reacted positively to the weaker US jobs report, which eased fears of aggressive Fed rate hikes. Major US indices saw significant gains, with the S&P 500 closing at a record high of 7758, up 0.6%, while the Nasdaq climbed 1.3% to 26691 and the Dow Industrials rose 0.3% to 54037. Technology and software sectors were notable outperformers, buoyed by strong earnings reports. Conversely, energy and some defensive sectors lagged. European stock markets mostly closed higher, while Asian markets showed mixed performance, with some A-share sectors rising and Hong Kong stocks saw the Hang Seng Index rise 0.5% to 25668.

Major Government Bonds

US Treasury prices surged across the curve, leading to a notable decline in yields as the weak jobs data significantly reduced expectations for a September Federal Reserve rate hike. The benchmark 10-year Treasury yield fell by -0.02 percentage points to 4.6%, while the more policy-sensitive 2-year Treasury yield dropped by 8.7 basis points to 4.203%. The 30-year bond yield also retreated from its post-2007 highs. The Treasury's quarterly refunding announcement offered no surprises, maintaining stable issuance levels.

Major Commodities

Precious metals experienced a strong rally, with gold surging 2.4% to settle at $4401.3 per ounce, marking its best weekly performance since January. Silver also saw a substantial increase of 9.8% for the week, settling at $63.50 per ounce, its best since February. In contrast, crude oil prices declined significantly, with WTI crude settling down -0.3% at $77.1 per barrel, and Brent crude falling 4.9% to $83.55 per barrel, both recording their second consecutive weekly declines. Bitcoin also rose by 1.0% to $64899.1.

Highlight

The US July job report revealed a surprising decline in nonfarm payrolls, with a decrease of 23,000 jobs, falling short of the forecasted increase of 85,000. This marks a significant drop from the previous month's increase of 20,000 jobs. Meanwhile, the unemployment rate improved slightly to 4.1%, down from the previous 4.2% and below the forecasted 4.2%, reaching its lowest level since January 2025.

Components

• Construction saw a notable increase, adding 22,000 jobs compared to the previous 5,000.
• Retail Trade experienced a significant decline, losing 19,400 jobs, a sharp drop from the previous decrease of 3,700.
• Transportation rebounded with an increase of 9,700 jobs, compared to a loss of 11,400 in the previous month.
• Information sector showed a positive turnaround, adding 11,000 jobs after a previous decline of 13,000.
• Financial Activities reported a substantial decrease, losing 14,000 jobs compared to a previous loss of 2,000.
• Leisure & Hospitality continued to decline, losing 40,000 jobs, though slightly better than the previous month's loss of 43,000.
• Government sector faced a significant reduction, losing 53,000 jobs compared to a previous loss of 10,000.

Macroeconomics

Middle East geopolitical tensions escalated significantly, with Iran proposing to ban U.S. and Israeli vessels from the Strait of Hormuz and reports of Iranian strikes near the strait, fueling concerns over global energy supply and inflation. This comes as Federal Reserve officials, including Chairman Warsh, indicated readiness to raise interest rates in September if inflation data proves strong. Economic data showed U.S. initial jobless claims at 199,000, slightly below consensus, while Q2 non-farm productivity rose 1.4% and unit labor costs increased 1.3%. Separately, China initiated a national security investigation into imported printing and copying equipment, and imposed sanctions on several U.S. entities.

Major Stock Markets

Major U.S. stock indices closed lower, with the Dow Jones Industrial Average falling -0.8% to 53885, ending a five-day winning streak, the S&P 500 declining -0.2% to 7710, and the Nasdaq Composite down -0.1% to 26348, marking a second consecutive day of losses for the latter two. The Russell 2000 also fell 0.58%. The technology sector saw mixed performance, with some memory chip stocks experiencing significant declines following earnings reports, while the broader chip index showed slight gains, up 0.3% to 12049. European equities were mostly positive, with the Euro Stoxx 600 gaining 0.2% to a new historical high, though the UK FTSE 100 dipped -0.2% to 10868. Asian markets were broadly lower, with South Korea's Kospi plunging -4.6% to 6296 and Hong Kong's Hang Seng Index dropping -1.5% to 25530.

Major Government Bonds

Government bond yields rose across the board, reflecting increased inflation concerns stemming from higher oil prices and renewed expectations for a Federal Reserve rate hike. The U.S. 10-year Treasury yield climbed by 0.06 percentage points to settle at 4.7%, and the 2-year Treasury yield also increased by about 7 basis points to 4.25%. European government bonds followed suit, with the German 10-year Bund yield rising 0.02 percentage points to 3.1% and the UK 10-year Gilt yield up 5 basis points to 4.94%. The U.S. Dollar Index strengthened by 0.3% to 100.0.

Major Commodities

Oil prices surged significantly due to heightened Middle East tensions, with Brent crude jumping approximately 4.9% to $82.77 per barrel and WTI crude rising about 3.8% to $78.1 per barrel. This rally was driven by reports of Iran's proposed restrictions on shipping in the Strait of Hormuz for U.S. and Israeli vessels, alongside reports of Iranian military action in the area. In other commodities, gold prices edged lower by -0.2% to $4295.6 per ounce, snapping a three-day advance, while silver also fell by 1.1%.

Macroeconomics

US economic data presented a mixed picture, with the 7月 ISM services PMI slightly up to 54.1 but its employment component contracting to 47.4 and prices paid remaining high at 70.3. The 7月 ADP private payrolls significantly missed expectations, adding only 4.4万人, the weakest gain since January. Federal Reserve officials continued to signal a readiness to raise rates if inflation does not recede. In Europe, the Euro Area PPI declined 0.3% in June, slowing the annual rate to 4.6%, while France's central government fiscal deficit reached approximately 107 billion Euros by June end, raising concerns about its full-year deficit potentially reaching 8% of GDP. Japan's scheduled cash earnings rose 3.4% year-over-year in June, marking the sixth consecutive month of over 3% growth.

Major Stock Markets

Major global stock markets showed mixed performance, with the Dow Jones Industrial Average up 0.5% to a new record high of 54349, while the S&P 500 down -0.2% to 7724 and Nasdaq Composite down -0.8% to 26363 respectively, ending their four-day rallies. This divergence was largely driven by sector-specific dynamics, as strong earnings from healthcare and traditional industries supported the Dow, while significant declines in several prominent technology and AI-related stocks, including Alphabet and AMD, weighed heavily on the Nasdaq. European indices were mostly flat to slightly lower, with the Stoxx 600 Index closing unchanged at a new historical high, while Asian markets generally saw gains, notably in Japan, where the Nikkei 225 rose 3.7% to 66300, and South Korea, with the KOSPI Index up 3.8% to 6598.

Major Government Bonds

US Treasury yields edged lower, with the benchmark 10-year yield down -0.01 percentage points to 4.6% and the 2-year yield slightly lower at 4.192%. In Europe, the German 10-year Bund yield edged down -0.01 percentage points to 3.1%, while the UK 10-year Gilt yield saw a minor decline. Japanese government bond yields also edged lower, with the 10-year JGB yield down -0.04 percentage points to 2.8%. The stability in bond markets came as investors processed mixed economic data and awaited further developments on geopolitical tensions.

Major Commodities

International oil prices traded in a narrow range, with WTI crude settling down -0.9% at $75.1 per barrel and Brent crude near $79.45 per barrel, as conflicting reports regarding the Strait of Hormuz and ongoing geopolitical tensions created volatility. Gold experienced a significant surge, climbing up 3.7% to settle around $4306.9 per ounce, marking its largest daily gain since February, supported by a weaker US Dollar and an easing of some geopolitical risk premiums. Silver also saw a strong increase, while copper prices advanced, up 2.0% to $6.8 per pound, reaching a record high since July 1959.

Highlight

The ISM Services PMI for July was reported at 54.1, slightly below the forecast of 54.5 but marginally higher than the previous month's 54.0. Despite falling short of expectations, the index remains above the 50 mark, indicating continued expansion in the services sector since May 2025.

Components

Business Activity saw a significant increase, rising to 59.1 from 55.4. New Orders also experienced growth, reaching 57.2 compared to the previous 55.1. Employment, however, declined to 47.4 from 51.2, indicating contraction in hiring. Supplier Deliveries improved slightly to 52.8 from 54.4. Prices rose to 70.3 from 67.7, suggesting increased cost pressures. The Backlog of Orders decreased to 50.9 from 54.9, while New Export Orders increased to 52.0 from 50.4. Imports rose to 51.8 from 49.4, indicating higher demand for foreign goods. Inventory Sentiment remained relatively stable at 52.5, compared to the previous 52.6.

Employment Growth Falls Short

The latest ADP Nonfarm Employment report for July showed a monthly change of 44,000, significantly lower than the forecasted 68,000 and the previous month's 95,000. This indicates a slower pace of job growth than anticipated.

Salary Growth

The median salary for job stayers saw a YoY increase of 4.4%, consistent with the previous month. Meanwhile, job changers experienced a YoY median salary growth of 7.0%, slightly up from 6.8% in the prior period.

Components Details

• Leisure and Hospitality experienced a decline, with a change of -11,000 compared to the previous 2,000.
• Natural Resources and Mining also saw a decrease, reporting -6,000, down from -5,000.
• Trade, Transportation, and Utilities reported a decline of -8,000, contrasting with the previous month's 15,000.
• Education and Health Services added 36,000 jobs, down from 48,000 previously.
• Professional and Business Services saw an increase, reporting 9,000 compared to the previous 3,000.

Macroeconomics

Reports of significant progress in US-Iran talks regarding a potential agreement to reopen the Strait of Hormuz eased geopolitical risks and inflation concerns, with US Treasury Secretary Bessent indicating a deal could be imminent. Economic data showed the US labor market cooling, as June JOLTS job openings decreased by 178,000 to 7.359 million, falling below expectations. The US trade deficit narrowed to $73.3 billion in June, while factory orders unexpectedly declined by 0.3%. Philadelphia Fed President Paulson stated an open mind on future rate paths, considering current policy "mildly restrictive."

Major Stock Markets

Global stock markets experienced a broad rally, with US indices reaching new record highs as the S&P 500 surged 1.8% to a record high of 7736, the Dow Jones Industrial Average gained 1.7% to a record high of 54086, and the Nasdaq Composite climbed 2.6% to 26585. This robust performance was driven by optimism over easing Middle East tensions, strong corporate earnings, particularly in the technology and AI sectors, and falling oil prices. European markets also closed higher, with the Dow Jones Euro Stoxx 600 index rising 0.7% to a new historical peak, and Asian markets generally posted gains, though Hong Kong's Hang Seng index fell down -0.6% to 25853.

Major Government Bonds

Major government bond yields declined across the board as improved risk sentiment and reduced inflation fears, stemming from lower oil prices and easing geopolitical tensions, tempered expectations for future interest rate hikes. The US 10-year Treasury yield fell down -0.07 percentage points to 4.6%, while the 2-year yield dropped 5 basis points to 4.19%. Similarly, the German 10-year Bund yield fell down -0.04 percentage points to 3.1%, and the UK 10-year Gilt yield fell 6 basis points, reflecting a global trend of lower borrowing costs.

Major Commodities

International crude oil prices experienced a sharp decline, with WTI crude falling down -6.4% to $75.2 per barrel and Brent crude dropping 5.55% to $78.42 per barrel, as hopes for a diplomatic resolution to the Strait of Hormuz standoff alleviated supply disruption concerns. Gold prices rose 1.1% to $4134.0 per ounce, supported by lower bond yields and a softer US dollar, while silver also saw a significant gain of 2.29%. In industrial metals, LME three-month copper advanced 1.4%, surpassing the $14,000 mark.

Job Openings Decline

The latest JOLTS report reveals that job openings in the United States decreased to 7,359,000 in June, falling short of the forecasted 7,440,000 and down from the previous month's 7,537,000. This marks a notable decline in job openings, suggesting a potential cooling in the labor market.

Job Openings Rate

The job openings rate also saw a slight decrease, moving from 4.5% in the previous month to 4.4% in June.

Components Details

• Quits Rate: Remained steady at 2.0%.
• Hires Rate: Increased slightly to 3.4% from 3.3%.
• Layoffs Rate: Unchanged at 1.1%.

Macroeconomics

US ISM Manufacturing PMI rose to 55.6 in July, exceeding expectations of 54.0 and reaching its highest level in over two years, with the employment index expanding for the first time in nearly 33 months. New York Fed President Williams expressed optimism that inflation would ease in the second half of 2026, stating that current monetary policy is well-positioned. The US Treasury upwardly revised its third-quarter borrowing estimate to $739 billion, an increase of $68 billion from its May projection. Meanwhile, Germany's June real retail sales unexpectedly fell by 1.1%, and China's RatingDog Manufacturing PMI for July registered 50.9, continuing its expansion.

Major Stock Markets

Major US equity indices surged, with the Dow Jones Industrial Average closing at a new record high of 53178, up 1.3%. The S&P 500 gained 1.5% to 7601, nearing its all-time closing high, while the Nasdaq Composite advanced 2.1% to 25914. This broad rally was largely driven by easing geopolitical tensions and strong performance in technology and communication services sectors. European markets were mostly positive, with Germany's DAX rising 1.5% to 26001, a record high, and France's CAC 40 up 1.2% to 8614, reaching its highest level since February 2026, though the UK's FTSE 100 edged down -0.1% to 10858. In Asia, South Korea's KOSPI experienced a significant decline of down -5.1% to 6258, while Hong Kong's Hang Seng Index saw a modest gain of 0.5% to 26009.

Major Government Bonds

Government bond yields broadly declined across major economies as market concerns over inflation eased. The benchmark US 10-year Treasury yield fell down -0.06 percentage points to 4.7%, with the 2-year and 30-year yields also decreasing by 5 basis points and 4 basis points, respectively. Similarly, German 10-year Bund yields dropped down -0.05 percentage points to 3.2%, and UK 10-year gilt yields saw a more substantial fall of 10 basis points to 4.95%. In contrast, Japanese 10-year government bond yields edged up 0.03 percentage points to 2.8%. The US Dollar Index rose 0.1% to 100.0, after some earlier volatility.

Major Commodities

International oil prices plummeted significantly as geopolitical tensions in the Middle East eased following reports of de-escalation efforts. WTI crude futures closed down -5.5% at $80.0 per barrel, and Brent crude futures fell 4.73% to $83.77 per barrel. Gold prices were largely unchanged, settling at $4,106.0 per ounce, while silver saw a modest gain. Copper also advanced 1.7% to $6.5, reflecting a general improvement in risk sentiment across commodity markets.

ISM Manufacturing PMI Overview

The Institute for Supply Management (ISM) reported that the Manufacturing Purchasing Managers' Index (PMI) for July rose to 55.6, surpassing both the previous month's reading of 53.3 and the forecast of 54.0. This marks the highest level since May 2022, indicating a robust expansion in the manufacturing sector.

Components Details

• Production: The production index jumped to 58.5, up from 52.2, reaching its highest level since December 2021.
• Employment: The employment index increased to 52.8 from 49.7, marking its highest point since August 2022.
• Customers' Inventories: This index decreased to 40.7 from 42.3, suggesting that customers' inventories are considered too low.
• Price: The price index fell to 71.1 from 73.0, indicating a slower rate of price increases.
• Backlog of Orders: The backlog of orders index rose significantly to 55.0 from 50.5.
• Exports: The exports index improved to 53.0 from 48.5, indicating a return to growth.
• Imports: The imports index climbed to 55.7 from 52.9, showing increased demand for imported goods.

Eurozone PMI Overview

The Eurozone's Purchasing Managers' Index (PMI) for July has shown stronger-than-expected performance across both manufacturing and services sectors. The Manufacturing PMI recorded a slight decrease to 51.9 from the previous 52.0, but still surpassed the forecast of 51.5. The Services PMI rose to 51.6, significantly higher than both the previous 49.4 and the forecast of 49.8. The Composite PMI, which combines both sectors, increased to 51.9 from 50.0.

European Countries PMI Details

In Germany, the Manufacturing PMI remained steady at 52.2, while the Services PMI improved to 49.6 from 48.6. In France, the Manufacturing PMI slightly decreased to 49.8 from 50.0, whereas the Services PMI saw a notable rise to 49.8 from 46.8. These figures indicate a mixed performance across the major economies in the Eurozone, with services showing more significant improvements compared to manufacturing.

Macroeconomics

Global macroeconomic focus was on currency markets, with reports of Japan intervening to curb yen depreciation, possibly with US support, leading to a significant strengthening of the yen against the dollar, with the USD/JPY pair falling -1.7% to 157.4; US Treasury Secretary Yellen commented that the yen appears "seriously undervalued." The Bank of Japan maintained its 1% interest rate, but a dissenting vote for a hike emerged, and Governor Ueda signaled potential for faster future rate increases. In the US, June PCE inflation turned negative month-over-month, with core PCE at 0.1%, while Q2 GDP growth was 1.5%. The Chicago PMI rose to 57.6 in July, and consumer sentiment improved. The Eurozone saw its July CPI rise to 2.9% and core CPI rebound to 2.5%, while China's July manufacturing PMI fell to 49.2.

Major Stock Markets

US equity markets closed higher, with the S&P 500 gaining 0.7% to 7490, the Nasdaq Composite rising 1.0% to 25374, and the Dow Jones Industrial Average advancing 0.5% to 52485. This was largely driven by strong earnings from major technology companies, notably Amazon, which surged over 15% on robust cloud services performance. Conversely, Apple shares fell more than 7% due to weaker-than-expected services and Greater China revenue, while US memory chip stocks also declined. European markets were mostly positive, with the Euro Stoxx 50 up 1.53%. In Asia, South Korea's KOSPI index saw a substantial rally of 17.9% to 6596, while Hong Kong's Hang Seng Index posted a modest gain of 0.1% to 25884, though Chinese A-shares experienced broad declines.

Major Government Bonds

Government bond yields saw a notable increase, reflecting persistent inflation concerns and central bank rhetoric. The benchmark US 10-year Treasury yield rose by 0.08 percentage points to 4.7%, marking its highest level since January 2025 and a significant monthly increase of over 30 basis points for July. The 30-year Treasury yield also climbed by about 5.6 basis points, reaching 5.27%, a level not seen since July 2007, while the 2-year Treasury yield similarly advanced to 4.29%.

Major Commodities

Commodity markets presented a mixed picture. Oil prices rose, with WTI crude increasing by 3.2% to $83.4 per barrel and Brent crude gaining 1.22% to $90.12 per barrel, fueled by ongoing geopolitical tensions in the Middle East and concerns over the Strait of Hormuz. For the month of July, both WTI and Brent crude posted substantial gains exceeding 22%. Conversely, precious metals declined, with spot gold falling -1.5% to $4098.6 per ounce and spot silver also dropping 1.89% to $57.87 per ounce.

Highlight

The July MM Fundamental Index reports reveal significant movements across major global markets. US stocks have shown a notable increase, with the latest stats at 4.44 compared to the previous 2.99. In contrast, Taiwan stocks have dropped to 1.56, marking the lowest level since June 2025. Japan stocks have reached their highest level since February 1995, with a current stat of 2.15. Emerging Market stocks have decreased to 1.29, the lowest since April 2025.

Components

US Bonds have increased to 0.48 from 0.23. Investment Grade Corporate Bonds have dropped to 3.57, the lowest since July 2023, while High Yield Bonds have decreased to -0.14, the lowest since November 2023. The US Dollar has improved slightly to -0.7 from -2.12. The Japanese Yen has fallen to -1.76, the lowest since February 2025. Oil prices have decreased further to -4.86 from -4.54. Copper has surged to 5.61, reaching its highest level since April 2005.