All

Morning Macro: 17th Sep

The market has completely priced in a 25 bp cut by the US Federal Reserve, with the Fed’s decision due at 19:00 BST this evening. All eyes will fall on the Fed’s “dot plot”, which shows each Fed official’s rate projection through the end of the year, and gauge Fed chair Jerome Powell’s tone as he answers questions about the economy. The last meeting saw two governors dissent for the first time since 1993, while Trump-nominated Stephan Miran has also now joined the board.

In the meantime, US retail sales came in stronger than expected at +0.6% in August m/m (exp: +0.2%), highlighting that despite cooling labour market data, consumer spending has seen more support. Still, the S&P 500 slipped 0.1% on Tuesday, while the tech-heavy Nasdaq composite eased by 0.1%, ending a six-day win streak. Nevertheless, energy was the best performing sector in the S&P 500 on Tuesday, rising 1.7% amid rising geopolitical tensions amid Ukrainian drone attacks on Russian refineries.

Gold set another all-time high (chart above), testing the $3,700 milestone on Tuesday, but has since eased to around $3,670 per troy ounce, likely on profit taking.

Hong Kong Chief Executive John Lee Ka-chiu unveiled a slew of policies aimed at reviving Hong Kong’s status as a global hub for gold trading, including plans to boost the city’s capacity for holding bullion to more than 2,000 tons over the next three years and establish a central clearing system for gold.

In the UK, inflation held at +3.8% y/y (unchanged from July), its highest level in over 1.5 years. Downward pressure from air fares was offset by motor fuel and prices at restaurants and hotels. Food inflation hit +4.8%, its highest level since early 2024.

US President Donald Trump has signed an executive order to delay the ban on TikTok until 16 Dec amid reports of talks on a buyer for TikTok’s US operations. The United States and China agreed on a framework for transferring TikTok’s US operations to the US at ministerial-level trade talks in Madrid. Trump and Chinese President Xi Jinping are expected to have a phone call on 19 Sep to reach a final settlement. As per the Wall Street Journal, US IT giant Oracle is considered a leading buyer.

Key data today

Euro Area CPI (10:00 BST)

US MBA Mortgage Applications (12:00 BST)

US Fed interest rate decision and economic projections (19:00 BST)

Morning Macro 16th September:
The US is heading for another monumental TACO buffet with China, as Trump prepares to speak with President Xi on Friday. So far, the discussions have been about TikTok. While Bessent said the US doesn’t plan to impose any tariffs or sanctions on China unless the EU does too. Bessent also added that the next meeting could result in another 90-day tariff truce – ahead of the November 10 deadline.
As the Fed is meeting today to announce its interest rate decision on Wednesday evening, the DC Circuit rejected President Trump’s bid to fire Fed Governor Cook, allowing her to participate in this week’s Fed interest rate decision. In addition, the Senate confirmed White House Council of Economic Advisers Chair Stephen Miran to join the Federal Reserve Board of Governors.
Foreign investors are pouring into US stocks and bonds – albeit at a reduced pace – but they are dumping dollar risk at record speed, Deutsche Bank says. The dollar hedging activity has risen to record levels as investors are reluctant to be exposed to USD fluctuations, even as foreign holdings of US stocks and bonds rose to a record of $33.6 trillion in June, according to the Treasury Department.
The reduced appetite for dollar holdings, following markets’ expectations of two – with even three in play – quarter-point cuts, could provide further support for the EUR/USD if it tests the break line (Chart 1, Bloomberg).

Meanwhile, passenger vehicle sales in India slipped 9% y/y in August to 280,839 units, snapping July’s modest growth, SIAM data showed. While on a m/m basis, sales fell 6.8% in August after a sharp 9.2% rise in July.
And in the UK, regular pay growth slowed to 4.8% y/y in the three months to July 2025, the weakest since May 2022, with both public and private sectors easing. Real wages still rose 0.7%, led by strong gains in retail, hospitality, and services.
The Bank of England is set to slow its quantitative tightening, trimming gilt sales from £100bn to below £72 billion annually, while keeping rates steady at 4%. The move reflects bond market volatility and rising borrowing costs, with the BoE noting QT’s impact on financing conditions remains modest. The 30-year gilts are trading near 5.5% – the highest among G7 countries (Chart 2, Bloomberg). The UK is in need of more money, but the fiscal concerns are costing even more. The recently issued 10-year gilt showed that an additional 8.25bps on the yield resulted in a £100 million loss of additional funds!

Data today – EA Industrial Production, German Economic Sentiment and Current Conditions, Canadian Inflation rate, US retail sales, import and export prices, manufacturing and industrial production