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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

Morning macro 15th September
S&P 500 & Nasdaq both make new all-time highs, gold new all time closing high, silver, new cycle high, while consumer sentiment is now lower than the financial crisis lows. Hard for the Fed to cut 50bp though this week with assets so strong.
THE US GOVERNMENT SPENT $345 BILLION MORE THAN IT COLLECTED IN TAXES IN AUGUST
TRUMP: READY TO DO MAJOR SANCTIONS ON RUSSIA WHEN ALL NATO NATIONS STOP BUYING OIL FROM RUSSIA
*FRANCE CUT TO A+ FROM AA- BY FITCH; OUTLOOK STABLE
Bearish dollar bets continue into Fed week (Chart 1, CFTC, Bloomberg)
As well as high electricity pricing wrecking UK manufacturing, the shock hike of a REVENUE tax on pharmaceutical companies to 20%+ (up from 5%) has prompted companies like Merk and AZ to pause investment in the UK.
Hedge Funds bought Tech stocks at the fastest pace in 7+ months this week. (Chart 2, @Marlin_Capital)

Gold prices have topped the inflation-adjusted price set 45 years ago.(Chart 3, Bloomberg)
UMICH PRELIM SEPT. CONSUMER SENTIMENT FALLS TO 55.4; EST. 58 – Bloomberg. *Stagflation is hammering the middle class. This sentiment reading is currently just a pinch lower than the worst of the financial crisis, in a range associated with June and July of 2022, when inflation was at 8%. (Chart 4, @ConvertBond, Bloomberg)
ELON MUSK HAS ‘COMPLETED’ POLITICAL SERVICE AND IS BACK AT TESLA
Data this week –
Monday – China retail sales, unemployment rate, fixed asset investment
Tuesday – UK unemployment, EZ industrial production & consumer sentiment, US IP & retail sales
Wednesday – US Federal reserve meeting, UK & EZ inflation, US mortgage applications
Thursday – Australian employment, BUK BOE rate decision, US jobless claims
Friday – Japanese inflation data, UK retail sales

Morning Macro September 12th:
The S&P 500 closed at a new all-time high and is now up +36% since the April 2025 bottom. That’s +$15 TRILLION in market cap in 5 months. This is the most since the COVID recovery and 1% point less than the Great
Financial Crisis recovery. (Chart 1, Bloomberg)
Yesterday’s CPI data from the US showed inflation broadly in line with forecasts: headline CPI rose 2.9% y/y and the core measure held at 3.1%. On a m/m basis, inflation rose 0.4% as shelter, food and gasoline prices were up m/m. Although the yearly measure showed steady core inflation, the monthly counterpart picked up, boosted by increased airline fares and used car prices.
And the initial jobless claims for the week ending 5 September jumped to 263k, the highest in four years and well above consensus at 235k. The four-week moving average surged by almost 10k to 240.5k, the steepest increase since December 2020! Meanwhile, unemployment claims came lower than expected at 1.932 million in the last week of August. Rising layoffs, fewer new jobs, yet fewer people claiming benefits – that points to a contracting labour force!
Treasuries welcomed the weakness, with the 10-year yield sliding to 4%, its lowest in 5 months (Graph 2, Bloomberg). The OIS market raised the stakes, now expecting a cut at each of the next two Fed meetings and over an 87% probability of a third cut by year end! While the DXY fell from above 98 to 97.50 this morning.
Economic activity in New Jersey, Illinois, Virginia, Georgia, Washington, Iowa, and Oregon is contracting, this comes as goods-producing sectors like agriculture, manufacturing, and construction are already in recession. But California, Texas, and New York are expanding and together make up for nearly one-third of US GDP, as healthcare real estate and technology are booming. And now tech stocks reflect a record 37% of the total US stock market, exceeding the 2000 Dot-Com Bubble peak by 4 percentage points!
In the UK, things aren’t progressing as the economy stalled in July after June’s 0.4% growth, as gains in services (+0.1%) and construction (+0.2%) were offset by a sharp 0.9% fall in production. Manufacturing slumped 1.3%, led by steep drops in electronics and pharmaceuticals. Over the three months to July, GDP rose 0.2%, while annual growth held at 1.4% – slightly missing the forecasts.
Following the ECB’s decision to leave the main refinancing rate at 2.15%, French inflation eased to 0.9% in August from 1% in July, as services price growth slowed and manufactured goods prices fell further, alongside energy prices. On a monthly basis, CPI rose 0.4%, driven by a rebound in clothing and footwear after summer sales. While Spain’s inflation held at a five-month high of 2.7% in August, transport costs accelerated but were offset by softer food inflation. Core inflation edged up to 2.4%, its highest in four months.
Data today – Michigan consumer data, India inflation rate, Chinese loan growth