🗓 Tuesday, September 2, 2025
► Europe pressured – inflation ticks up, politics weigh
European markets started positive into September but came under renewed pressure again today as inflation in the Eurozone ticked up slightly above the ECB’s target to 2.1% YoY, raising questions about the rate path. Losses in US pre-market trading also weighed on Europe. The Stoxx 600 -0.65%, DAX -1.1%, CAC 40 flat (+0.1%), FTSE 100 -0.35%, Italy’s FTSE MIB -0.6%, IBEX -0.9%. French and Italian bond yields widened, highlighting ongoing political risk premiums. Bunds edged weaker, 10Y at 2.78% (+3bps), while UK gilts sold off further, 10Y at 4.79% (+4bps). EUR/USD 1.164 (-0.6%), GBP/USD 1.340 (-1.1%), USD/JPY 148.5 (+0.9%).
► Wall Street cautious – valuations, Fed & tariffs in focus
US futures weakened as Wall Street returned from Labor Day, with investors concerned about stretched valuations near record highs and inflation still sticky. Futures: S&P 500 -0.6%, Nasdaq 100 -0.7%, Dow -0.4%. Nvidia fell -1.3% premarket, continuing recent tech weakness, while Alphabet (-0.9% in pre-market) and other big tech stocks such as AVGO (-1.5%) also slipped. Rising yields added pressure with US 10Y at 4.285% (+6bps), and 30Y touching 4.97%. The dollar rebounded strongly (DXY +0.6%). Tariff uncertainty after a court ruling challenged Trump’s broad levies added further noise. Traders await Friday’s NFP as the next key data point for Fed policy, with swaps implying a 90% chance of a September cut.
► Asia mixed – China underperforms, Japan steadier
Asian equities were uneven, reflecting global caution. Shanghai -0.5% and Shenzhen -2.1% declined as investors took profits after strong August inflows. Hong Kong’s Hang Seng -0.5%. By contrast, Japan’s Nikkei +0.3% and Korea’s Kospi +0.9% saw moderate gains. Taiwan -0.2%, India’s Nifty -0.1%, Australia’s ASX -0.3%. FX was dollar-dominant: USD/CNY 7.15 (+0.1%), USD/JPY 148.5 (+0.9%), AUD/USD 0.651 (-0.6%).
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