Market drivers and catalysts
Equities: Tech-led U.S. drop on AI hardware margin worries; Europe and UK fell on bank-tax fears and softer semis; Asia mixed into U.S. PCE with Japan lower and Hong Kong higher
Volatility: Holiday closure; VIX mid-teens; macro in focus; SPX ±~50 next session
Digital Assets: BTC ~108k; ETH ~4.4k; ETF flows uneven; altcoins follow majors; macro in focus
Fixed Income: Heavy corporate issuance in focus ahead of US jobs report
Currencies: Euro gains strength above 1.17
Commodities: Silver surges to a 14-year high above USD 40, Gold near record
Macro events: US markets closed. Eurozone & UK Aug. Manufacturing PMIs (final)
Macro headlines
US Core PCE price index rose to a 2.9% annual rate, its highest since February, matching forecasts, while the monthly core index increased by 0.3%. The all-items index had an annual rate of 2.6% and a 0.2% monthly gain. The Fed uses the PCE index for forecasting, focusing on core inflation for long-term trends.
U.S. personal spending rose 0.5% to $20.802 trillion in July 2025, matching expectations and marking the sharpest rise in four months. Durable goods spending rebounded by 1.9%, while services grew steadily at 0.4%. Nondurable goods nearly stalled at 0.1%.
Germany's annual inflation rose to 2.2% in July 2025, surpassing June's 2% and expectations of 2.1%. It's the highest since March, with goods inflation at 1.3%, driven by food prices, and a smaller energy dip. Services inflation remained at 3.1%, and core inflation at 2.7%.
The U.S. goods trade deficit grew to $103.6 billion in July 2025, exceeding expectations. Imports rose 7.1% to $281.5 billion, led by industrial supplies and consumer goods. Exports fell 0.1% to $178 billion, with declines in industrial supplies and consumer goods partially offset by gains in automotive vehicles.
- Fed's Daly (2027 voter) said policy will soon adjust as tariffs increase inflation and the labor market slows. She considers tariff-related price hikes temporary but stressed action is needed to avoid labor market harm.
The Caixin China Manufacturing PMI fell to 49.5 in July 2025, down from 50.4 in June, below expectations. Factory activity contracted amid declining export orders and trade uncertainty. Output and employment dropped, while purchasing expanded. Input costs rose, but selling prices fell due to increased competition.
India’s PM Modi, on his first visit to China in seven years, met with President Xi Jinping to reset relations and with President Putin as Trump's recent actions have led India to seek its own path and partners, with Modi speaking with Ukraine's President Volodymyr Zelenskiy ahead of his trip to China and reiterating his call for peace.
Macro calendar highlights (times in GMT)
US and Canada Labor Day Holiday
August HCOB Manufacturing PMIs (final) from Italy (0745), France (0750), Germany (0755)
0800 – Eurozone August HCOB Manufacturing PMI (final)
0830 – UK August S&P Global UK Manufacturing PMI (final)
0830 – UK July Mortgage Approvals
Earnings events
Note: earnings announcement dates can change with little notice. Consult other sources to confirm earnings releases as they approach.
Tue: Alimentation Couche-Tard, ZScaler
Wed: Salesforce, Figma, Hewlett Packard, Dollar Tree,
Thu: Broadcom, Copart, Lululemon
Fri: Kroger
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: U.S. stocks slipped Friday with megacap AI plays under pressure: S&P 500 −0.6%, Nasdaq −1.2%, Dow −0.2%. Nvidia −3.3% as the AI complex cooled post-earnings, while Marvell −18.6% on a weak outlook. Dell −8.9% after higher manufacturing costs for AI servers offset strong demand signals.
Europe: Europe softened as semis and software lagged and UK banks slumped on renewed talk of taxing interest on reserves: STOXX 600 −0.6%. ASML −2.7% and SAP −2% paced tech declines. In London the FTSE 100 −0.3% as NatWest −4.6%, Lloyds −3.4%, and Barclays −2.3% fell on the think-tank proposal.
Asia: Regional tone was mixed into the U.S. PCE print: Nikkei 225 −0.3% to 42,718, Hang Seng +0.5% to 25,078 and CSI 300 +0.7%. Hong Kong firmed with broader Asia ex-Japan modestly higher, while Japan eased as chip weakness offset currency support. Alibaba jumped 13% on ai optimism underpinned by reports it is testing a new in-house AI inference chi and stable manufacturing output.
Digital Assets
Bitcoin holds around $108k and ether near $4.40k in quiet holiday trade, with majors consolidating after last week’s pullback. Spot ETF flows were choppy into month-end: IBIT and peers saw alternating in-/out-flows, while ETHA’s mid-August surge has cooled, showing lighter demand. Altcoins are mostly moving in step with Bitcoin and Ethereum, without much separate momentum of their own. The main focus this week will be U.S. data and market reopen, which could reset sentiment across crypto.
Volatility
VIX firmed into the long weekend, closing Friday at 15.36 as SPX slipped, and U.S. cash equities and options are shut today for Labor Day. Holiday closure typically dampens realized swings, but near-term focus snaps back to Tuesday’s ISM and Friday’s jobs report. Options markets still price contained risk after August’s drift higher in vol. For context: VIX tracks 30-day implied volatility, while VIX1D gauges the current trading day. Expected SPX move: using VIX1D near ~11–12, one-day pricing implies ≈ ±50 SPX points (~0.8%) for the next cash session.
Fixed Income
US Treasuries ended mixed on Friday as a waning month‑end bid and an anticipated heavy corporate calendar (see below) weighed on the long end, while the front end firmed with two‑year yields about 1bp lower as Fed rate‑cut expectations stayed intact, producing a twist steepener; the long end was roughly 4bp cheaper on the day, with cross‑market bear‑steepening in bunds and gilts reinforcing the move.
The pace of new US high-grade bond sales is expected to pick up dramatically this week with syndicate desks forecasting USD 55 billion. Most of the sales will likely occur in a holiday shortened week between Tuesday and Thursday ahead of Friday’s August’s labor report — a critical data point for the Federal Reserve’s rate decision in mid-September. Dealers expect September to be busy with USD 160 billion in bond sales, a step down from last year’s record-setting pace of USD 170 billion.
Commodities
Gold—and especially silver—extended Friday’s strong gains, supported by sticky US inflation, weakening consumer sentiment, incoming rate cuts lowering funding costs, and concerns over Fed independence. Gold trades near the April peak at XAU 3,500, while silver has reclaimed XAG 40 for the first time in 14 years. In relative terms, watch 85.75 in the XAUXAG ratio—the July low—with a break potentially signalling further silver outperformance.
Crude fell in August and has started September softer, though still within established ranges, as fears of a Q4 supply glut are offset by geopolitical tensions. Focus on Beijing, where Xi, Putin, and Modi hold meetings, and the OPEC+ meeting on 7 September. Speculators meanwhile maintained a net short in the two WTI futures contracts for a third week, the first time on record.
Currencies
USD slipped after a PCE report met forecasts, to end the week nearly unchanged against its major peers, before weakening again in early Monday trading as the euro gain strength above 1.17.
Speculators in the futures market maintain an overall bearish dollar view but increasingly that view is being expressed through elevated longs in EUR and JPY while net short positions continue to dominate elsewhere, most notably in CAD and AUD, the latter edging closer to a record bearish stance.
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