Morning wrap (29.08.2025)

Nvidia shares fell 0.79% yesterday following mixed earnings that were slightly better than expected. This decline was less pronounced than the drop seen at the start of the session.

European index futures are trading lower ahead of the opening bell. The DE40 is down 0.11%, while the FRA40, despite ongoing political risks, is only down 0.03%.

Asian markets are generally optimistic. The CH50cash is up 0.93% and the CHN.cash has risen 0.11%. However, the JP225 has shed 0.3%, as Morgan Stanley warns against betting on the Chinese market.

Crude oil gained yesterday, climbing above $64 per barrel. German authorities believe a meeting between Putin and Zelensky will not take place, which introduces uncertainty regarding the war's future.

The market is awaiting the release of the US PCE Core inflation data. The forecast for July points to an increase to 2.9%. If the inflation reading does not surprise to the upside, a September rate cut from the Fed should become more likely.

Japan's unemployment rate has fallen, which is a theoretically positive signal for a potential interest rate hike. Meanwhile, inflation in the Tokyo region has fallen to 2.5% year-on-year from 2.9% year-on-year.

Japanese industrial production declined by 1.6% month-on-month, a steeper fall than the expected 1.1% decrease.

Japanese retail sales rose by a modest 0.3% year-on-year, significantly underperforming the forecast of a 1.8% increase.

EUR/USD remains elevated, though below 1.17. The Fed's Christopher Waller indicated that US interest rates are heading towards a neutral level, but the key question remains the pace of cuts. Increasingly dovish commentary points to a high probability of a rate cut in September, with the market currently pricing in an 85% chance.

Today marks the final day of the month, which could lead to increased volatility in financial markets. Particular attention should be paid to markets with established trends, such as US equities and commodities like gold.

Bitcoin is under renewed pressure after yesterday's rebound, currently testing the $110,000 level.

Gold is solidifying its position above $3,400 per ounce ahead of key inflation data from the United States. Should inflation come in below expectations, there is a theoretical possibility of it closing near its historical highs. However, if inflation surprises with a higher reading, there is a risk of a correction.

Gold has tested the $3,400 level five times since its historical daily highs in April. This weekend, we await the release of PMI data from China.