Global News Summary: 6 - 12 September 2025

Between 9–12 September, markets balanced optimism over imminent Fed rate cuts with persistent inflation risks and political turbulence in Europe and Japan. US CPI rose 2.9% YoY and core held at 3.1%, reinforcing the Fed’s challenge of cutting rates into sticky inflation. Gold surged above $3,600/oz, Treasuries rallied, and the dollar weakened as investors priced in two or more cuts by year-end. France plunged into political crisis after PM Bayrou lost a confidence vote, sending French yields higher. Japan faced political instability with PM Ishiba resigning, while GDP surprised at +2.2% annualized. AI remained a hotbed of capital flows, with Microsoft signing a $20B AI infrastructure deal, Nvidia and OpenAI pledging major UK investments, and Apple planning an AI-powered search launch. Despite risk-on behavior in tech, consumer confidence hit its lowest since May and long-term inflation expectations ticked up, suggesting this late-cycle rally is fragile.

United States (USD)

• Markets & Policy:

  • Gold prices surged above $3,600/oz, and Treasuries rallied as markets braced for Fed easing.

  • Dollar gauge continued to fall after weak jobs data and softer PPI.

  • Core CPI: +3.1% YoY; headline CPI: +2.9% YoY; PPI: +2.6% YoY (below 3.3% forecast).

  • Fed expected to cut 25 bps in September, with market odds pricing 2–3 cuts total in 2025.

• Trade & Diplomacy:

  • Treasury Sec. Bessent set to meet Chinese VP He Lifeng in Madrid, signaling intensifying trade diplomacy.

  • Trump continued pressure campaigns, demanding higher Chinese purchases of US goods and letting investors price in a longer truce.

Europe (EUR/GBP/CHF)

• France:

  • PM François Bayrou lost a confidence vote, government collapsed after only 9 months.

  • French borrowing costs spiked, risk premiums over Bunds widened.

• Eurozone:

  • ECB held rates at 2%, emphasizing economic resilience despite US tariffs.

  • Lagarde said risks are "more balanced," ruling out more cuts for now.

• UK:

  • Services PMI rebounded to 54.2 (Jul 51.8), pointing to improved activity.

  • Bailey warned that the timing of future cuts is “considerably more uncertain.”

  • Long-term borrowing costs hit highest since 1998, straining public finances.

• Switzerland:

  • SNB signaled willingness to cut below zero again if necessary, keeping CHF relatively strong.

Japan (JPY)

• PM Shigeru Ishiba’s resignation created uncertainty, pressuring JGBs.

• GDP grew at +2.2% annualized (est. +1%), driven by private consumption.

• BOJ watchers now expect next rate hike by January; Deputy Gov. Himino reaffirmed gradual reduction of bond buying.

China (CNY)

• RMB hit its strongest level since Trump’s election, as Beijing signals tolerance for gradual appreciation.

• China imposed 33–78% anti-dumping tariffs on US optical fiber.

• Tourism-driven windfall estimated at $42B in 2025, offsetting weak consumer data.

Economic Growth

• US GDP Q2: Revised up to +3.3% annualized.

• Europe: Growth resilient but clouded by political uncertainty.

• Australia: Household spending growth accelerating, GDP +0.6% QoQ.

Jobs & Labor

• US: NFP +22k in Aug (cons +75k), job market stalling. Unemployment 4.3%.

• Job openings fell to 7.18M (cons 7.38M), fueling rate-cut bets.

Debt & Yields

• US 10Y: 4.06% by Sept 12 (down from 4.23% late August).

• Germany 10Y: 2.66%, French spreads widened on political turmoil.

• UK 10Y: 4.65–4.7%, near multi-decade highs.

• Japan 20Y: 2.69%, highest since 1999.

Artificial Intelligence (AI)

• Microsoft: $20B Nebius deal for AI infrastructure.

• OpenAI: Near $100B equity conversion deal with Microsoft, also announced UK data center investment with Nvidia.

• Apple: Plans AI search product for 2026.

• Anthropic: Halts AI services to China-owned firms, a first for US AI companies.

• SK Hynix: Completed HBM4 memory chip, critical for AI accelerators.

Inflation

• Inflation pressures persist globally:

  • US: CPI +2.9%, Core +3.1%, sticky services inflation.

  • EZ: Inflation +2.1% (above ECB target).

  • UK: Inflation at 3.8% in July, highest gap vs. EZ in 2 years.

  • Japan: Tokyo CPI eased to 2.5%.

Recession Risks

• Growing focus on labor market weakness as a leading indicator.

• Bond market pricing aggressive cuts could reflect expectations of economic slowdown by late 2025.

• Strategists warn this “good news rally” has historically preceded market peaks.