Fin-X Weekly 15th September 2025

Global equities and the gold price hit new highs as US inflation and employment data reinforced expectations of central bank easing, while the oil price strengthened after Israeli attacks on Hamas in Qatar and Russian drones landed in Poland.

Australian consumer confidence weakened, while the NAB business survey was more upbeat.

Tariffs were also in the news, with the Supreme Court preparing to rule on the legality of the tariffs imposed on imports from other countries.

Attention in the week ahead will centre on the Federal Reserve meeting, Chinese activity data, and Australia’s employment report.

Global equities advanced to fresh record highs last week, supported by expectations that the Federal Reserve is preparing to ease monetary policy settings following the release of US inflation and employment data. The gold price also made new highs.

Oil prices firmed after Israel carried out attacks on Hamas targets in Qatar last week. Russian drones also landed in Poland, escalating tensions with NATO members. President Trump reiterated that NATO allies must be prepared to align with US tariffs on China and India to pressure Russia into negotiations. Discussions of further sanctions on Russia’s oil trade and financial sector were also reported.

In Japan, sentiment was unsettled after Prime Minister Shigeru Ishiba announced his resignation, prompting speculation over the fiscal direction of the next Liberal Democratic Party administration. The Topix added +1.8% over the week as investors see fiscal stimulus as more likely under the next LDP leader, which helped temper the pullback.

In corporate news, Oracle’s share price surged by +25.5% over the week after the company reported a sharp increase in bookings and provided an upbeat outlook for its cloud infrastructure business.

The Australian share market traded below the August record highs despite signs of resilience in business activity. NAB’s survey showed improving business conditions, reflecting easing cost pressures and firmer forward orders.

Westpac consumer confidence fell - 3.1% in September, extending its run below the neutral 100 threshold to 43 consecutive months, although the trend is gradually improving. Labour market data due out on Thursday are expected to show the unemployment rate holding at 4.2%.

The domestic banking sector continues to shed staff. NAB confirmed plans to cut 410 roles in its technology and enterprise division, adding to ANZ’s earlier announcement of 3,500 job losses. NAB stated that the restructuring would impact 728 roles overall, with 127 new positions to be created in offshore hubs. Westpac also revealed 1,500 redundancies as CEO Anthony Miller presses ahead with efficiency measures.

In Europe, bond yields rose modestly as the ECB left rates unchanged but adjusted forecasts. Growth expectations were trimmed, while the 2025 inflation outlook was revised up from +2.0% to +2.1%.

Political instability in France compounded upward pressure on European bond yields. Prime Minister François Bayrou’s government lost a confidence vote, making him the country’s third leader in just over a year to fall. President Emmanuel Macron appointed Sebastien Lecornu as France’s fifth Prime Minister in two years as the government struggles to pass a fiscal plan.

US Treasury yields were steadier ahead of this week’s Federal Reserve meeting. Labour market developments, however, raised concerns that underlying conditions are weaker than previously thought. Preliminary benchmark revisions suggested that -911k fewer jobs were created in the year to March than earlier reported, equivalent to a monthly pace of -71k rather than 147k. The revisions indicate that labour market momentum is being lost from an even weaker position than previously thought. Weekly initial jobless claims also rose by +27k to 263k in the first week of September, the highest since late 2021. However, these may have been distorted by the public holiday last week.

Inflation pressures moderated further.

US headline CPI accelerated to +2.9% over the year to August with core CPI ex-food and energy steady at +3.1%, both being in line with consensus forecasts.

Producer prices, however, surprised substantially on the downside, essentially undoing last month’s high business prices scare. Headline PPI rose by +2.6% from a year earlier compared with a revised +3.1% in July, while the core measure slowed to +2.8% from a revised +3.4%.

Although inflation remains above target and tariff costs will likely still be passed on to consumers, the eventual softening of shelter costs and labour market weakness support expectations of monetary easing. A -0.25% Fed Funds cut to the 4.00% - 4.25% range is widely anticipated on Wednesday, though a larger rate cut could be warranted. Investors will be paying close attention to the outlook and watching for any further trimming of quantitative tightening.

A federal judge temporarily blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook, who is contesting allegations of mortgage fraud. The decision appears to reduce the risks of a suddenly more dovish configuration of the FOMC.

Separately, the Supreme Court agreed to fast-track a case testing the legality of Trump’s wide-ranging use of tariffs under the International Emergency Economic Powers Act. Oral arguments are scheduled for November. The case could have broad implications for the fiscal and economic outlook, as the Court weighs whether authority to impose tariffs rests with Congress rather than the presidency.

Following pressure from the White House, Mexico announced tariffs of up to +50% on imported Chinese vehicles and parts in response to surging shipments, which rose +24% yoy to 280,100 units in the first half of 2025.

Chinese economic data continued to underline the challenges facing policymakers. Exports rose +4.4% yoy in August, the slowest pace in six months, while imports increased just +1.3%. Exports to the US fell sharply, down -33% yoy, reflecting ongoing trade tensions. Domestic demand indicators remained subdued, with consumer prices falling -0.4% from a year earlier, the first negative reading in three months. Producer prices declined for the 35th consecutive month, contracting -2.9% yoy but at a slower pace than July’s -3.6% annual fall. With nine straight quarters of economy-wide price declines, China remains firmly in deflationary territory.

Last week was the busiest period since 2021 for the IPO market, with six IPOs raising more than $4 billion. The median listing opened 31% above the offer price, showing strong demand despite a weakening of the labour market.

This week brings a series of important data releases and central bank meetings. Investors will focus on Chinese activity figures later today, the Federal Reserve’s decision on Wednesday, and Australian employment on Thursday. US retail sales and industrial production will also be closely watched, alongside European and Japanese inflation releases. The Norges Bank meets on Thursday, with expectations tilted towards a rate cut, while the Bank of Japan is expected to keep rates unchanged at 0.5% on Friday.

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