EUROPEAN INFLATION: Core EZ HICP remains at 2.35% to 2dp - but rounds up to 2.4%

The Presidential Election Management Committee of the governing conservative Liberal Democratic Party (LDP) met earlier on 17 Sep to sign off on plans for a truncated election hustings campaign. With the LDP leadership election to be formally called on 22 Sep, and held 12 days later on 4 Oct, the Committee has decided that candidates will speak at just three regional events in the Tokyo, Aichi, and Osaka prefectures on 24 Sep, 26 Sep, and 2 Oct respectively. In the 2024 LDP leadership contest eight in-person events were held. 

• Political betting markets show Agriculture Minister Shinjiro Koizumi as favourite to take over from outgoing PM Shigeru Ishiba. Polymarket data shows Koizumi with a 60% implied probability of victory, compared to 34% for former Economic Security Minister Sanae Takaichi. Former Chief Cabinet Secretary Yoshimasa Hayashi trails in a distant third place with 5.3%.
• One of the key issues for LDP members and lawmakers in the election is which candidate can win back conservative voters who have deserted the LDP in favour of the right-wing Sanseito party.
• Koizumi, viewed as more liberal than Takaichi, may have seen his chances improved by endorsement of Finance Minister Katsunobu Kato. Kato was a close ally of the late PM Shinzo Abe, and the prominent conservative becoming Koizumi's campaign chief could win round support from those wavering following Koizumi's poor debate performances in the 2024 contest, which scuppered his campaign.

Chart 1. Political Betting Market Implied Probability of becoming next Japanese PM, %

Source: Polymarket

• MNI: EUROZONE AUG FINAL HICP +0.1% M/M, +2.0% Y/Y
• EUROZONE AUG FINAL CORE HICP +0.3% M/M, +2.3% Y/Y
• EUROZONE AUG FINAL SERVICES HICP +0.3% M/M, +3.1% Y/Y

The trend condition in WTI futures is unchanged - a bear cycle remains intact and the latest recovery is considered corrective. The pullback from the Sep 2 high highlights a possible recent reversal and the end of a corrective phase between Aug 13 - Sep 2. Initial resistance to watch is $66.03, the Sep 2 high. Key short-term resistance has been defined at $69.36, the Jul 30 high. A stronger resumption of weakness would open $57.71, the May 30 low. Gold remains in a clear bull cycle and the yellow metal is trading at its recent highs. A fresh all-time high, once again this week, confirms a resumption of the primary uptrend and an extension of the sequence of higher highs and higher lows. The next objective is $3705.2, a Fibonacci projection. Initial firm support lies at $3547.7, the 20-day EMA. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend.

• WTI Crude down $0.48 or -0.74% at $64.02
• Natural Gas down $0 or 0% at $3.102
• Gold spot down $25.19 or -0.68% at $3665.33
• Copper down $9.4 or -2% at $459.65
• Silver down $0.96 or -2.26% at $41.6271
• Platinum down $20.07 or -1.43% at $1380.87