MNI US OPEN - FOMC Meeting Beckons, Senate Appoints Miran
EXECUTIVE SUMMARY
- SENATE CONFIRMS WHITE HOUSE'S MIRAN AS FED GOVERNOR
- TRUMP CANNOT FIRE FED'S COOK, APPEALS COURT RULES
- JAPAN REFORMER KOIZUMI JOINS LEADERSHIP RACE
- UK LABOUR DATA BROADLY IN LINE; WAGE DATA TRACKING BELOW BOE PROJECTION
Figure 1: Betting market implied probability of year Sir Keir Starmer leaves office as PM, %
Source: Smarkets
Figure 2: South Korea's KOSPI Index rallies to new record high
Source: MNI/Bloomberg Finance L.P.
MNI CENTRAL BANK PREVIEWS
Hidden PDF: A Reluctant Return to Easing
The Federal Reserve is set to resume its easing cycle at the September 16-17 meeting with a 25bp cut to the funds rate range to 4.00-4.25%. The decision to cut after a 5-meeting pause was well-telegraphed by Chair Powell, whose Jackson Hole speech described a “shifting balance of risks” toward a weaker labor market that “may warrant adjusting our policy stance”. The updated quarterly projections aren’t likely to bring many changes to the macroeconomic variables, but as usual the signal sent from the Fed rate “Dot Plot” will garner attention. A Committee split between expecting one or two further cuts this year is likely, keeping each of the remaining meetings of 2025 “live”.
MNI NORGES BANK PREVIEW: Another Close Call
At the start of the month, analyst and market expectations were fairly comfortably in favour of a 25bp Norges Bank cut on September 18th. However, domestic data released over the past two weeks have made the decision a much closer call. We currently lean against consensus in favour of a hold at 4.25% - a risk we thought markets were underappreciating even before the recent run of domestic data.
MNI BCB PREVIEW: Copom to Maintain Hawkish Messaging
Analysts are unanimous that the Copom will leave the Selic rate unchanged at 15.00% for a second consecutive meeting on Wednesday, as it maintains its high for longer stance. Although inflation has continued to edge lower, it remains well above target, while unanchored inflation expectations are still a concern for the Board, despite a further gradual improvement. As such, there are unlikely to be any surprises in the post-meeting statement, given the firm guidance of maintaining the Selic rate at current levels for “a very prolonged period” to ensure the convergence of inflation to target.
NEWS
US (MNI): Senate Confirms White House's Miran as Fed Governor
The Senate late Monday confirmed White House Council of Economic Advisers Chair Stephen Miran to join the Federal Reserve Board of Governors, serving the final four months of a 14-year term vacated by Adriana Kugler. The vote was 48 to 47. Miran’s fast-tracked confirmation sets him up to appear at the Fed’s Federal Open Market Committee meeting scheduled for Tuesday and Wednesday. The FOMC is expected to cut interest rates by 25 bps for the first time since December on weaker jobs data, and some analysts expect Miran to dissent in favor of an even larger cut.
US (MNI): Trump Cannot Fire Fed's Cook, Appeals Court Rules
President Donald Trump cannot fire Federal Reserve Governor Lisa Cook, according to the U.S. Court of Appeals for the D.C. Circuit, a ruling the Justice Department will likely appeal to the Supreme Court. The government's request for a stay of the lower court ruling was denied in a 2-1 decision. The majority judges were Biden appointees while the dissenting judge was appointed by Trump.
US/INDIA (BBG): US Trade, Defense Teams in New Delhi to Revive Trade Talks
The US and India are stepping up talks to resolve their trade tensions, with two separate teams of officials meeting in New Delhi this week. The Indian team began talks Tuesday morning with the visiting US trade delegation led by Brendan Lynch, assistant trade representative for South and Central Asia, a person familiar with the matter said in New Delhi, asking not to be identified as the discussions are private. The talks are expected to stretch late into the evening, the person said.
ISRAEL (MNI): PM & IDF Confirm Gaza City Ground Operation Underway
Speaking in court as part of giving testimony in his corruption trial, PM Benjamin Netanyahu says "We have launched a powerful operation in Gaza City", effectively confirming that the Israeli Defence Forces (IDF) have begun the full-scale takeover of the strip. Netanyahu claims Gaza City is the last stronghold of Hamas. Even with large-scale airstrikes, the densely packed nature of the city will likely require a different nature of urban warfare for the IDF compared to operations to date, risking a prolonged operation that could drag on for some months.
EU/RUSSIA (BBG): EU Delays Russia Sanctions Proposal to Align With G-7 Priorities
The European Union will delay formally tabling its latest package of sanctions against Russia, according to a European diplomat, after US President Donald Trump demanded stronger European measures as a condition for the US to move forward with its own penalties. The European Commission, the EU’s executive arm, was due to present the proposal, it’s 19th, on Wednesday.
ECB (BBG): ECB’s Kazaks Sees No Reason to Cut Interest Rates at the Moment
European Central Bank interest rates currently don’t need to be reduced, according to Governing Council member Martins Kazaks. “At the current moment, inflation is around 2%, economic growth is I’d say weak,” the Latvian official told TV24 on Tuesday. “At the moment there is no reason to lower rates.” He spoke after the ECB last week held borrowing costs steady for a second consecutive meeting, with most policymakers saying they don’t see the need for further rate cuts — while maintaining the optionality to do so if required.
UK (MNI): PM Starmer in Vulnerable Position, But Likely Safe in Short Term
Prime Minister Sir Keir Starmer remains in a vulnerable position after two weeks of political upheaval that has seen a senior minister, senior aide, and ambassador forced from their positions at the same time as the largest right-wing march in decades, and amid preparations for US President Donald Trump's high-profile state visi on 17-18 Sep. Nevertheless, as Bloomberg noted earlier today, Starmer's position is likely safe for now, given the lack of viable potential replacements as leader of the centre-left Labour Party in the short term.
JAPAN (BBG): Japan Reformer Koizumi Joins Leadership Race
Japan’s Agriculture Minister Shinjiro Koizumi, a reform proponent, says he will run in the ruling party leadership race as the Liberal Democratic Party looks for a successor capable of turning around its prospects and leading the nation. “It’s true that I told my supporters of my intentions,” Koizumi told reporters at his regular press conference on Tuesday, referring to a meeting at the weekend at which he informed local party supporters of his plans to enter the leadership election. “I will put together my campaign step by step as I head toward a formal declaration.”
BOJ (MNI EXCLUSIVE): BOJ Sees Minimum Wage Hike Bolstering CPI
MNI discusses the BOJ's wages outlook. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CHINA (MNI): PBOC Pan Calls for World Financial Governance Reform
MNI (Beijing) Global financial governance should be strengthened by diversifying monetary and cross-border payment systems, enhancing regulatory coordination, and increasing emerging markets’ representation in major international financial institutions, People’s Bank of China Governor Pan Gongsheng wrote in Qiushi magazine on Tuesday. The international monetary system may evolve into a structure where several sovereign currencies coexist, compete and counterbalance, Pan said.
AUSTRALIA (BBG): Australia Pension Fund Hedging to Double in Decade, RBA Says
Australia’s pension funds are set to double their foreign-exchange hedge books over the next decade as the A$4.3 trillion ($2.9 trillion) sector ramps up its exposure to overseas assets, said Reserve Bank Deputy Governor Andrew Hauser. In remarks to the board of CLS Bank International in Sydney on Tuesday, Hauser pointed out that Australia’s pension fund industry — currently the fourth-largest in the world — is projected to grow to 180% of gross domestic product over the next decade from 150% now.
RBA (BBG): RBA Is ‘Pretty Close’ to Inflation and Jobs Targets, Hunter Says
Australia’s central bank is “pretty close” to getting inflation back to the midpoint of its 2-3% target while the economy is near full employment, Assistant Governor Sarah Hunter said. “We are monitoring, we’ll wait and see,” Hunter told an industry event in Sydney on Tuesday. “The board will set policy accordingly. So we never quite know, but right now we hope we can keep things where they are today.”
INDONESIA (BBG): Indonesia Weighs New Central Bank Mandate, Easier Board Removal
Indonesian lawmakers are deliberating whether they should broaden the central bank’s mandate further and expand grounds for the dismissal of its officials. The parliament’s push could set off fresh concerns about the central bank’s autonomy. It follows just days after the government revamped a “burden-sharing” arrangement with BI agreeing to shoulder debt costs of President Prabowo Subianto’s housing and cooperatives programs. Revisions to the law are “still in the discussion stage and is being debated,” according to Mohamad Hekal, a parliamentary commission chair.
S.KOREA (BBG): Korea’s Kospi Rises to Record High as Chip Rally Extends
South Korea’s Kospi advances as much as 1.1% to an all-time high as chip stocks extend their rally on earnings expectations and continued foreign inflows. The gauge rises for 11th session, set for the longest winning streak since September 2019. Foreign investors buy 586b won worth of Kospi equities on a net basis, mostly in tech.
DATA
UK DATA (MNI): Labour Data Broadly In Line; Wage Data Tracking Below BOE Projection
- UK JUL AWE PRIVATE REGULAR PAY +4.66% 3MO Y/Y (VS +4.8% JUN)
- UK JUL AWE PRIVATE REGULAR PAY +4.51% SINGLE MONTH Y/Y
- UK JUL UNEMPLOYMENT RATE 4.7%
Labour market data was broadly in line with expectations. Private regular pay 4.66% vs 4.65% prior on a 3-month basis. The single month at 4.51% with only a minor 0.03ppt downward revision to the June single month print. Unemployment rate still rounds to 4.7%. There was a revision lower to the claimant count in July but the rate remains at 4.4% in line with expectations. The one takeaway which is slightly dovish for us is that the market was looking for private regular pay to come in at a lower-than-consistent level with the BOE's Q3 forecast. So it looks as though we are tracking a slightly weaker labour market than the BOE expects.
EUROZONE JUL IP +0.3% M/M, +1.8% Y/Y (VS -0.6% M/M, +0.7% Y/Y JUN) (MNI)
GERMANY ZEW SEP CURRENT CONDITIONS -76.4 (MNI)
GERMANY ZEW SEP ECONOMIC EXPECTATIONS 37.3 (MNI)
ITALY AUG FINAL HICP 1.6% (VS 1.7% FLASH, 1.7% JUL) (MNI)
FOREX: US Dollar Extending Lower, EUR & JPY Lead Gains
- Following a similar theme to Monday’s session, the USD index is down 0.2% today, extending its grind lower to reach the lowest levels since early July. The index is now within 1% of the multi-year lows as we approach tomorrow’s Fed decision, which reside at 96.38. Continued strong performance for major equity indices and the more activist approach to Fed personnel management from the White House are providing greenback headwinds.
- In slight contrast today, it’s the majors which are outperforming, led by the likes of EUR and JPY. This has prompted a EURUSD (+0.40%) print above 1.18, as the pair narrows the gap to the cycle highs and key resistance at 1.1829. Clearance of this hurdle would confirm a resumption of the primary uptrend and immediately target the Sep 10 2021 high at 1.1851.
- Unsurprisingly, action has been centred around the Japanese yen, with USDJPY trading a 146.70-147.54 range already on Tuesday. The Yen was supported overnight by agricultural minister Koizumi’s intention to run for LDP leader. Finance Minister Kato is set to run his election campaign, providing a more hawkish (with respect to both fiscal and monetary policy) option compared to opinion poll leader Takaichi. USDJPY has subsequently settled back at 147.00 and key short-term support to watch remains at 146.21, the Aug 14 low and a bear trigger.
- In line labour market data from the UK has allowed GBP to continue its ascent against the dollar this morning, following yesterday’s breach of key resistance at 1.3595. The break strengthens bullish conditions and opens 1.3681, the July 4 high.
- It’s worth highlighting that AUDNZD briefly broke to the highest level since 2022 at 1.1191, however, momentum quickly stalled with the cross reversing back to 1.1160. New Zealand GDP is due Thursday local time, shortly before Australian employment data for August.
- Today’s focus will be on US retail sales and Canada CPI data, with US import prices and industrial production also scheduled.
EGBS: Bund Futures Weaken Into 5-year German Auction Before Stabilising
Bund futures weakened into this morning’s E4.5bln 2.20% Oct-30 Bobl auction before stabilising. Futures are currently -9 ticks at 128.64, off earlier session highs of 128.90. Initial support is Friday’s low at 128.51, which shields the Sep 4 low at 128.25.
- The German auction saw slightly softer cover ratios than last month's outing, but the lowest accepted price was nonetheless in excess of the pre-auction mid price. Finland will sell bonds later this morning, while Slovakia has also already come to the market today.
- Bunds found light support from a pullback in equities and crude oil futures earlier, but moves have generally lacked conviction.
- The German curve has bear steepened, with yields +0.5 to +2.5bps higher.
- 10-year EGB spreads to Bunds are biased slightly tighter. The BTP/Bund spread is eyeing a test of the August low of ~76.7bps (currently -0.5bps at 77.5bps).
- The September German ZEW survey’s expectations component was much stronger-than-expected at 37.3 (vs 25.0 cons), but was only a little higher than August’s 34.7 reading. Meanwhile, Eurozone July industrial production was slightly softer than forecast at 0.3% M/M (vs 0.4% cons, an upwardly revised -0.6% prior).
- ECBspeak hasn’t been market moving. Maltese CB Governor Scicluna had a more hawkish tone than Kazaks earlier in the morning.
GILTS: Back From Highs After Soft Auction
Soft demand at the latest 15-Year auction sees gilts away from session highs.
- Futures back to ~91.50.
- A bullish cycle remains in play. Initial resistance at 91.82. Initial support at 90.65.
- Yields 1.5bp higher to 0.5bp lower, curve twist flattens.
- Modest hawkish adjustment in GBP STIRs, SONIA futures flat to -1.0, BoE-dated OIS pricing ~7.5bp of cuts through year-end, aided by the qauntiy side of the labour market readings.
- We don’t think this morning’s data will be gamechanger for the BoE, particularly with wage data slightly softer than expected at this early stage in the Q3 cycle (see our earlier run of post-data bullets for more colour).
- A reminder that we have CPI data tomorrow ahead of the BoE decision on Thursday (full CPI preview Hidden PDF).
- Focus following Thursday’s BoE decision is likely to fall on the QT announcement for 25/26, with consensus looking for no change in Bank Rate.
- We argue that either active gilt sales continuing at their current pace or being suspended completely would be the optimal position for the market.
- U.S. President Trump’s state visit is set to provide headlines over the next 48 hours, with U.S. firms outlining increased investment intentions re: the UK in recent days.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Sep-25 | 3.976 | +0.9 |
Nov-25 | 3.935 | -3.2 |
Dec-25 | 3.893 | -7.4 |
Feb-26 | 3.786 | -18.1 |
Mar-26 | 3.754 | -21.4 |
Apr-26 | 3.683 | -28.4 |
EQUITIES: Move Through 20-Day EMA a Bullish Development for Eurostoxx Futures
Eurostoxx 50 futures continue to appreciate. The contract has recently traded through the 20-day EMA - a bullish development. The move higher undermines a recent bearish theme and signals potential for a climb towards 5522.0, the Aug 26 high and a bull trigger. On the downside, support has been defined at 5292.00, the Sep 2 low. Clearance of this level is required to reinstate a bearish theme. A bull cycle in S&P E-Minis remains intact and the contract has started this week on a bullish note. Fresh cycle highs reinforce current bullish conditions. The move higher confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows. Sights are on the 6700.00 handle next and 6712.33, a Fibonacci projection. On the downside, initial support to watch is 6559.62, the 20-day EMA.
- Japan's NIKKEI closed higher by 134.15 pts or +0.3% at 44902.27 and the TOPIX ended 7.87 pts higher or +0.25% at 3168.36.
- Elsewhere, in China the SHANGHAI closed higher by 1.361 pts or +0.04% at 3861.865 and the HANG SENG ended 8.05 pts lower or -0.03% at 26438.51.
- Across Europe, Germany's DAX trades lower by 50.24 pts or -0.21% at 23698.59, FTSE 100 lower by 5.88 pts or -0.06% at 9271.11, CAC 40 up 1.41 pts or +0.02% at 7898.34 and Euro Stoxx 50 up 1.24 pts or +0.02% at 5441.64.
- Dow Jones mini up 28 pts or +0.06% at 45949, S&P 500 mini up 16.75 pts or +0.25% at 6638.25, NASDAQ mini up 89.25 pts or +0.37% at 24398.
Time: 10:00 BST
COMMODITIES: Gold Hits Fresh Record High Again, Nears $3700.00 Handle
The trend condition in WTI futures is unchanged - a bear cycle remains intact and short-term gains are 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 has started the week on a firmer note - yesterday the metal traded to a fresh all-time high, once again. The break higher confirms a resumption of the primary uptrend and an extension of the sequence of higher highs and higher lows. The next objective is the $3700.00 handle and $3705.2, a Fibonacci projection. Initial firm support lies at $3532.8, the 20-day EMA.
- WTI Crude down $0.33 or -0.52% at $62.95
- Natural Gas up $0.01 or +0.2% at $3.049
- Gold spot up $15.39 or +0.42% at $3694.46
- Copper down $1.75 or -0.37% at $470.05
- Silver up $0.01 or +0.02% at $42.6995
- Platinum down $1.3 or -0.09% at $1405.19
Time: 10:00 BST
| Date | GMT/Local | Impact | Country | Event |
| 16/09/2025 | 1215/0815 | ** |  CA | CMHC Housing Starts |
| 16/09/2025 | 1230/0830 | *** | CA | CPI |
| 16/09/2025 | 1230/0830 | *** |  US | Retail Sales |
| 16/09/2025 | 1230/0830 | ** | US | Import/Export Price Index |
| 16/09/2025 | 1230/0830 | *** | US | Retail Sales |
| 16/09/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 16/09/2025 | 1315/0915 | *** | US | Industrial Production |
| 16/09/2025 | 1400/1000 | * | US | Business Inventories |
| 16/09/2025 | 1400/1000 | ** | US | NAHB Home Builder Index |
| 16/09/2025 | 1400/1000 | * | US | Business Inventories |
| 16/09/2025 | 1700/1300 | ** | US | US Treasury Auction Result for 20 Year Bond |
| 16/09/2025 | - | CA | Bank of Canada Meeting | |
| 17/09/2025 | 0600/0800 | ** |  SE | Unemployment |
| 17/09/2025 | 0600/0700 | *** |  GB | Consumer inflation report |
| 17/09/2025 | 0730/0930 |  EU | ECB Lagarde at ECB Annual Research Conference | |
| 17/09/2025 | 0800/1000 | EU | ECB Cipollone At Associazione Bancaria Italiana EC Meeting | |
| 17/09/2025 | 0900/1100 | *** | EU | EZ HICP Final |
| 17/09/2025 | 1100/0700 | ** | US | MBA Weekly Applications Index |
| 17/09/2025 | 1115/1315 | EU | ECB Cipollone Speaks at Netherlands Central Bank Resilience Conference | |
| 17/09/2025 | 1230/0830 | * | CA | International Canadian Transaction in Securities |
| 17/09/2025 | 1230/0830 | *** | US | Housing Starts |
| 17/09/2025 | 1230/0830 | *** | US | Housing Starts |
| 17/09/2025 | 1345/0945 | *** | CA | Bank of Canada Policy Decision |
| 17/09/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 17/09/2025 | 1430/1030 | CA | BOC press conference | |
| 17/09/2025 | 1430/1030 | ** | US | US DOE Petroleum Supply |
| 17/09/2025 | 1800/1400 | *** | US | FOMC Statement |
| 18/09/2025 | 2245/1045 | *** |  NZ | GDP |
