The Federal Reserve is expected to cut its funds rate after having observed a pause since December 2024.

On rates markets, August and the first week of September were marked by a noticeable de-correlation on both sides of the Atlantic. While Euro rates moved sideways, Treasury yields declined significantly, especially at the short end of the curve. This shift and steepening of the curve reflects a weakening labour market, accelerating Fed rate cut expectations.

Activity paused leading up to the Jackson Hole Economic Symposium, where a potential pivot in Federal Reserve policy was revealed by Chairman Jerome Powell, hinting at a possible easing cycle.

The global economy approaches the final stretch of 2025 at an inflection point. Financial markets, unsettled for much of the year by tariff escalations and a slowing US economy, now find comfort in an accommodative monetary policy path, less uncertainty in trade negotiations and a potential major political shift in the making at the Federal Reserve.

European equities were slightly higher in August but continue to underperform US equities. European macro data were mixed, with PMIs improving in manufacturing but weakening in services.

Von Januar bis Ende Mai eroberten die europäischen Aktien die Führung zurück. In lokaler Währung schlug der MSCI EMU den MSCI World um etwa sechs bis sieben Prozentpunkte , und die Qualität dieses Anstiegs war eindeutig wertorientiert: Banken und Versicherer führten die Liste an, während Telekommunikationsdienste, Versorger und Industriewerte für eine konstante Breite sorgten.

The ECB interest rate decision will be closely watched for how the bank balances inflation nearly at target with sluggish growth in the region.

Markets will be laser-focused on the US job report, representing one of the last major data releases ahead of the September FOMC.