Monthly Coffee Break

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.

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.