As we step into the first trading day of September, markets are kicking off the month with a mix of caution and anticipation. With summer behind us, investors are shifting their focus to key economic data releases and potential market-moving events that could set the tone for the weeks ahead.
KEY INDICATORS
Labour Day observance
US financial markets were closed today in observance of Labour Day, resulting in a quiet day for trading.
However, global markets remained active, with investors around the world reacting to recent economic developments and positioning themselves for the return of US markets tomorrow.
Global markets react to economic data
Even with the US markets closed, global markets provided some direction. In Europe, stocks edged higher on the back of stronger-than-expected manufacturing data, which suggested that the region’s economic slowdown might not be as severe as feared.
Meanwhile, in Asia, markets were mixed, with Chinese stocks under pressure due to ongoing concerns about the country’s economic health, highlighted by weaker-than-expected trade data.
MARKET MOVERS
EUR/CHF
GBP/USD
EUR/GBP
TODAY’S NEWS HEADLINES
ECB to deliver second rate cut in September
The European Central Bank meets again later this month, and Goldman Sachs (NYSE:GS) expects the central bank to ease monetary policy once more having started its rate-cutting cycle in June.
Forward-looking indicators and comments from some ECB officials suggest a small downgrade to near-term growth, which would take 2024 and 2025 growth down -0.1pp each to 0.8% and 1.3%, respectively.
UK manufacturing PMI hits 26-month high in August on rising domestic demand
The Manufacturing Purchasing Managers’ Index (PMI) stood at 52.5, unchanged from the preliminary estimate and up from 52.1 in July.
The PMI in the UK remained at 52.5 in August, up from 52.1 in July, marking its highest level in over two years. This indicates a period of recovery for the sector, buoyed by a significant increase in domestic orders.
This is the highest level in 26 months, primarily driven by strong domestic demand that offset weaknesses in export markets.
Stocks rose on Friday, with the Dow Jones Industrial Average posting a fresh record high as investors ended a volatile month on a high note.
The 30-stock Dow jumped 228.03 points, or 0.55%, to close at 41,563.08.
The S&P 500 advanced 1.01%, closing at 5,648.40.
The tech-heavy Nasdaq Composite gained 1.13% to end at 17,713.62.
The personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, rose 0.2% on a monthly basis in July and 2.5% from a year ago.
