US Consumer Prices Rise More Than Expected In August From Services Not Tariffs

Following yesterday's cooler-than-expected PPI (MoM deflation), expectations for this morning's Consumer Price Inflation were for the further acceleration.

Headline CPI rose 0.4% MoM (hotter than the 0.3% expected, lifting prices up 2.9% YoY - the highest since January...

Source: Bloomberg

CPI rose 0.4% in August, after rising 0.2% in July; over the last 12 months, the all items index increased 2.9% before seasonal adjustment.

• The index for shelter rose 0.4% in August and was the largest factor in the all items monthly increase. The food index increased 0.5% over the month as the food at home index rose 0.6% and the food away from home index increased 0.3 percent. The index for energy rose 0.7% in August as the index for gasoline increased 1.9% over the month.

• The index for all items less food and energy rose 0.3% in August, as it did in July. Indexes that increased over the month include airline fares, used cars and trucks, apparel, and new vehicles. The indexes for medical care, recreation, and communication were among the few major indexes that decreased in August.

• The all items index rose 2.9% YoY in August, after rising 2.7% in July. The all items less food and energy index rose 3.1 percent over the last 12 months. The energy index increased 0.2 percent for the 12 months ending August. The food index increased 3.2 percent over the last year.

Core Services were the big driver of the increase, not driven by tariff pressures...

Source: Bloomberg

Core CPI rose 0.3% MoM as expected, lifting prices more than 3% YoY for the first time since February...

Source: Bloomberg

Core Services also dominated the rise in core CPI...

Source: Bloomberg

More details on the core CPI print which rose 0.3% in August, same as July:

• The shelter index increased 0.4% over the month, and was the largest factor in the all items monthly increase

  • The index for owners’ equivalent rent rose 0.4 percent in August and the index for rent increased 0.3 percent.

    • August rent inflation up 0.34% MoM, highest since Dec 24; but up 3.49% YoY, lowest since Dec 2021

    • August shelter inflation up 0.39% MoM, highest since Jan 25; but up 3.63% YoY, lowest since Oct 2021

• The lodging away from home index rose 2.3 percent over the month.

• The index for airline fares increased 5.9 percent over the month, after rising 4.0 percent in July.

• The used cars and trucks index rose 1.0 percent in August and the apparel index rose 0.5 percent.

• The index for new vehicles rose 0.3 percent over the month and the index for household furnishings and operations increased 0.2 percent.

• The recreation index and the communication index both declined 0.1 percent in August.

• The medical care index decreased 0.2 percent over the month, following a 0.7-percent increase in July.

• The index for dental services decreased 0.7 percent in August and the index for prescription drugs declined 0.2 percent.

• The physicians’ services index increased 0.3 percent over the month, while the hospital services index was unchanged.

It looks like auto costs are starting to tick up again. New vehicles rose by 0.3% while used cars and trucks rose by 1.0%. But the real sting was in motor vehicle maintenance and repairs, which jumped by 2.4%. 

When we look at some import-exposed categories:

• Household furnishings are up 0.1% on the month, the least since March, and appliances within that category are up 0.4%, the most since June. A sort of mixed reading there.

• Apparel (clothing) is up 0.5%, the largest gain since February, so, an acceleration there.

• Video and audio products are up 0.5%, which is the smallest rise since May.

At least looking at these categories, there’s no overall broad story of acceleration in inflation pressures. 

Interesting, SuperCore CPI slowed in August to 3.52% YoY...

Source: Bloomberg

Transportation Services were the biggest driver of the rise in SuperCore CPI...

Source: Bloomberg

Comparing CPI to PPI shows that there is no margin pressure on firms and could suggest price pressures being passed through to end users...

Source: Bloomberg

Together with August PPI, the CPI report suggests that the Fed’s preferred inflation gauge, the core PCE deflator (due out Sept. 26) will edge up to 3.0% for August year over year...

All of this is to say, while the overall inflation numbers are in line with what economists had expected, within the details there are pockets of price pressure. 

We highlighted auto repairs and airline tickets earlier, but take a look at fruit and vegetable costs: up 1.6% on the month. Motor fuel rose by 1.8%, while tobacco costs rose 1.0%, and food-at-home jumped 0.6% on the month, the biggest gain in almost three years. 

To be clear, the overall number won’t hold the Fed from cutting, but it’s clear there’s inflation pressure in some corners of the economy. 

...not enough to scare The Fed from its rate-cutting path.

Tyler Durden Thu, 09/11/2025 - 08:42

ECB Keeps Rates Unchanged As Expected, Euro Drops After 2027 Inflation Forecast Trimmed

As expected, the ECB left its deposit rate unchanged at 2% and maintained the data-dependent and meeting-by-meeting language in the statement. It highlighted that inflation is currently at around 2% and fresh projections show it close to that level also in 2027, although while it raised inflation forecasts for 2025 and 2026, it trimmed them for 2027. The growth outlook was also similar to the one from June.

Here are the highlights from the ECB statement (link here):

• Will follow a data-dependent and meeting-by-meeting approach to determining appropriate monetary policy stance
• Reiterates that rate decisions will be based on its assessment of inflation outlook and risks surrounding it, in light of incoming economic and financial data, as well as dynamics of underlying inflation and strength of monetary policy transmission
• Not pre-committing to a particular rate path

INFLATION:

• Inflation is currently at around 2% medium-term target and ECB s assessment of inflation outlook is broadly unchanged
• New staff projections present a picture of inflation similar to that projected in June

ECONOMIC PROJECTIONS:

HICP INFLATION:

• 2025: 2.1% (exp. 2.1%, prev. 2.0%)
• 2026: 1.7% (exp. 1.9%, prev. 1.6%)
• 2027: 1.9% (exp. 2.0%, prev. 2.0%)

HICP CORE INFLATION (EX-ENERGY & FOOD):

• 2025: 2.4% (prev. 2.4%)
• 2026: 1.9% (prev. 1.9%)
• 2027:1.8% (prev. 1.9%)

GDP:

• 2025: 1.2% (exp. 1.1% prev. 0.9%)
• 2026: 1.0% (exp. 1.1 %, prev. 1.1 %)
• 2027: 1.3% (exp. 1.5%, prev. 1.3%)

Market Reaction

In response to the ECB hold, the euro extended an earlier fall, while European government bonds pared losses, after the European Central Bank kept interest rates steady as widely expected but cut its inflation forecast for 2027.

• EUR/USD drops 0.3% to 1.1664, before stabilizing around 1.1670
• German bonds pared losses, with yields on two-year bonds trading one basis point higher at 1.96%
• Traders price a 60% chance of another quarter-point cut by the middle of next year, after paring bets to close to 50% ahead of the meeting

 

Tyler Durden Thu, 09/11/2025 - 08:29

ECB Keeps Rates Unchanged As Expected, Euro Drops After 2027 Inflation Forecast Trimmed

As expected, the ECB left its deposit rate unchanged at 2% and maintained the data-dependent and meeting-by-meeting language in the statement. It highlighted that inflation is currently at around 2% and fresh projections show it close to that level also in 2027, although while it raised inflation forecasts for 2025 and 2026, it trimmed them for 2027. The growth outlook was also similar to the one from June.

Here are the highlights from the ECB statement (link here):

• Will follow a data-dependent and meeting-by-meeting approach to determining appropriate monetary policy stance
• Reiterates that rate decisions will be based on its assessment of inflation outlook and risks surrounding it, in light of incoming economic and financial data, as well as dynamics of underlying inflation and strength of monetary policy transmission
• Not pre-committing to a particular rate path

INFLATION:

• Inflation is currently at around 2% medium-term target and ECB s assessment of inflation outlook is broadly unchanged
• New staff projections present a picture of inflation similar to that projected in June

ECONOMIC PROJECTIONS:

HICP INFLATION:

• 2025: 2.1% (exp. 2.1%, prev. 2.0%)
• 2026: 1.7% (exp. 1.9%, prev. 1.6%)
• 2027: 1.9% (exp. 2.0%, prev. 2.0%)

HICP CORE INFLATION (EX-ENERGY & FOOD):

• 2025: 2.4% (prev. 2.4%)
• 2026: 1.9% (prev. 1.9%)
• 2027:1.8% (prev. 1.9%)

GDP:

• 2025: 1.2% (exp. 1.1% prev. 0.9%)
• 2026: 1.0% (exp. 1.1 %, prev. 1.1 %)
• 2027: 1.3% (exp. 1.5%, prev. 1.3%)

Market Reaction

In response to the ECB hold, the euro extended an earlier fall, while European government bonds pared losses, after the European Central Bank kept interest rates steady as widely expected but cut its inflation forecast for 2027.

• EUR/USD drops 0.3% to 1.1664, before stabilizing around 1.1670
• German bonds pared losses, with yields on two-year bonds trading one basis point higher at 1.96%
• Traders price a 60% chance of another quarter-point cut by the middle of next year, after paring bets to close to 50% ahead of the meeting

 

Tyler Durden Thu, 09/11/2025 - 08:29

Futures Rise To New All Time High Ahead Of CPI Report

US equity futures have a slight bid into today's CPI print - the last key macro datapoint ahead of next week's rate decision - rising to another daily record high, let by Tech. As of 8:10am, S&P futures rise 0.2% after back-to-back all-time highs while Nasdaq 100 futures rise 0.3% with AAPL and AMZN leading the Mag7 higher and ORCL +1.4% after its +36% move yesterday. In a familiar pattern this week, Cyclicals are outperforming Defensives pre-mkt. European stocks also drifted higher while Chinese stocks capped their biggest advance since March, led by companies seen as major beneficiaries of the nation’s push for homegrown technology. Treasuries held steady, with the 10-year yield at 4.05%; the USD is up small as the yen slumps after prominent LDP dove and conservative Sanae Takaichi said she is running for PM; commodities are seeing some profit-taking with both Energy and Metals lower. CPI and Jobless Claims are the focus for today as investors solidify views into next week’s Fed as well as Oct / Dec meetings. 

 

In premarket trading, Mag 7 stocks are all higher (Tesla +1%, Amazon +0.6%, Nvidia +0.5%, Microsoft +0.4%, Meta Platforms +0.3%, Apple +0.2%, Alphabet +0.1%).

• Avidity Biosciences (RNA) plunges 19% after offering $500 million in shares, planning to use some of the proceeds to advance clinical programs.
• Ecovyst Inc. (ECVT) climbs 8% after Technip Energies NV agreed to buy the company’s advanced materials & catalysts business.
• Opendoor Technologies Inc. (OPEN) shares soar 36% after the company said co-founders Keith Rabois and Eric Wu will rejoin the board and named Shopify’s Kaz Nejatian as chief executive officer.
• Oxford Industries (OXM) jumps 18% after the Tommy Bahama owner posted second-quarter profit that beat expectations.
• Red Cat Holdings (RCAT) rises 9% after the drone company said its Black Widow System has been approved and added to the NATO Support and Procurement Agency catalog.
• Revolution Medicines (RVMD) gains 9% after the company reported updates from Phase 1 trials of daraxonrasib in pancreatic cancer.

In corporate news, Citigroup’s CEO sees a pickup in dealmaking as US companies gain confidence from clearer policy signals. Real estate giant Brookfield has declared the debate over remote work is over. Tricolor, a used car seller and subprime lender that focuses on undocumented immigrants in the US Southwest, filed to liquidate in bankruptcy.

Expectations that the Fed will resume monetary easing this month have soared in recent weeks, as data increasingly point to a US labor market under strain. Wednesday’s surprise decline in producer inflation further bolstered the view that tariffs are not placing excessive pressure on prices. Core CPI, a measure of underlying inflation excluding food and fuel, likely rose 0.3% for a second month, according to the median estimate in a Bloomberg survey (our preview is here). Money markets are currently betting on as many as three quarter-point cuts by December, with some wagers pointing to a jumbo 50-basis-point reduction when the Fed meets next week.

A softer-than-expected print could fuel bets on an initial outsized cut, while a stronger reading would bolster the case for more gradual moves.

“Even if we do have a bit of a bump in CPI, there is a theory that it can be short-term, driven by tariffs,” said Nataliia Lipikhina, head of EMEA equity strategy at JPMorgan Private Bank. “As long as it is not such a big increase, I don’t think you’ll see a very big negative reaction on the market.”

Bloomberg economist Anna Wong expects a hot CPI number driven by discretionary services like airfares and hotels. “Ironically, those gains are the indirect result of easing financial conditions spurred by the reduction of tariffs,” she wrote. Wall Street desks, as we wrote yesterday, expect a muted reaction from stocks. Market drift on Wednesday afternoon and a barbell performance within indexes coincides with some investors bidding up put options to protect this year’s gains. At the same time, a key momentum indicator is flashing warning signs, with the 14-day RSI showing negative divergence with the index. That means while the broader market is grinding higher, its underlying strength is fading.

Equity investors are weighing diverging narratives: easier financial conditions are sustaining the rally, especially with Fed easing on the horizon, yet Wednesday’s PPI data also showed tightening trade margins as inflation is not being passed through to consumers  — casting doubt on optimistic earnings forecasts. A weak US CPI print later today could prompt the market to “romance” the idea of a 50-bps rate cut week, but a series of quarter-point reductions is more likely, according to JPMorgan AM. Elsewhere in strategy, JPMorgan said US share buybacks could jump by $600 billion over the coming years as repurchases increase from the $1.5 trillion record expected in 2025.

The prevailing bullish sentiment carries the risk of a volatility comeback. Strategists warn that after one of the strongest rallies in decades, a measure of caution is warranted, especially with stretched positioning, the aggressive pricing in of rate cuts and the seasonally weak September-October period.

“The market has been steadily pricing in a Goldilocks scenario where soft data was perceived positively — ‘bad is good’ — as long as it improved the odds of rate cuts,” said JPMorgan strategists led by Dubravko Lakos-Bujas. After a weak payroll print, “the ‘bad has become less good.’ If inflation comes in hotter this week, we see the current Goldilocks market positioning at risk of correcting."

In Europe, the Stoxx 600 rose 0.3%, with travel and construction shares leading gains, while automobile and mining stocks are the biggest laggards. re are the biggest movers Thursday:

• Buzzi rises as much as 7.2% after JPMorgan upgrades to overweight, with the bank saying it prefers heavyside exposure within European building materials
• Technip Energies shares rise as much as 5.8% to their highest value on record after the engineering and technology company announced the acquisition of Ecovyst’s Advanced Materials & Catalysts business
• Tate & Lyle shares rise as much as 3.8%, the most since July, as BNP Paribas Exane analysts suggest the ingredients group could be a takeover target
• Covestro rises 8.1% in Frankfurt trading after Reuters reported ADNOC is said to be readying remedies to address an EU subsidy investigation into its bid for the German chemical maker that will likely see it convert a proposed €1.2 billion ($1.4 billion) capital hike to a shareholder loan
• Energean shares gain as much as 2.2%, reversing earlier losses. The oil and gas company delivered what analysts saw as a relatively robust set of results following a mandated and temporary shut-in of its operations in Israel during the period
• Playtech surges as much as 12%, the most in a year, following the gambling technology provider’s first-half results, which analysts say demonstrate a solid performance
• THG PLC shares rise as much as 8.8%, most since June, after the online retailer reported a strong outlook for the second half of the year. Peel Hunt analysts flag the nutrition division’s growing momentum
• Novo Nordisk shares drop as much as 2.4%, paring some of Wednesday’s advance following the Danish drugmaker’s plans to cut jobs
• Rusta falls as much as 12%, the most since its October 2023 IPO, after the Swedish discount retail group reported its latest earnings
• Avio shares declined as much as 10% in Milan trading, the most since December 2022, after Bloomberg reported that the Italian rocket maker may consider a capital increase to strengthen its satellite-launch business

Earlier in the session, Asian equities struggled for direction after a five-day rally, as gains in mainland China countered declines in Hong Kong.  The MSCI Asia Pacific Index traded in a narrow range. Hong Kong megacaps including Meituan and Tencent weighed on the regional gauge. Taiwan’s heavyweight component TSMC climbed to a new high as the chipmaker’s sales report added further optimism on the AI trade. China’s CSI 300 Index jumped 2.3%, driven by shares of companies that are seen as major beneficiaries of the nation’s push for homegrown technology. US investor interest in Chinese equities has jumped to the highest since the Covid pandemic due to the Asian nation’s tech innovation, steps to stabilize the economy and improving liquidity, according to Morgan Stanley. The onshore market rally was “mostly driven by the AI craze,” said Steven Luk, chief executive officer at FountainCap Research & Investment in Hong Kong. Oracle’s deal with OpenAI also “boosted demand outlook for upstream and downstream AI related names in China,” he said. 

“Asia stocks are drifting with little conviction as investors await the next big cue — US CPI due tonight,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “Markets feel like they’re treading water, holding gains, but reluctant to chase ahead of an inflation print that could lay the final stone for next week’s Fed cut.”

In Fx, the yen slipped after reports that hard-line conservative Sanae Takaichi will run for of Japan’s ruling LDP. Treasuries were little changed and bund yields ticked higher at the short end before the ECB.

In rates, treasury yields are within a basis point of Wednesday’s closing levels ahead of Thursday’s August CPI report, weekly jobless claims data and 30-year bond reopening. Bunds underperform slightly before ECB rate decision at 8:15am New York time. In Asia, the yen slipped after reports that hard-line conservative Sanae Takaichi will run for of Japan’s ruling LDP. US 10-year is little changed near 4.05% with German counterpart about 1bp cheaper on the day. Curve spreads hold most of Wednesday’s sharp flattening move on the back of strong demand for 10-year note auction. Auction drew lower-than-anticipated yields and produced record-low allotments to primary dealers, signs of strong demand from end users. 

In commodities, brent traded above $67 even as the IEA said the record oil surplus for next year is looking even bigger. Gold retreated from a record, down $25 to about $3,616 an ounce. 

Turning to the day ahead now, US economic data slate includes August CPI and weekly jobless claims (8:30am), 2Q household change in net worth (12pm) and August Federal budget balance (2pm). Elsewhere, the ECB will be making their latest policy decision.

Market Snapshot

• S&P 500 mini +0.1%
• Nasdaq 100 mini +0.2%
• Russell 2000 mini little changed
• Stoxx Europe 600 +0.2%
• DAX little changed, CAC 40 +0.7%
• 10-year Treasury yield +1 basis point at 4.05%
• VIX -0.2 points at 15.19
• Bloomberg Dollar Index +0.2% at 1202.92
• euro little changed at $1.1687
• WTI crude -0.4% at $63.42/barrel

Top Overnight News

• Manhunt underway after conservative activist Charlie Kirk shot dead on Utah campus: RTRS
• Reports that U.S. President Donald Trump asked the European Union to slap tariffs of up to 100% on China and India for their Russian oil purchases has raised eyebrows on both sides of the Atlantic, with Europe seen as unlikely to acquiesce to the White House’s request. CNBC
• US President Trump's administration appealed the court ruling blocking the removal of Fed Governor Cook.
• G7 sovereign debt levels becoming a growing concern for investors as yields creep higher on back of extreme fiscal imbalances, political instability, and elevated inflation, with a particular focus on France, the UK, the US, and Japan. RTRS
• Stephen Miran, Trump’s temporary Federsal Reserve pick, could be confirmed to the Fed as soon as Monday, allowing him to participate in next week’s FOMC meeting. Politico
• China is preparing to tackle a backlog of unpaid local government bills to the private sector, people familiar said, with some estimates putting the arrears at more than $1 trillion. BBG
• Hong Kong regulators have begun allowing companies to avoid stringent rules on bond issuances and share buybacks, following the success of a $5bn transaction launched by Alibaba last year. FT
•  The Bank of Japan is firming up a strategy to unload its huge holdings of risky assets that will likely center on a plan to gradually sell exchange-traded funds (ETF) in the market. RTRS
• The US immigration raid that detained hundreds of South Korean workers may have a “significant impact” on future investments, President Lee Jae Myung warned. The 330 people are scheduled to return home today on a charter flight. BBG
• The IEA expects an oil glut next year, forecasting supply will exceed demand by 3.33 million barrels a day. The US and Brazil will lead non-OPEC+ growth at twice the pace of demand. OPEC’s monthly report is due next. BBG
• Goldman expects a 0.36% increase in August core CPI (vs. +0.3% consensus), corresponding to a year-over-year rate of 3.13% (vs. +3.1% consensus). It expects a 0.37% increase in headline CPI (vs. +0.3% consensus), reflecting higher food (+0.35%) and energy (+0.6%) prices: GIR

Trade/Tariffs

• South Korean President Lee said there will be more ways to negotiate with the US, and a final conclusion on trade negotiations with the US is expected to be rational, while he added they are in discussions with the US to operate visa systems normally and that Korean businesses will now be hesitant about investing in the US following the immigration raid. Lee also noted that various factors are involved in trade negotiations with the US, including nuclear material reprocessing and defence costs. Furthermore, South Korea's Industry Minister is to travel to the US today for follow-up trade negotiations.
• US President Trump reportedly halted the deportation of Korean workers to encourage them to train Americans, and Seoul officials said Trump gave those at the Hyundai Motor (005380 KS)-LG Energy Solution (373220 KS) battery plant an option to stay, according to FT.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks followed suit to the mixed performance stateside, where the S&P 500 and Nasdaq printed fresh record highs after cooler-than-expected PPI data, but with some cautiousness seen as participants braced for the incoming US CPI report. ASX 200 was subdued in the absence of any notable data or drivers, and with the downside led by healthcare,  consumer discretionary and financials. Nikkei 225 returned to above the 44,000 level and extended on record highs despite mixed data. Hang Seng and Shanghai Comp were mixed with the Hong Kong benchmark dragged lower by pharmaceutical stocks after reports that the US is considering severe restrictions on medicines from China, while the mainland was underpinned after recent policy pledges by China's state planner.

Top Asian News

• BoJ is firming up a strategy to unload its huge ETF holdings and is centring on gradual market sales, according to sources cited by Reuters, who added there is no consensus yet on the timing, with political uncertainty complicating the decision.
• South Korean President Lee held a conference on his first 100 days in office, where he stated the domestic economic indicators are showing signs of recovery and the stock market is recovering at a fast pace, while he added that measures on stabilising property prices will continue to be rolled out. Lee said unreasonably undervalued stocks are prevalent in the South Korean market and tax policies can be modified to revitalise stock markets, but noted that capital gains tax rules will not change, and he will leave it to Parliament to decide on capital gains tax rules. Furthermore, he said it is time for expansionary fiscal policy to achieve economic growth, even if it raises national debt.
• China is said to be mulling aiding local governments with USD 1tln of bills, according to Bloomberg sources. Chinese government reportedly considers directing state lenders and policy banks to provide loans to local authorities for overdue payments.
• Japan LDP senior member Takaichi confirmed that they will be running for LDP leadership, via Newsjp.

European bourses (STOXX 600 +0.4%) are modestly firmer across the board, with some outperformance in the CAC 40 (+0.7%). European sectors hold a strong positive bias, albeit with the breadth of the market fairly narrow. There are only a handful of industries holding marginally in the red. Retail is once again leading the pile, continuing the strength seen in the prior session. Energy follows closely behind, and Construction & Materials completes the top three.

Top European News

• UK Chancellor commits to exploring pro-growth tax reforms to support small businesses expanding operations.
• Germany's BGA Trade Association says German exports are expected to fall 2.5% in 2025 and imports to rise 4.5%.

FX

• DXY is fractionally higher following an indecisive session on Wednesday in the wake of soft PPI metrics and in the run-up to today's CPI report. Expectations are for core M/M CPI to remain at 0.3% with the Y/Y rate seen holding steady at 3.1%. As such, the desk notes that the report "reinforces confidence that the upcoming CPI print is unlikely to exceed 0.3% M/M". Elsewhere on the data slate are the weekly jobs figures with initial claims expected to slip to 235k from 23k. DXY has ventured as high as 97.96 with attention on a test of 98.00; not breached since 5th September.
• EUR is steady vs. the USD ahead of the latest ECB policy decision, which is widely expected to see policymakers stand pat on the Deposit Rate at 2%. These expectations come off the back of the EU-US trade agreement, resilient growth in the face of trade tensions and a modest uptick in inflation. Ahead focus will be on clarity on the split of the Governing Council and any potential guidance on the monetary policy path. EUR/USD has slipped back onto a 1.16 handle but is holding above Wednesday's low at 1.1683.
• JPY sits at the bottom of the G10 leaderboard and has extended its mild losses vs. the USD seen on Wednesday. From a macro perspective, today's session has been lacking in Japanese-specific updates, but traders remain mindful of political risk and its potential impact on the BoJ. USD/JPY has ventured as high as 147.96 with focus on a test of 148 to the upside.
• GBP is a touch softer vs. the USD as incremental macro drivers for the UK remain on the light side. Concerns over longer-term UK borrowing costs have temporarily abated with the 30yr yield having pulled back to circa 5.48% from its recent multi-decade high at 5.752% printed on 3rd September. GBP/USD is currently holding above the 1.35 mark after basing out at 1.3502.
• Antipodeans are both marginally softer vs. the USD with not much in the way of incremental newsflow for the pair.
• PBoC set USD/CNY mid-point at 7.1034 vs exp. 7.1157 (Prev. 7.1062)

Fixed Income

• USTs are softer, as was the case at this point on Wednesday. Once again, the action is relatively modest in nature as the complex awaits CPI and thereafter 30yr supply. Into the above, USTs at the low end of a 113-12 to 113-15+ band. Entirely within Wednesday’s 113-05 to 113-20 parameters; as a reminder, PPI drove USTs higher, but the mentioned peak printed a few hours later after the strong 10yr auction.
• Bunds began the morning firmer by 14 ticks at best, notching a 129.28 peak and matching Tuesday’s high but stopping shy of 129.33 and 129.44 from Monday and Wednesday respectively. However, initial impetus faded into the European cash equity open. A move that occurred alongside a broader modest pullback in the fixed income space and as the USD strengthened. No fresh fundamental catalysts emerged at the time. All focus now turns to the ECB. The Deposit Rate is expected to be maintained at 2.00%. Focus for the meeting will be on any insight into the divide between the doves/hawks, a point that could become starker depending on how the 2026 inflation forecast develops, with desks of the view that it will tick higher from 1.6% but remain beneath the 2% target.
• Gilts saw a softer start to the day, opened lower by just under 10 ticks and then slipped further to notch a 91.22 low. Action that followed the modest bearish bias that was in play for peers at that point. Since, Gilts have managed to lift off this low and move into the green, higher by near 15 ticks at best but stalling 11 ticks shy of Wednesday’s 91.58 peak. Upside that comes as Gilts are perhaps able to trade a little more freely than peers, as the UK docket is a very light one.
• UK DMO sells GBP 1bln 4.25% 2032 Gilt; b/c 3.72, average yield 4.206%.
• Italy sells EUR 3.25bln vs exp. EUR 2.75-3.25bln 2.35% 2029 & EUR 1.5bln vs exp. EUR 1.25-1.5bln 4.00% 2030 BTP.

Commodities

• Crude was subdued in early European hours following an uneventful APAC session and after their recent advances, which were facilitated by geopolitical developments in the Middle East and Eastern Europe, with an uplift seen after comments from US President Trump, who posted "What’s with Russia violating Poland’s airspace with drones? Here we go!". The modest downside comes amid a cautious mood ahead of US CPI and ECB, whilst this morning the IEA raises its 2025 world oil demand growth forecast to 740k BPD (prev. 680k BPD), and maintains its 2026 forecast at 700k BPD. Some modest upside seen on commentary via Poland, Ukraine and Lithuania who said the Russian drone incursion is an unprecedented provocation. WTI currently resides in a narrow 63.34-63.80/bbl range while Brent sits in a USD 67.21-67.62/bbl range.
• Mixed trade across precious metals, with gold and silver taking a breather following recent advances ahead of US CPI. Spot gold currently resides in a USD 3,614.32-3,649.35/oz range and within Wednesday's USD 3,620.13-3,657.61/oz range. All-time high still sits at USD 3,674.69/oz printed on 9th September.
• Copper futures gradually pulled back from Wednesday's peak and eventually the USD 10k/t mark, with price action contained alongside the cautious risk sentiment heading into US CPI and the ECB, with the latter expected to hold rates at 2% for a second meeting. Attention will centre on guidance regarding further easing and the split of views on the Governing Council.
• IEA OMR: IEA raises 2025 world oil demand growth forecast to 740k BPD (prev. 680k BPD); 2026 growth forecast maintained at 700k BPD.
• Saudi Aramco has reportedly asked buyers to lift more October oil after recent deeper-than-expected price cuts, according to Reuters sources.

Geopolitics: Middle East

• Qatar said it condemns Israeli PM Netanyahu's explicit threats of future violations to state sovereignty, and it will work with its partners to ensure Netanyahu is held accountable.
• US President Trump reportedly had a heated call with Israeli Prime Minister Benjamin Netanyahu on Tuesday regarding the Israeli strike in Qatar, according to senior US administration officials cited by WSJ.
• US Pentagon approved an estimated USD 14.2mln presidential drawdown authority package for Lebanon, which will build the capacity of Lebanese armed forces to dismantle weapons caches and military infrastructure of non-state groups, including Hezbollah.
• Doha is to host emergency Arab-Islamic summit on Sunday and Monday amid discussions over Israeli attacks on Gaza, according to the Qatar News Agency.

Geopolitics: Ukraine

• French President Macron said he discussed with US President Trump the troubling developments in Russia's war of aggression against Ukraine.
• The UN Security Council was asked by five members to meet on Friday over Russia's violations of Polish airspace.
• EU said sanctions against Russia are to be increased significantly, and the EU foreign policy chief commented that the serious violation of European airspace strengthens their resolve to support Ukraine.
• Foreign ministers of Poland, Ukraine and Lithuania warn of deliberate Russian drone incursion, call it unprecedented provocation. Ministers urge partners to bolster Ukraine's air defence and extend support to Lithuania and Poland amid escalating tensions

Geopolitics: Other

• South Korean President Lee said North Korea's reaction has been cold but stated that no matter how North Korea reacts, easing tensions will benefit South Korea, while he added North Korea's nuclear and missile programs are a complex issue directly involving the US. Furthermore, he said South Korea doesn't necessarily have to lead in improving relations with North Korea and that US President Trump can have the most powerful influence on North Korea issues, as well as noted that they will keep trying to restore trust with North Korea.
• North Korea's leader Kim is believed to be expanding ties with China following his visit to China, and there is a higher chance that China will support North Korea via unofficial trade, according to South Korean lawmakers citing South Korea's spy agency.
• The Philippines Foreign Ministry strongly protested the recent approval by China's State Council of the establishment of the Kuanyan Island National Nature Reserve, and urged China to respect the sovereignty and jurisdiction of the Philippines over Scarborough Shoal, while the Philippines also urged China to refrain from enforcing and immediately withdraw its State Council issuance.

US Event Calendar

• 8:30 am: Aug CPI MoM, est. 0.3%, prior 0.2%
• 8:30 am: Aug CPI Ex Food and Energy MoM, est. 0.3%, prior 0.3%
• 8:30 am: Aug CPI YoY, est. 2.9%, prior 2.7%
• 8:30 am: Aug CPI Ex Food and Energy YoY, est. 3.1%, prior 3.1%
• 8:30 am: Aug CPI Index NSA, est. 323.94, prior 323.05
• 8:30 am: Aug CPI Core Index SA, est. 329.62, prior 328.66
• 8:30 am: Sep 6 Initial Jobless Claims, est. 235k, prior 237k
• 8:30 am: Aug 30 Continuing Claims, est. 1950k, prior 1940k
• 2:00 pm: Aug Federal Budget Balance, est. -340b, prior -380.08b

DB's Jim Reid concludes the overnight wrap

Thirty years ago this morning, I stepped into the City for the first time as a fresh-faced graduate trainee, wearing a cheap, ill-fitting suit and brimming with misplaced confidence. I’d been hired with great fanfare by the graduate recruitment team, told I was going to be invaluable to the bank, and walked through the doors convinced I’d be running a major trading book within months.

Fast forward two years, and I was still photocopying and delivering the daily price sheet to 80–100 salespeople and traders, while also fetching their breakfasts and coffees. My spreadsheet skills were honed not through yield curve analysis, but by counting and allocating bacon sandwiches. Every time I raised concerns about my underutilised talents, I was met with a colourful barrage of profanities and told in no uncertain terms that I was lucky to be there—and to shut up and get on with it.

Safe to say, if I tried that management style on juniors today, HR might have a few thoughts.
So I thought I would be the oracle, but I was actually the breakfast strategist. Bagels.. not bonds. 30 years on and it’s a different oracle that has moved market over the last 24 hours as the enterprise software company Oracle rose +35.95% yesterday after the aggressive outlook for its cloud business that we discussed yesterday after its release after hours on Tuesday. This helped drive the S&P 500 (+0.30%) to another record and came alongside a fresh rally for US Treasuries after a soft US PPI reading for August. Next stop CPI today.

So, a perfect alignment of macro and micro. On the macro, the US PPI showed that headline producer prices fell by -0.1% in August (vs. +0.3% expected). Moreover, the previous month’s reading for July also got revised down from +0.9% to +0.7%, so that provided a lot of reassurance that tariff-driven inflation wasn’t obviously showing up. Indeed, the latest print and the revisions pushed the year-on-year PPI reading back to +2.6% (vs. +3.3% expected), which is actually a clear reduction from the start of the year, when it peaked at +3.8% in January. To be fair, the core measures were relatively stronger, and PPI excluding food, energy and trade services was still up +0.3% on the month as expected. Indeed, taking the PPI categories that feed into core PCE – airfares, portfolio investment and medical care services – our US economists see August core PCE inflation tracking at +0.32%, in line with their pre-PPI expectations. But the market focus was very much on the downside surprise in the headline number, as that was seen as giving the Fed more space to cut rates in the months ahead.

Of course, that core PCE signal will depend a lot on today’s CPI print, which our economists expect to come in at +0.36% for headline and +0.32% for core, a touch above consensus (+0.3% for both). That would bring the YoY rate to +2.9% and +3.1% for headline and core respectively. See also the CPI preview from our inflation strategists here for more.
For the Fed, that softness in the PPI print led investors to dial up their expectations for rate cuts this year. By the close, the amount of cuts priced by December was up by +1.5bps on the day to 68bps. In turn, that put downward pressure on Treasury yields across the curve, with the 2yr yield (-1.4bps) down to 3.54%, whilst the 10yr yield (-4.1bps) fell to 4.05%. The front-end rally did reverse a bit later in the day as Brent crude rose +1.66% to $67.49/bbl as investors became wary of possible new Western restrictions targeting Russian oil in response to the incursion of Russian drones into Poland the previous night. Meanwhile, gold prices (+0.39%) continued to benefit as investors priced in more rate cuts, reaching another record high of $3,641/oz.

In the background, there were a few other Fed-related stories, as President Trump continued his criticisms, posting that “Powell is a total disaster, who doesn’t have a clue!!!”. Powell’s term as Chair still goes up until May, but there was progress on Trump’s nominee for the Fed Board of Governors, Stephen Miran, who currently is the chair of the Council of Economic Advisors. Miran’s nomination was approved by the Senate Banking Committee yesterday, who voted by 13-11 in favour on party lines. A full Senate vote is possible as soon as Monday, which could then allow Miran to take part in the FOMC meeting next week. Meanwhile, the US Justice Department yesterday launched an appeal to the federal appeals court against Tuesday’s court decision that temporarily blocked Trump from removing Fed Governor Lisa Cook.

This backdrop of decent micro and macro meant that equities put in another solid session. That pushed the S&P 500 (+0.30%) up to another record high, with the index getting a huge boost from Oracle (+35.95%), which posted its biggest daily gain since 1992. That comfortably left Oracle as the top performer in the entire S&P 500, but it was a more mixed session for other tech shares. Semiconductor stocks rallied, led by a +3.85% gain for Nvidia, but the overall Magnificent 7 (-0.53%) fell back amid sizeable declines for Apple (-3.23%) and Amazon (-3.32%). And for a second day running, a new high for the S&P came despite most of its constituents falling on the day. Meanwhile in Europe, equities were comparatively subdued, with the STOXX 600 -0.02% on the day.

Looking forward, a key highlight today will be the ECB’s latest policy decision, which is being announced at 13:15 London time. They’re widely expected to keep their deposit rate on hold at 2%, which would be the second meeting on hold in a row. In terms of what to expect, our European economists think that President Lagarde will repeat that policy is “in a good place” to navigate uncertainties. So that signals a pause, but without contradicting the data-dependent, meeting-by-meeting approach. It’s also a meeting with new forecasts, and back in June the most recent forecasts showed an undershoot of the inflation target in 2026. So if today’s projections show a deeper or longer undershoot, then they think the pressure for further cuts could build, even if their base case is that we’re already at terminal. For more info, see their full preview here.

Ahead of that meeting, European sovereign bonds were fairly stable, as they didn’t get as much support from the soft PPI print as US Treasuries did. So, yields on 10yr bunds (-0.8ps), OATs (-0.8bps) and BTPs (-1.3bps) only saw modest declines. Interestingly, we did see the French 10yr yield poke above Italy’s again in trading, but it ultimately closed -0.3bps beneath its Italian counterpart. So, we’ve only seen the crossover happen on an intraday basis so far, and you still have to go back to 1999 for the last time that the Italian 10yr yield actually closed beneath its French counterpart.

In France, new prime minister Sebastien Lecornu began his tenure vowing to work hard with opposition parties to resolve the budget challenges. And we heard a tentatively constructive tone on this from the centre-left Socialists as their leader Olivier Faure left open the door to discussions with the new government, while calling for a "budget proposal that spares the working and middle classes”.

Asian equity markets are mostly higher this morning. The Nikkei (+0.90%) is at a new record high following a near +10% surge in tech investment firm SoftBank. Furthermore, the resignation of PM Ishiba continues to foster some expectations that his successor may adopt more expansionary fiscal and monetary policies, which continues to bolster market sentiment. Conversely, the Hang Seng index (-0.37%), which recently reached its highest level in four weeks, has halted its recent rally as Chinese pharmaceutical stocks experience declines due to worries that the Trump administration might impose new restrictions on medicine exports from China. However, a big rebound in mainland stocks is offsetting this, with the CSI (+1.77%) and the Shanghai Composite (+1.12%) both trading significantly higher. Additionally, the KOSPI (+0.40%) is showing resilience, even after the country's President refrained from abandoning a proposal that would have broadened the pool of stock investors subject to capital gains tax. US equity futures are flat alongside US Treasury yields.

To the day ahead now, and the main data highlight will be the US CPI for August, along with the weekly initial jobless claims. Elsewhere, the ECB will be making their latest policy decision.

Tyler Durden Thu, 09/11/2025 - 08:20

EU 'Chat Control' Hinges On Germany's Decision

Authored by Aaron Wood via CoinTelegraph.com,

As the EU Council heads to vote on the so-called “Chat Control” law, Germany could prove the deciding factor.

Put forward by Denmark, the law would essentially eliminate encrypted messaging, requiring services such as Telegram, WhatsApp and Signal to allow regulators to screen messages before they are encrypted and sent.

Legislators from 15 member states of the EU have indicated support for the bill, but those countries do not constitute at least 65% of the EU population, meaning they need additional support.

Germany has been on the fence about supporting the law, and it could deal a major blow to privacy in Europe if it decides to support it.

EU Chat Control bill aims to fight child abuse

The Regulation to Prevent and Combat Child Sexual Abuse (CSA), or “Chat Control” regulation, was first introduced by then-European Commissioner for Home Affairs Ylva Johansson in 2022. It aims to fight the spread of online child sexual abuse material (CSAM) through, among other things, screening messages before they are encrypted. The law has previously failed to achieve the support necessary to move forward.

On July 1, the first day of Denmark’s presidency of the Council of the European Union (EU Council), the country said the directive would receive “high priority.”

Since the beginning of Denmark’s six-month presidency of the council, member states have been solidifying their positions, which they are expected to finalize before a meeting on Sept. 12 and an eventual vote on Oct. 14.

The supporting block needs more support to comprise 65% of the EU population and obtain a qualified majority. Six countries remain undecided, according to Fight Chat Control, an activist group opposed to the regulation:

1. Estonia

2. Germany

3. Greece

4. Luxembourg 

5. Romania

6. Slovenia.

Among these countries, Germany is necessary to sway the outcome of the EU Council vote. Its 83 million citizens would bring the population of countries supporting Chat Control to some 322 million, or 71% of the EU. The other five countries combined, even if they voted in support, do not make up a large enough segment of the population.

Per Fight Chat Control, many German members of the European Parliament (MEPs) oppose the draft law. Citing documents from a July 11 meeting leaked to German publication Netzpolitik.org, it found opposition to Chat Control across the political spectrum. MEPs from the Bündnis 90/Die Grünen and Alternative für Deutschland — respectively representing the center-left and far-right of German opposition politics — oppose Chat Control.

However, an equally large number of parliamentarians from the ruling Social Democrats, Christian Democrats and Social Democratic Union of Bavaria are reportedly uncommitted.

Some are concerned that these uncommitted lawmakers could be inclined to take existing German law and apply it to the entire EU.

Germany already has laws that allow police to circumvent encryption used by popular messaging platforms like WhatsApp and Signal. In 2021, the Bundestag amended laws to allow the police to intercept communications of “persons against whom no suspicion of a crime has yet been established and therefore no criminal procedure measure can yet be ordered.”

Software developer and privacy rights advocate Jikra Knesl said, “A form of ChatControl already exists in Germany. Companies like Meta are sharing their reports with the police.”

If expanded to the entire EU, it could affect “millions of innocent people whose homes might be searched even when they did nothing wrong,” he said.

Civil society mobilizes against Chat Control 

As the decision draws closer, civil rights groups, activists and even European parliamentarians have been speaking out against Chat Control.

Emmanouil Fragkos, an MEP for the right-wing Greek Solution party, submitted a parliamentary question about Chat Control in July. He said that a review of the law “raised new, grave concerns about the respect of fundamental rights in the EU.”

The law faces a reading and critical vote at the EU Council. Source: EU Council

Oliver Laas, a junior lecturer of philosophy at Tallinn University, wrote in an op-ed on Monday that laws like Chat Control “are laying the groundwork in the present for a potential democratic backslide.”

“In a world that is slowly but surely becoming more authoritarian, individuals are not protected by the state’s surveillance capabilities being reined in by law — they are protected by the absence of such capabilities altogether,” he said.

Another point of contention is the impact Chat Control could have on the efficacy of encryption technology. 

Fragkos said that creating mandatory gaps in encryption would “create security gaps open to exploitation by cybercriminals, rival states and terrorist organisations.”

The FZI Research Center for Information Technology, a nonprofit organization for IT research, released a position paper opposing Chat Control last year. It acknowledged that the goal of the law is undisputed, but Chat Control’s implementation would both weaken user rights to privacy and the efficacy of encryption technology itself.

Sascha Mann, policy shaper for digitalization and digital rights at Volt Europa — a federalist, pan-European political party in the European Parliament — also questioned the efficacy of Chat Control.

“Besides the issues of privacy and consent, chat control may even hinder law enforcement efforts to effectively fight sexual abuse,” he said.

The sheer volume of content sent by messengers in the EU would “result in an abundance of false positives that would eat up law enforcement resources.”

Some 400 scientists from global research institutions confirmed this problem of false positives in an open letter signed this morning. 

“Existing research confirms that state-of-the-art detectors would yield unacceptably high false positive and false negative rates, making them unsuitable for large-scale detection campaigns at the scale of hundreds of millions of users as required by the proposed regulation,” the letter read.

Mann suggested it would be better for the EU to implement solutions suggested by organizations fighting CSA. These included deleting CSA materials online after an investigation and increasing law enforcement resources.

On Friday, Europe will see whether these concerns are enough to convince undecided MEPs and chart the future for digital privacy, or lack thereof, in the EU.

Tyler Durden Thu, 09/11/2025 - 08:05

ECB Preview: September Pause

The European Central Bank is in no rush to lower interest rates again: as Bloomberg's David Powell notes, policymakers are waiting for clearer signals on how the economy is responding to trade headwinds and underlying inflation has yet to fall as much as they would like. The latest EU-US deal offers little relief and tariff effects will probably become more visible in the months ahead. Bloomberg Economics expects the ECB to hold interest rates steady at the meeting on Sept. 11 after 8 straight rate cuts, and cut next in December.

• Better-than-expected economic data has quieted the doves and likely strengthened the hand of the hawks. The Bloomberg ECB speak Index has reached its highest level since March 2024, signaling a much less dovish Governing Council.
• Positive data surprises will prompt the ECB’s staff economists to revise up their GDP forecast for 2025. Further out, however, the recent trade deal between the EU and the US points to a larger tariff shock than assumed in the June projections, leaving risks skewed to the downside for both the GDP and inflation forecasts.
• US tariffs remain a serious threat for the euro-area economy. The negative effects are already starting to emerge in the national accounts data and will eventually become more apparent in activity data as well as in the inflation reports.

Here's what everyone else expects, courtesy of Newsquawk: 

OVERVIEW: 66/69 of those surveyed by Reuters expect the ECB to hold the Deposit Rate at 2.0% with markets assigning a 99% chance of such an outcome. Given the EU-US trade agreement, resilient growth in the face of trade tensions and a modest uptick in inflation, there is little cause for policymakers to loosen policy at this meeting. Markets remain undecided on whether the ECB will cut rates again, with around a 50% chance of a reduction priced by February next year. With the rate decision and accompanying statement expected to be a non-event, focus will be on the ECB projections with particular attention on the 2026 inflation forecast, currently just 1.6%. PRIOR MEETING: As expected, the ECB stood pat on rates, keeping the deposit rate at 2%. The accompanying policy statement carried little of interest, noting that incoming information is broadly in line with the Governing Councilʼs previous assessment of the inflation outlook. Additionally, the statement repeated the Bank's meeting-by-meeting and data-dependent approach. At the followup press conference, when questioned about the recent EUR appreciation and VP de Guindos' remark about the complications that EUR/USD breaching 1.20 would bring, President Lagarde stated that the ECB does not target FX levels but is monitoring the situation. Lagarde reiterated that policy remains in a good place, suggesting that policymakers are not in a rush to adjust policy. This point was also underscored by the President emphasising that the ECB will not be swayed by a temporary undershoot in inflation (current 2026 forecast sees inflation at 1.6%), adding that inflation is still expected to stabilise at target over the medium term.

RECENT ECONOMIC DEVELOPMENTS : Flash HICP metrics for August showed the headline Y/Y print rose to 2.1% from 2.0%, super-core remained at 2.3% and the services metric slip to 3.1% from 3.2%. Summarizing the data, ING wrote that the report confirmed "a rather stable inflation climate despite ample risks to the outlook". The ECB's July Consumer Expectations Survey saw the 1yr forecast hold steady at 2.6% and the 3yr print rise to 2.5% from 2.4%. In terms of market gauges, the 5y5y inflation forward has nudged lower from around 2.12% at the time of the last meeting to current levels of circa 2.10%. On the growth front, Q/Q growth in Q2 slowed to 0.1% from 0.6% amid an unwind of the tariff front-loading effect seen at the start of the year. More timely survey data from S&P Global saw the composite PMI metric move further into expansionary territory with the pace of expansion ticking up to a one-year high. In the labour market, the Eurozone unemployment rate remains at the historical low of 6.2%. Finally, since Julyʼs confab, the EU and US have formalised their trade agreement, which will see most EU goods subject to a 15% tariff vs. the initially threatened 30% level.

SEPTEMBER MEETING: 66/69 of those surveyed by Reuters expect the ECB to hold the Deposit Rate at 2.0% with markets assigning a 99% chance of such an outcome. Given the EU-US trade agreement, resilient growth in the face of trade tensions and a modest uptick in inflation, there is little cause for policymakers to loosen policy at this meeting. Moving forward, there is clearly a split of views on the Governing Council, with the doves on the board, such as Finlandʼs Rehn, flagging the likelihood of greater downside risks to inflation. However, the hawks on the GC, such as Germanyʼs Schnabel, are of the view that rates are already mildly accommodative, and do not see a reason for a further rate cut, adding that global rate hikes may come earlier than people think. Market pricing sees a roughly 50% chance of a rate cut by February next year. Given the lack of fireworks expected within the policy statement, markets may be guided more by the accompanying macro projections. During the press conference, President Lagarde will likely be asked about any potential backstops for French debt following the (as expected) fall of PM Bayrou and the modest widening of the OAT-Bund 10yr spread to just over 83bps; shy of the 88bps YTD peak and 90bps from 2024. The Transmission Protection Instrument (TPI) is the main tool at the ECBʼs disposal. However, deployment appears to be some way off yet, absent a material rise in spreads. Prior to the vote occurring, Lagarde said the French banking system is not a source of risk, but that she is very attentive to bond spreads.

MACRO PROJECTIONS: For the accompanying macro projections, focus will be on the 2026 inflation forecast, which is currently expected to come in materially below the Bankʼs 2% target at 1.6%. Newswire consensus looks for an upgrade to the 2026 inflation view to 1.9% with 2025 to be raised to 2.1% from 2.0% and 2027 held at 2.0%. On the growth front, 2025 growth is expected to be raised to 1.1% from 0.9%, 2026 maintained at 1.1% and 2027 upgraded to 1.5% from 1.3%. Current forecasts

HICP INFLATION:

• 2025: 2.0%
• 2026: 1.6%
• 2027: 2.0%

HICP CORE INFLATION (EX-ENERGY & FOOD):

• 2025: 2.4%
• 2026: 1.9%
• 2027: 1.9%

GDP

• 2025: 0.9%
• 2026: 1.1%
• 2027: 1.3%

In short: expect a snoozer of a meeting with action picking up again at the end of 2026.

Tyler Durden Thu, 09/11/2025 - 07:49

France In Flames As The 'Block Everything' Protest Movement Sweeps The Country

Authored by Rick Moran via PJMedia.com,

France and its hapless President Emmanuel Macron are in deep trouble...

On Monday, Macron's government failed to survive a "no-confidence" vote as the country spiraled into crisis. What's most worrying for Macron is that the vote wasn't even close. Prime Minister François Bayrou was dumped overwhelmingly in a 364-194 vote. At issue: Bayrou's sensible but unpopular notion that France had to cut spending to address a growing debt crisis.

"Sensible" and "socialism" don't ordinarily go hand in hand. Thus, in office only since December, Bayrou was given an unceremonious heave-ho.

Macron turned to an old ally to replace Bayrou. He named departing defense minister Sébastien Lecornu to be the fourth prime minister of Macron's government this year.

Lecornu is the only minister to have been in every government since 2017. He has his work cut out for him. He has to pass a budget by year's end and deal with a growing protest movement that will fight tooth and nail to prevent Macron's "austerity budget" from passing.

Macron gambled and called for a "snap" election last year, hoping to increase his slim parliamentary majority. It failed miserably when the populists and the far left made significant gains. Now, the streets are full of angry Frenchmen, and the nation's stability is in question.

NBC News:

Protesters set fires as they blocked highways and gas stations across France early Wednesday as part of a new nationwide movement. Authorities deployed 80,000 police, who made hundreds of arrests and fired tear gas to disperse crowds.

The "Block Everything" movement was born online over the summer in far-right circles, but spread on social media and was co-opted by left-wing, antifascist and anarchist groups. It now includes France’s far-left parties and the country’s powerful labor unions.

Their joint day of unrest adds to the country’s political turmoil, after the collapse of centrist President Emmanuel Macron’s government earlier this week in a similar backlash over proposed budget cuts and broader anger at the political class.

‼️ Massive riots taking place in France as Macron weighs suspending social media to stem the tide.

France’s government has imploded.
pic.twitter.com/XkyqreoTGZ

— Graham Banks Cull (@1GrahamDaily) September 10, 2025

France is fed up. Streets are blocked, people are angry, cops are everywhere. Macron’s govt already collapsed and the chaos keeps growing.

This isn’t protest anymore, it’s rebellion. #BloquonsTout #protesters #MacronDemission pic.twitter.com/kyVFsXpsar

— Maverick Ops (@maverick2886) September 10, 2025

The far left, the largest bloc in parliament, wants Macron's scalp. Jean-Luc Mélenchon, the longtime leader of the far-left party France Unbowed, said, “Only the departure of Macron himself can put an end to this sad comedy of contempt for Parliament, voters and political decency.”

Jordan Bardella, the president of the populist National Rally, said his party would give Lecornu the benefit of the doubt and refuse to join the far left in attempting to oust him. But Bardella wasn't enamored of Lecornu.

“Emmanuel Macron’s motto: you don’t change a losing team,” Bardella wrote on social media. “How could a loyal supporter of the President break with the policy he has been pursuing for eight years?”

In the capital Paris, groups gathered and set up barricades at several entry points to the city. Demonstrations were expected to continue throughout the day, with travel disrupted as some of the main transport unions joined the strike.

Hundreds remained gathered outside Gare du Nord, one of the city's main train stations, despite earlier attempts from police to disperse the crowds with tear gas.

“We are here, even if Macron doesn’t want us, we are here,” they chanted.

There were dramatic scenes outside a high school in eastern Paris, where police clashed with dozens of students who had blocked entry to the building.

French political observers believe it's only a matter of time before Macron will be forced to call for another snap election. This would please both the left and the right, who believe they can gain a majority in parliament. The result of another snap election will probably be the same as the last: a hung parliament and more unrest in the streets. 

Tyler Durden Thu, 09/11/2025 - 07:20

ICE Flights Have Ramped Up Since May

The number of deportation flights has ramped up in the United States since May, according to data collected and analysed by Thomas Cartwright for Witness at the Border.

As Statista's Anna Fleck shows in the chart below in January, 109 flights were recorded by the immigrant advocacy group. June and July each saw more than 200 deportation flights, the highest figures since Cartwright started tracking flights in 2020.

You will find more infographics at Statista

Most flights carried out on behalf of the U.S. Immigration and Customs Enforcement are domestic shuffles between detention facilities. This is where people are ferried from one part of the U.S., largely based on detention center bed availability following the rise in ICE arrests.

Between January and July of this year, Cartwright counted 3,650 domestic shuffle flights, compared to 1,539 connections and returns and 1,101 removals flights. As the following chart shows, domestic shuffle flights accelerated this year, rising from 273 flights in January to 727 in July.

The U.S. military have carried out 68 deportation flights from January through July, nine of which passed through Guantanamo. However, the majority of flights are being operated by charter airlines. In July, GlobalX Air operated 50 percent of total flights, followed by Eastern Air Express at 24 percent, Avelo at 20 percent, military at 2 percent and other carriers at four percent. This is proving to be a big business for some of these airlines, with more than half of GlobalX’s revenue having come from ICE in Q2 2025, as reported by the Financial Times.

Since ICE Air does not disclose information or data about their flights, this data is based on flight information from the publicly available FlightAware application, FlightRadar24, AirNav, and the ADB-S tracking system.

Tyler Durden Thu, 09/11/2025 - 06:55

Belarus President Urges Banks To Expand Crypto Use As Sanctions Bite

Authored by Stephen Katte via CoinTelegraph.com,

Belarusian President Alexander Lukashenko has reportedly pushed the country’s banks to expand how they use crypto, admitting that sanctions have greatly impacted the economy.

Lukashenko told the heads of Belarus’ central and commercial banks in a meeting that the use of digital tokens needs to be expanded, the state-owned Belarusian Telegraph Agency reported on Tuesday.

“Over the past five years, the national economy, and with it the Belarusian banking sector, have faced unprecedented challenges,” Lukashenko said. “The government and the National Bank have been given corresponding instructions. Now, act.”

Lukashenko’s latest push comes days after he told lawmakers to create transparent rules for the country’s cryptocurrency market on Friday, as the country’s economy has declined due to shrinking exports under broad EU and US sanctions for supporting Russia’s invasion of Ukraine.

President Alexander Lukashenko told banks to expand crypto usage after telling lawmakers to develop rules for the sector. Source: YouTube 

Due to their anonymous and decentralized nature, cryptocurrencies have been used among other methods to help countries, most notably Russia and North Korea, evade sanctions and conduct trade.

Payments via Belarusian crypto exchanges could top $3 billion  

The total number of crypto users in Belarus is expected to surpass more than 855,000 by 2026, out of a population of 9.1 million, while user penetration is projected to increase to 9.57% according to online data platform Statista.

Lukashenko claims all the exchanges operating in the country, such as Binance, OKX and KuCoin, are on track to possibly double in external payments by the end of the year.

“Today, cryptocurrency-based transactions are more active than ever, and their role in facilitating payments is growing,” he said.

“In the seven months of this year, the volume of external payments through cryptocurrency exchanges amounted to $1.7 billion. According to expert estimates, it may reach $3 billion by the end of the year.”

In September last year, Lukashenko signed a law banning individuals from buying and selling crypto outside of Belarusian exchanges.

Another push for digital payment systems

Lukashenko also told the banking leaders to increase the adoption of digital payment systems, after making a “start with QR codes,” and to launch an instant payment system by the end of the year.

VTB Bank Belarus, a Russian majority state-owned bank, started offering its customers payment options using QR codes connected directly to the online payment system ERIP.

Lukashenko said the country’s digital strategy must prioritize adopting biometric technologies, establish a dedicated IT company to reduce reliance on external service providers and integrate artificial intelligence-based solutions.

“Banks must try to make the most of modern technology. Digitalization is not an end in itself; it must deliver tangible economic results,” he added.

Belarus crypto attitude

Belarus’s attitude toward crypto has been somewhat mixed in the past.

In March, Lukashenko instructed his energy minister to begin developing the country’s cryptocurrency mining industry because the country had an excess of electricity.

In the summer of 2023, the Belarusian Ministry was working on banning peer-to-peer transactions in crypto, such as Bitcoin.

However, the country also legalized crypto transactions in 2018 and allowed selling, exchanging, and mining. 

Tyler Durden Thu, 09/11/2025 - 06:30

Amb. Huckabee Clarifies The US Won't Oppose West Bank Annexation

Authored by Dave DeCamp via AntiWar.com,

US Ambassador to Israel Mike Huckabee said in an interview last week that the US has never asked Israel to "not apply sovereignty," referring to the possibility of Israel annexing parts of the Israeli-occupied West Bank.

"The US has never asked Israel to not apply sovereignty," Huckabee said, according to a September 5 post from a journalist for Israel’s Channel 14. "I have repeatedly stated that the US respects Israel as a sovereign nation and will not tell Israel what to do. This is also what Secretary Rubio has said as recently as this week."

Source: NPR

Israeli officials said last week that Secretary of State Marco Rubio had signaled to them that the US wouldn’t oppose Israel if it moved to annex the West Bank. He has also said publicly that annexation could be Israel’s response to Western states taking steps toward recognizing a Palestinian state.

Israeli Finance Minister Bezalel Smotrich recently outlined a proposal for annexing 82% of the West Bank and leaving six Palestinian population centers isolated as islands. He said that his plan aims for “maximum territory and minimum Arab population.”

Huckabee has also made clear that the Trump administration doesn’t oppose the recent major expansion of illegal Jewish settlements in the West Bank, which Smotrich said would "erase" the idea of a Palestinian state.

Huckabee has claimed that the settlements are not illegal under international law despite their clear prohibition under the Geneva Convention of 1949, which both the US and Israel have signed and ratified.

Huckabee is a Christian Zionist, and his approach to Israel and Palestine is based on his view that God gave historic Palestine to the modern state of Israel, a theology that is rejected by the Catholic Church, the Orthodox Church, and most other Christian denominations.

When asked in a recent interview with The Jerusalem Post about the growing skepticism of Israel among Americans, Huckabee suggested Christian pastors who didn’t teach his viewpoint were to blame.

"There are pastors in the evangelical world who have not explained to their congregations where the support for Israel comes from biblically," he said.

Tyler Durden Thu, 09/11/2025 - 05:00

How Much Are Teachers Paid Around The World?

Teachers' salaries vary significantly around the world.

As Statista's Anna Fleck shows in the chart below, based on new data published in the OECD Education at a Glance report, that salaries in Germany, Luxembourg and the Netherlands are at the higher end of the spectrum, with primary school teachers in public institutions earning on average over $90,000 per year.

You will find more infographics at Statista

Poland is among the countries found towards the other end of the spectrum, with teachers earning around $55,407 per year.

These calculations are based on the average actual salaries of 25 to 64 year old teachers in public schools and were converted to U.S. dollars using purchasing power parities for private consumption.

Of the 34 OECD countries that provided data on average teacher salaries, the average annual salary came out at $57,399 in 2024.

The United States performed above this mark, with primary school teachers earning an annual salary of $68,153.

In the United Kingdom, teachers in England had a lower than average salary at $54,550 while Scotland’s figure was $62,584.

These figures hide the differences that exist within countries. OECD analysts explain that teachers may enter the profession with different levels of qualifications and differ in their years of accrued experience, with a higher level often linked to a higher salary band. In Colombia, a maximum statutory salary in 2024 was $119,850. This is a salary at the top end of the scale for teachers who have the maximum number of qualifications. By contrast, the minimum statutory salary in Colombia was $26,862. This figure reflects starting salaries for teachers with the minimum number of required qualifications. In the U.S., the maximum was $85,827, while the minimum was $49,386. In England, $97,930 was the top level and $41,468 the minimum.

Teachers’ salaries also typically increase with the level of education that they are teaching. According to the report, the figures are lowest for pre-primary school at an OECD average of $55,725, rising to $59,673 at primary school level, $61,563 at lower secondary school and $63,925 at upper secondary school.

The OECD Education at a Glance report, released on Tuesday, analyzes the state of education around the world, spanning all levels of education and providing data on topics from teacher retention rates to the latest figures on unemployment.

Tyler Durden Thu, 09/11/2025 - 04:15

Sudan's Hidden War: Muslim Brotherhood's Grip On Army Threatens Regional Stability, Global Trade

Authored by Anna Mahjar-Barducci via The Gatestone Institute,

Sudan's brutal civil war, often overshadowed by global headlines, is not just a clash between the Sudanese Armed Forces (SAF) and their former military allies turned rivals, the Rapid Support Forces (RSF). It is a calculated power grab by the Muslim Brotherhood, which appears to be using the SAF as a Trojan horse to dominate northeast Africa and the Red Sea, a critical artery for global commerce.

Despite recent moves by SAF leader General Abdel Fattah Al-Burhan to curb Islamist influence, presumably at the request of the United States or Egypt, the efforts of the Muslim Brotherhood, which has deep roots in his army, to achieve control of Sudan, northeast Africa and the Red Sea, signal a dangerous threat that could disrupt oil supplies, inflate global prices, and revive Sudan as a terrorist hub, imperiling Western interests.

The Muslim Brotherhood, sponsored by Qatar, appears to be hijacking the SAF to stage a takeover, recycling old alliances under new guises. Despite recent concessions to the United States and Egypt, the Muslim Brotherhood's grip in Sudan -- backed by Qatar and Iran -- threatens regional and global stability, potentially including freedom of passage in the Red Sea. The U.S. would do well to intensify sanctions, diplomatic pressure, and support regional actors in efforts to dismantle these networks.

The Muslim Brotherhood's influence is increasingly recognized as a global threat by governments in countries such as the United States and France. A May 21, 2025 report requested by the French government on the Muslim Brotherhood's role in France and Europe, detailed the threats posed by the Islamist movement shaping "parallel Islamic ecosystems," challenging Western secular values.

A Legacy of Islamist Control

Sudan's descent into chaos began in 1989, when General Omar Al-Bashir, backed by the Muslim Brotherhood's National Islamic Front, seized power. For three decades, his regime orchestrated genocides in South Sudan and Darfur, sheltered Osama bin Laden from 1992 to 1997, and enabled Al-Qaeda's attacks, including the 1998 U.S. Embassy bombings in Kenya and Tanzania. Bashir's regime also funneled Iranian missiles to Hamas in the Gaza Strip, and supported Lord's Resistance Army in Uganda, making Sudan a global extremist stronghold.

The 2019 ouster of Al-Bashir had sparked hopes for democracy, but Burhan's 2021 coup against the transitional government and the 2023 war with the RSF, which wanted to defeat Burhan and his Muslim Brotherhood allies and take over the country, crushed those dreams. Beneath the surface, the Muslim Brotherhood — known in Sudan as the Islamic Movement — has entrenched itself in the SAF, and turned it into a tool for their regional ambitions to take control of northeast Africa and the Red Sea.

The Muslim Brotherhood is not just allied with the SAF; individuals in it seem to be steering the SAF to take total control of Sudan in order to make it the Muslim Brotherhood's stronghold in Africa and the Middle East.

Sudan, at the crossroads of Sub-Saharan Africa and the Middle East, happens to be in an extremely critical strategic position. It has access to the Red Sea and vital trade routes such as the Suez Canal, and is also a crucial transit point for migrants traveling from the Horn of Africa and the Sahel to North Africa, then on to Europe.

The SAF is infiltrated by jihadist factions such as the Al-Bara Bin Malik Brigade (the Muslim Brotherhood's local military arm), the Bunyan Al-Marsous Brigade, and Justice and Equality Movement rebels led by Finance Minister Jibril Ibrahim. These groups, tied to Bashir's ruthless National Intelligence and Security Service, frame their fight as a "jihad" against the RSF, which is backed by Sudan's secular civil society.

Social media videos show the Al-Bara Bin Malik Brigade, in Omdurman, halting RSF advances and bolstering SAF operations in Khartoum. A retired officer told the media that Islamic extremists have filled critical infantry gaps. Ali Ahmed Karti, the U.S.-sanctioned Islamic Movement leader, is, as reported by Arab media outlets, a key orchestrator of the SAF-Muslim Brotherhood alliance. Since his student days, Karti has organized Brotherhood loyalists in the army, and later packed the SAF with jihadists.

Reports in the Saudi newspaper Asharq Al-Awsat reveal that after 1989, the leadership of the Muslim Brotherhood in Sudan, which was aligned with the Bashir government, purged thousands of non-fundamentalist officers, assassinating some, and took control of admissions to the Military Colleges. By 2019, the SAF was ideologically aligned with the Muslim Brotherhood.

It was Karti's ideological influence that apparently derailed the possibility of a civilian-led transitional government in Sudan after the October 2021 military coup. Karti also unleashed jihadist battalions, which were rebranded as Burhan's "Popular Resistance."

This summer, there seemed to be cracks in the alliance between the SAF and the Muslim Brotherhood. In August, Burhan fired five senior generals who are Islamic extremists, including General Nasreddin, head of the SAF Armored Corps, whom the Muslim Brotherhood had reportedly been grooming as a potential successor to Burhan. One analyst suggested that the five generals were dismissed after Burhan met with U.S. Special Envoy Mossad Boulos in Switzerland, on August 11, 2025. Researcher Mujahid Ahmed, however, warns that the Muslim Brotherhood's influence persists, extending into civilian institutions, especially the foreign affairs and justice ministries. According to the Ayin Network, Al-Burhan apparently still relies on Karti and Bashir's loyalist, Ahmed Haroun, for battlefield support, indicating a tactical, not total, break.

Iran's Arms and Qatar's Role

Iran has been supplying the Muslim Brotherhood-SAF axis with arms, including Ababil-3 and Mohajer-6 drones, which were delivered to Port Sudan in March and June 2024. Satellite imagery viewed by the BBC confirms their presence at a military site near Khartoum. Iran's support of this Muslim Brotherhood-SAF axis, tied to its ambitions to have a presence in the Red Sea, coincides with the Brotherhood's goals: namely, threatening U.S. allies such as Israel, Saudi Arabia and Egypt.

Why It Matters to the West

The Red Sea handles 10-15% of the world's maritime commerce, including vital oil and gas shipments. In a conflict, the Muslim Brotherhood-controlled Sudan, using the SAF as a proxy, could choke this route as the Houthis have been doing, thereby spiking prices and impairing American and other economies. The Muslim Brotherhood's ties to Al-Qaeda and the Islamic State risk turning Sudan into a terrorist base targeting Western and allied Middle Eastern interests.

Trump's Sudan Gamble

The Trump administration is navigating a tightrope, trying, it seems, to balance Egypt's pro-SAF stance. Egypt is actively supporting the SAF to bolster its stability as a national institution, while simultaneously working to curb the influence of the Muslim Brotherhood and its sponsor, Qatar. Ayin Network noted that Egypt insists "the SAF must remain central to any post-war political order." Burhan's "cosmetic" purge of Islamist generals shows that he can indeed be influenced by Egypt and by the United States, but his reliance on the Muslim Brotherhood's financial and military support limits his ability to implement any reforms .

A Global Wake-Up Call

Sudan is evidently very much a part of the Muslim Brotherhood's global agenda. Ignoring events there will only allow a hostile stronghold to emerge in a region strategically vital for the interests of the West.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Tyler Durden Thu, 09/11/2025 - 03:30

Spain's Power Grid In One Chart: Net Zero Drive Pushes Economy Toward Paralysis

Days before the media celebrated Spain's first full weekday powered entirely by renewables in late April, the unthinkable happened: the grid collapsed, triggering a nationwide blackout. The incident served as a stark reminder to other Western nations, including 'America First' folks, that overreliance on intermittent sources, such as solar and wind, creates not just grid fragility but also a national security risk. 

A new report from El País, citing data from the Association of Electric Power Companies (Aelec), based on data published by Iberdrola, Endesa, Naturgy, and EDP, warned that Spain's peninsular power grid is severely overstretched and unable to absorb additional demand. In fact, most of the country's electricity hubs have already reached their limits.

Aelec data showed that 83.4% of all these power nodes in the Spanish grid are at full capacity and can no longer accept new connections. 

Most regions in Spain have limited spare grid capacity to accommodate new energy demand without compromising the system's stability. 

The problem of grid capacity shortages arises as Europe's overreliance on intermittent sources, such as wind and solar, has left the continent's energy grid vulnerable. 

Brussels has had a weird obsession with all things "green" energy, which is not as green as it's made out to be, sparking the blackout in Spain in late April. Also, energy prices have soared, and power bills have skyrocketed as liberal elites on the continent sacrificed grid reliability to combat some alleged climate crisis. 

As we all know, net zero was bullshit and won't come until nuclear power generation is ramped up in the 2030s, if not in the decade after. However, the net zero narrative was lucrative for woke politicians and their allies (billionaires). And under the banner of fighting an alleged climate crisis, these lawmakers funneled billions of dollars into subsidies, grants, and contracts that enriched a web of special interests, from renewable energy companies to consulting firms to NGOs and financial institutions.

After this massive boondoggle, what are the Europeans left with? Look no further than Spain: a fragile, maxed-out grid that threatens to paralyze the economy as power constraints will stall new factories and data center buildouts. Well done, Brussels - it's almost as if these so-called 'green' policies were never intended to succeed, but rather to neuter the E.U. and give a clear path for China's economic rise.

Tyler Durden Thu, 09/11/2025 - 02:45

The US Might Try To Manipulate Nepal Into Weaponizing Its Revived Border Dispute With India

Authored by Andrew Korybko via Substack,

The student-driven riots that were putatively sparked by the state’s banning of social media after top platforms failed to register in line with the law might be a front for ultra-nationalist extremists backed by the West in a remix of summer 2024’s Bangladeshi regime change model.

Nepal formally complained in late August after China and India agreed to resume their border trade through the Lipulekh crossing. Newly ousted Prime Minister KP Sharma Oli also brought it up during his meeting with President Xi Jinping on the sidelines of the SCO Summit in Tianjin. Kathmandu lays claim to this territory and a mountainous sliver beyond per a colonial-era dispute but only rigorously began pursuing it in the run-up to summer 2020’s Sino-Indo clashes.

This context suggests that Nepal expected Chinese backing against India, calculating that it could benefit from this via privileged economic and military support or at the very least by profiting off of facilitating their trade if their bilateral dispute kept border crossings closed indefinitely. What Oli (who was Prime Minister back then and once again till recently after a three-year hiatus) couldn’t have foreseen, just like mostly everyone else, was the Sino-Indo rapprochement that the US just inadvertently brought about.

He's a communist with Machiavellian characteristics as proven by the aforementioned foreign policy calculation and his hitherto crafty politicking, but he’s also somewhat of an idealist who simply couldn’t countenance the realpolitik involved in fellow communist China’s latest own calculations vis-à-vis India. Simply put, China’s interests in the present context are best served by prioritizing India’s interests over Nepal’s in those two’s dispute, which appears to have truly caught Oli and his government off guard.

Nevertheless, China’s mercantile move doesn’t come at any tangible expense to Nepal since it hasn’t controlled this territory for over 200 years, but the political consequences might possibly push Nepal to recalibrate its balancing act by leaning more on the US. That’s precisely what India did from 2015 till just recently due to the China-Pakistan Economic Corridor, the flagship project of China’s Belt & Road Initiative, passing through Pakistani-controlled Kashmiri territory that India claims as its own.

India’s pro-US foreign policy recalibration took the form of them comprehensively expanding economic and military ties, while Nepal’s might focus more on developmental assistance such as the almost-cut “Millennium Challenge Corporation”, which is aimed at countering Sino-Indo influence there. Geography limits the extent to which a potentially pro-US Nepal could become a wedge between China and India, but it could still at minimum turn into a bastion of hostile “NGO” operations after Oli’s surprise ouster.

The student-driven riots that were putatively sparked by the state’s banning of social media after top platforms failed to register in line with the law might be a front for ultra-nationalist extremists backed by the West in a remix of summer 2024’s Bangladeshi regime change model. It therefore can’t be ruled out that the new Nepali authorities might be tasked by the US with weaponizing their country’s border dispute with India as punishment for Delhi refusing to submit to Washington’s demands on Russia.

All in all, there are three takeaways from the latest twist in this dispute that suspiciously preceded Oli’s ouster:

1) China is prioritizing India’s interests over Nepal’s in furtherance of its own;

2) Nepalis might be manipulated by the US against both as a result; and

3) this could be weaponized by the new authorities.

The best-case scenario is that they prioritize economic and anti-corruption reforms instead of letting themselves be exploited as geopolitical pawns, but it’s too early to say exactly what they’ll do.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Tyler Durden Wed, 09/10/2025 - 23:50