Collinson FX: Sep 11: US Fed rate cuts expected, Chinese go into reverse
by Collinson FX 11 Sep 2025 14:54 NZST
11 September 2025
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Sept 11: US Fed rate cuts expected
US PPI wholesale inflation data, eased more than expected, setting the table for tonight’s CPI inflation reading.
US CPI inflation is expected to come in at 2.9%, so anything around this number, or lower, will ensure Fed rate cuts become almost a certainty.
Chinese CPI inflation was negative and they have almost deflationary problems, easing monetary concerns. The EUR is now below 1.1700, to the downside, while the GBP holds above 1.3500.
The likelihood of US rate cuts eased the reserve against commodity currencies, with the AUD consolidating above 0.6600, while the NZD trades up to 0.5950. All eyes are focused on the release of the US CPI inflation read later today.
Sept 10: French Govt falls again
US Department of Labor, released a record revision lower, of the all-important Non-Farm Payroll numbers.
It appears that job numbers were overstated by nearly one million jobs under the previous Biden administration. This is historical data, but does explain the firing of the Administrator and undermines confidence in one of the most important US data numbers.
The French Government has fallen, for the 4th time in two years, under President Macron. The French are not happy campers.
Markets await important inflation data from China and the US, which will give some guidance to market sentiment, for the remainder of the week. The US Dollar was steady, with the EUR holding above 1.1700, while the GBP was steady on 1.3520.Commodity currencies failed to build on recent gains, with the AUD failing to hold 0.6600, while the NZD struggles above 0.5900. Markets will look to US inflation data and Geo-Political events, to drive confidence and sentiment.
Sept 9: French Govt set to fall
Japanese PM Ishiba resigned over the weekend, setting up a new generation of Japanese leaders to take over, which the equity market rally seemed to welcome.
In Europe, the French Government looks set to fall, as the budget is a vote of confidence.(S-W: Which the Govt lost, and the nine-month old PM has resigned and President Macron has to appoint a new PM - the fifth in five years.) This will be yet another Macron Government to fall, as unrest builds, agitated and provoked by the most unpopular of French Presidents.
The US await inflation data, while bond yields head south, along with the US Dollar. The EUR jumped broke back above 1.1700, while the GBP surged through 1.3500.The softer reserve allowed for further strength in commodity currencies, with the AUD looking to regain 0.6600, while the NZD reclaimed 0.5900. All eyes are on the French Government and US inflation data.
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