Markets Today: Silver Hits Fresh All-Time Highs, Gold Up as Geopolitical Risks Rise, DAX Trades Below 50-day MA on US Labor Day Holiday

Economic

Summary:

Asian stocks slipped as chipmakers fell, though Alibaba’s surge lifted Hong Kong. Europe gained on defense and corporate news. Gold neared record highs on geopolitical risks; oil mixed; dollar weakened ahead of U.S. jobs data.

Asia Market Wrap - Alibaba on a Roll as Nikkei Slips

Stock markets in Asia generally went down after technology stocks fell in the US on Friday. Companies that make computer chips were hit the hardest, causing Japan's stock market to drop.

Hong Kong's market, however, did the opposite and went up. This was because the stock price for the company Alibaba jumped dramatically, which also helped boost the value of other artificial intelligence companies like Baidu and Tencent.

The drop for other major chipmakers, such as Samsung and SK Hynix, happened after the United States stopped allowing the sale of certain chip-making equipment to China.

Japan's main stock market index, the Nikkei, fell to its lowest level in three weeks.

Most of the decline was caused by sharp drops in two very large companies. The stock price for Advantest, a company that makes equipment for testing computer chips, fell significantly. At the same time, SoftBank Group, a major investor in technology and AI companies, also saw its stock price go down.

Several other companies related to computer chips also saw their stock prices fall. This included Disco, which dropped 7.7%, Socionext, which was down 6.3%, and Furukawa Electric, which fell 5.5%.

Together with Advantest and SoftBank Group, these five companies were the worst-performing stocks on the Nikkei for the day.

A different, broader measure of Japanese stocks, the Topix, fell by a much smaller amount.

China Factory Activity Steady as Asian Countries Feel the Bite

New reports released on Monday show that U.S. tariffs are hurting factory production throughout Asia. This bad news overshadowed some surprisingly good results from China, putting pressure on governments in the region to find ways to help their weak economies.

Experts are concerned because many Asian companies had previously rushed to ship their goods early to avoid the U.S. taxes. Now that those shipments are done, analysts believe these companies will struggle to make a profit in the future because their sales to other countries are expected to drop.

For example, countries that export a lot of goods, like Japan, South Korea, and Taiwan, all saw their factory activity decrease in August. This highlights the major challenge Asian countries face in dealing with the impact of the U.S. tariffs.

In Japan, factory activity shrank for the second straight month. While the situation improved slightly from July, the score was still below the 50-mark, meaning production is still contracting. A key problem for Japan is that orders for its goods from other countries fell at the fastest rate in over a year, mainly because of weak demand from China, Europe, and the U.S.

South Korea's factories also continued to shrink, marking the seventh month in a row of contraction. Similar to Japan, there was a very slight improvement from the previous month, but overall activity is still declining.

European Open - European Stocks Benefit from US Holiday

Stock markets in the UK and Europe started the day on a positive note. This comes after news that house prices in the UK are not rising very quickly.

The FTSE and the DAX are both higher this morning. The FTSE 100 went up by 0.3% with the DAX 0.5% higher.

The STOXX 600 is up 0.4% thanks in large part to aerospace and defence stocks with names like the UK’s BAE Systems leading the way with gains of around 2.4%.

The biggest winner in the UK is a software developer called Kainos Group, whose stock jumped over 17% after it predicted strong future sales. Domino's Pizza is also having a good day, with its stock up almost 7% after the company confirmed its financial goals and announced a plan to buy back its own shares.

Elsewhere, the Danish drug maker Novo Nordisk is up about 3% after sharing positive news that its weight-loss drug, Wegovy, is significantly more effective at reducing heart risks compared to a rival's treatment.

On the FX front, the US dollar is a bit weaker today, dropping to its lowest value in over a month. This continues its recent downward trend, as the dollar lost more than 2% of its value during August.

As the dollar has fallen, other major currencies like the Euro and the British Pound have become stronger. Against the Japanese Yen, the dollar is mostly unchanged this morning, but it also weakened against the Yen last month by 2.5%.

Meanwhile, China's currency, the yuan, is holding steady at a very strong level, near its highest point against the dollar in about ten months.

Currency Power Balance

Gold prices soared overnight as geopolitical risks piled up as the Financial Times reported overnight about the possibility of European troops in Ukraine with US backing.

This coupled with renewed tensions around Iran's nuclear programme and the weakening US Dollar amid rate cut expectations has pushed the precious metal to within touching distance of the all-time highs at $3500/oz.

Oil prices are a bit mixed this morning as different factors pull them in opposite directions. On one hand, things that could reduce supply, like the conflict between Russia and Ukraine, are pushing prices up. A weaker US dollar also helps lift prices.

On the other hand, worries that too much oil is being produced globally, along with concerns that U.S. tariffs could hurt the economy and lower the demand for oil, are trying to pull prices down.

As a result, Brent crude (the international price) is up slightly to around $67.79 a barrel, while WTI (the U.S. price) is down a little to $64.33. This comes after a weak August, when oil prices fell for the first time in four months because major oil-producing countries increased their supply.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, the European session will be quiet moving forward after PMI data was released this morning.

Spanish, French, Italian and Euro Area PMI all beat estimates but Germany did come in below expectations.

Moving forward, sentiment will be key and likely hinge on any news on the geopolitical front ahead of US jobs data this week. Remember it is aUS labor day holiday today and tis could lead to thin trading and low liquidity as the day progresses.

Chart of the Day - DAX

From a technical standpoint, the DAX is back at the 24000 handle as it eyes a bounce.

However, there are growing challenges as sentiment remains rather fragile.

Immediate resistance at rests at 24119 before the 24190 and 24350 will be key.

Immediate support rests at 23670 and 23440.

DAX Daily Chart, September 1. 2025

Source: marketpulse

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Winkelmann

Forex

Political

Economic

Good morning. Indian Prime Minister Narendra Modi meets Vladimir Putin today after he reset relations with China. German Chancellor Friedrich Merz sees the war in Ukraine dragging on with no clear end in sight. And the UK wins a £10 billion deal from Norway’s navy. Listen to the day’s top stories.Indian Prime Minister Narendra Modi was due to meet Vladimir Putin in Tianjin, China, today after resetting relations with Chinese President Xi Jinping, as the three countries seek to strengthen ties amid trade tensions with the US. The trio last met in 2024.

German Chancellor Friedrich Merz warned the Ukraine war may “go on for a long time.” Now in its fourth year, Russia’s full-scale invasion of Ukraine is the longest war in Europe since World War II. In an interview with ZDF, he also rejected a coalition partner’s call to raise taxes in Germany.Norway picked the UK as the supplier of frigates for its navy, in what would be its biggest ever defense investment. Norway had considered France, Germany and the US as a potential strategic partner for the deal, which the UK defense ministry said on Sunday was worth £10 billion.Former Barclays executive Naguib Kheraj is among candidates being considered as a potential successor to HSBC Chairman Mark Tucker, according to Sky News. Kheraj spent more than a decade at Barclays, including as group finance director and vice chairman. He has also been CEO of JPMorgan Cazenove and deputy chairman of Standard Chartered.

France accused Italy of fiscal dumping, sparking a heated exchange between the two nations. Italian Prime Minister Giorgia Meloni's office vehemently denied the allegations, asserting Italy's economic attractiveness stems from stability and credibility. The dispute risks reigniting tensions between Rome and Paris, potentially impacting their previously improved relations.

Check out our Markets Today live blog for all the latest news and analysis relevant to UK assets.A €2 trillion upheaval looms for European bond markets as the Dutch pension system undergoes reform.Russian President Vladimir Putin's assaults on Ukraine have worn down the will, the magnificent defiance, of the Ukrainian people, writes Max Hastings. Almost all now recognize, as they did not a year ago, that they will be obliged to cede the east of their country to win any hope of peace. This is monstrously unjust.

Source: Bloomberg Europe

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Warren Takunda

Stocks

London stocks had pared earlier gains to trade just a touch higher by midday on Monday, with defence firms and precious metals miners lending a hand.

The FTSE 100 was up 0.1% at 9,196.87, with the session expected to be fairly quiet as US markets will be closed for Labor Day.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Energy names are under mild pressure as oil prices extend their slide, while housebuilders could stay in focus after soft Nationwide data hinted at affordability strains. With few domestic catalysts, attention turns to central bank signals later this week to set the tone for the month ahead.

"US markets are closed for Labor Day, but headlines are anything but quiet. A federal appeals court ruled Trump’s global tariffs illegal, setting up a Supreme Court showdown before they expire in mid-October - injecting fresh uncertainty into trade policy. That backdrop, coupled with rising bets on a Fed rate cut later this month, has gold glistening near record highs as investors seek safety. All eyes now turn to this week’s labour data, which could shape the size of the Fed’s next move."

On home shores, a survey showed the downturn in the manufacturing sector continued in August.

The S&P Global manufacturing purchasing managers’ index fell to 47.0 from July's six-month high of 48.0. It was below the 50 mark that separates contraction from expansion for the eleventh month in a row.

The main factor underlying manufacturing sector weakness was a slump in new work intakes. New orders contracted at the fastest pace in four months and to one of the greatest extents seen over the past two years.

Lower new work inflows were put down to subdued client confidence, cost caution following the increases to minimum wages and employer NICs and tariff uncertainties.

Rob Dobson, director at S&P Global Market Intelligence, said: "Production volumes are still showing resilience in the face of global geopolitical uncertainty and US tariff policies, with both July and August having seen only slight contractions that were milder than those suffered earlier in the year. Business confidence has also lifted to a six-month high, reflecting hopes that the trading environment is starting to settle down.

"However, August also saw a steep drop in UK manufacturers' new orders, with total order books and overseas demand both falling at some of the fastest rates seen over the past two years. Weak market conditions, US tariffs and downbeat client confidence all contributed to the dearth of new contract wins. Job cuts were also reported for a tenth successive month, with factory headcounts dropping to one of the greatest extents post pandemic.

"The outlook for the sector therefore clearly remains very uncertain. With manufacturers fearing that possible government policy decisions, including potential tax increases, could further hurt their competitiveness in domestic and export markets, the upcoming Budget will likely prove very important in guiding business confidence about the year ahead."

Investors were also mulling the latest monthly Money and Credit report from the Bank of England, which showed that mortgage approvals for house purchases ticked up by 800 to 65,400 in July.

Net borrowing of mortgage debt fell by £0.9bn to £4.5bn in July, compared to a £3.2 billion increase of net borrowing to £5.4bn in June.

The ‘effective’ interest rate - the actual interest paid - on newly drawn mortgages fell for the fifth month in a row, to 4.28% in July from 4.34% the month before. However, the rate on the outstanding stock of mortgages remained at 3.88%.

The report also showed that net borrowing of consumer credit by individuals edged up to £1.6bn from £1.5bn. Within that, net borrowing through credit cards increased to £0.8bn in July from £0.7bn in June.

Net borrowing through other forms of consumer credit such as car dealership finance and personal loans rose to £0.9bn from £0.7bn.

The latest survey from Nationwide was also in focus, as it revealed a slowdown in annual house price growth.

Elsewhere, a survey from the Confederation of British Industry showed that private sector firms across all major sectors in the UK expect economic activity to weaken in the coming quarter.

In equity markets, defence names Babcock, Rolls-Royce and BAE Systems all gained after the UK secured a £10bn deal to supply Norway with at least five new warships. The deal supports 2,000 jobs at BAE Systems’ shipyards in Glasgow and a further 2,000 roles across the UK maritime supply chain until the late 2030s, the government said.

Precious metals miners Fresnilo, Endeavour and Hochschild shone as gold prices neared a record high, while silver hit a 14-year high.

Kainos surged as it said revenues for the year ending 31 March 2026 were set to be at the upper end of consensus forecasts, driven by stronger sales in the period.

Domino’s Pizza rallied after it announced a £20m share buyback as it takes advantage of a big plunge in its share price over recent weeks. It also said that full-year expectations remain unchanged, though net debt is now expected to be higher than previously expected.

Genuit reversed earlier losses to trade up after announcing the acquisition of Monodraught - a provider of commercial ventilation solutions in the UK - for £55.6m.

Source: Sharecast

Risk Warnings and Disclaimers

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Adam

Stocks

MARKET WRAPS

Shares rose to start the month with investors facing uncertainty on many fronts--as well as the posibility of a more active stock market--with two potential catalysts in the pipeline for September: new U.S. labor-market data and the Federal Reserve policy meeting.

In a warning sign for the U.S. labor market, unemployment for Black Americans has surged to 7.2% , the highest level since October 2021, when the job market was still recovering from the pandemic.

The dollar fell to a five-week low, and Commerzbank said investors would express relief if courts thwarted Trump's attacks on the Fed.

However it isn't guaranteed that Trump would accept a ruling against him, it added.

Meanwhile, uncertainty over trade remained elevated after an appeals court ruled most of Trump's tariffs were illegal.

Closer to home, European defense stocks climbed after news that the U.K. secured a $13.51 billion deal to supply the Norwway with new warships.

And in the U.K. banking shares recovered some of the losses logged on Friday when talk of possible tax increases spooked investors, and London-listed gold miners rose after the market price of gold reached a four-month high.

U.S. Markets:

Markets are closed Monday.

Forex:

AllianceBernstein maintained its overweight position in the euro , despite being underweight in French sovereign debt, given the risks from the upcoming confidence vote.

The dollar fell to a 5-week low against a basket of currencies as investors turn cautious ahead of key jobs data.

Investors will be keenly watching whether rising Fed rate-cut pricing is validated by U.S. nonfarm payrolls data on Friday, Deutsche Bank said.

Other labor market data this week include the job openings and labor turnover survey Wednesday and ADP's private payrolls report Thursday.

Sterling's recent recovery was unlikely to last due to seasonal headwinds and fiscal uncertainty, Convera said.

September is a historically weak month for sterling, and third-quarter trends also pointed to sterling weakness.

"Fiscal uncertainty ahead of the autumn budget and the risk that BOE repricing is driven more by sticky inflation than genuine growth momentum could cap sterling's upside."

Bonds:

Although France is currently the focus, other countries also face similar pressures from the fiscal side, J.P.Morgan said.

"For investors, this means that after a decade of fiscal improvement in the European periphery and deteriorating debt dynamics in the core countries, a simple core-periphery distinction is too superficial when it comes to risk assessment."

Selection should be made on a country-by-country basis, considering strategies that provide access to the full range of European government bonds, it added.

While volatility may persist in the coming weeks, AllianceBernstein expected widening of the French government bond yield spread as a buying opportunity.

Bond markets were already pricing in enough premium for France's deficit deteriorating, Goldman Sachs said.

"We also see limited room for spillovers to other sovereign spread markets, or to Bunds--although we do think the risk-reward in Bund swap spread tightening is currently poor."

Despite relative stability at the very front-end of the Treasury curve, rate-cut pricing in 2026 has continued to build alongside a rise in risk premium in long-end Treasurys, Goldman Sachs said.

This has resulted in a steeper yield curve than the fundamental picture would typically justify, and while risks surrounding the future composition of the Fed will likely persist, the busy upcoming data calendar should see the market return its focus to 2025 pricing.

Japan's surging bond yields are a headache for Treasuries .

Commerzbank said, with risk sentiment remaining shaky and tailwinds from the data, Bunds should be better supported and suggested buying dips with 10-year yields above 2.72% .

Portuguese government bond yields edged higher after S&P Global Ratings upgraded the sovereign's credit rating to A+ from A with a stable outlook due to improving debt path.

Energy:

Oil continued to trade in a tight range, as investors weighed prospects of an impending supply surplus against fading hopes for a near-term ceasefire in Ukraine.

"Markets remained concerned about Russian oil flows, with weekly shipments from its ports dropping to a four-week low of 2.72 million barrels a day," ANZ said, citing tanker tracker data.

However, traders are factoring in rising OPEC+ supply that is expected to push the market into surplus later this year, weighing on prices.

China's factory activity rebounded in August, reaching a five-month high, but questions linger about the sustainability of this recovery.

Gas

European natural-gas prices remained below 32 euros a megawatt hour as concerns over supply shortages eased ahead of the heating season.

Storage levels across the EU were more than 77% full, according to industry group Gas Infrastructure Europe, keeping the block on track to hit its 80% target by Nov. 1.

Average LNG imports were 51% above the five-year seasonal norm at the end of August, ANZ said, helping offset reduced Norwegian flows due to seasonal maintenance.

The region benefited from increased availability of LNG after China reduced its shipment purchases amid ample domestic supplies.

Metals:

Gold futures rose to a record on tariff uncertainty and increased expectations of a U.S. rate cut.

The precious metal gained on safe-haven demand as investors weigh uncertainty over the Fed independence, Trump's contested tariffs and the U.S. job data due this week, MUFG said.

Courts haven't yet ruled on Trump's attempt to oust Fed Governor Lisa Cook, an appeals court said Trump's global tariffs were illegal but allowed them to stay in place pending litigation and Friday's job report is also expected to reinforce September rate-cut bets, further supporting non-interest bearing bullion.

Uranium Price

Uranium prices were likely to rise to $100/lb next year , Citi said.

EMEA HEADLINES

Novo Nordisk Says Wegovy Cuts Heart Risk by 57% Compared With Eli Lilly's Obesity Drug

Novo Nordisk said its blockbuster Wegovy weight-loss drug cuts the risk of heart attack, stroke or death by 57% compared with Eli Lilly's Mounjaro and Zepbound.

The Danish pharmaceutical giant said Sunday that the study suggests the heart-protective benefits of semaglutide-the active ingredient in Wegovy-may not be the same for all GLP-1 drugs such as tirzepatide, which is the active ingredient in Lilly's Mounjaro and Zepbound.

CapVest to Acquire Majority Stake in Germany's Stada

CapVest said it agreed to acquire the majority stake in Germany's healthcare and pharmaceuticals company Stada from Bain Capital and Cinven for an undisclosed sum.

The investment firm said Monday that it aims to accelerate the group's development in both its home market and internationally. Following completion of the transaction, Bain Capital and Cinven, which acquired the business in 2017, will retain a minority stake in Stada.

Equinor to Subscribe for Orsted Shares Worth Up to $939 Million in Rights Issue

Equinor pledged to support Orsted's rights issue by subscribing for up to $939 million of new shares.

The Danish wind-farm developer last month announced plans to raise $9.4 billion through a rights issue as it seeks new funds to shore up its balance sheet in response to industry challenges.

GLOBAL NEWS

U.S. Stocks Are Now Pricier Than They Were in the Dot-Com Era

The S&P 500's march to a record high this year hasn't come cheap: By some measures, stocks have never been pricier.

Investors are now paying more than ever for each dollar of revenue the index's members produce. The benchmark traded at 3.23 times sales on Thursday, a record high.

Fed Upheaval Sows New Uncertainty About Path of Rates

Weeks before what is likely to be the Federal Reserve's first interest-rate cut of the year, an unprecedented effort by President Trump to reshape the central bank is scrambling the dynamics on its policy committee.

In an Aug. 22 speech, Fed Chair Jerome Powell opened the door to a rate cut at the Fed's Sept. 16-17 meeting to cushion a weaker labor market. While a quarter-point reduction from the current 4.25% to 4.5% target range still looks all but assured, the breadth of support for that cut among Fed officials, and what comes after, have been thrown into doubt.

China Factory Activity Gauge Signals Rebound in Manufacturing

A private gauge of China's manufacturing activity jumped back into expansionary territory in August, rising to a five-month high, though questions linger over whether the rebound can be sustained.

The RatingDog China general manufacturing purchasing managers index rose to 50.5 last month from 49.5 in July, according to data released Monday by S&P Global. A reading above 50 suggests an expansion in activity, while a reading below that level suggests contraction.

Hundreds Killed in 6.0-Magnitude Earthquake, Afghan Officials Say

A 6.0-magnitude earthquake struck eastern Afghanistan near the Pakistan border late Sunday, leaving more than 600 dead, according to Afghan authorities.

Towns in Kunar province, near the city of Jalalabad, were hit, according to the U.S. Geological Survey.

Israel Says It Has Killed Hamas Spokesman in Gaza City Strike Ahead of Planned Invasion

Israel killed the longtime spokesman for Hamas's armed wing in a Gaza City airstrike, the country's defense minister said Sunday, as the military prepares an offensive on the capital city where it believes other Hamas leaders are sheltering.

Source: morningstar

Risk Warnings and Disclaimers

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Warren Takunda

Central Bank

President Donald Trump’s attempt to fire a member of the Federal Reserve’s governing board has raised alarms among economists and legal experts who see it as the biggest threat to the central bank’s independence in decades.

The consequences could impact most Americans’ everyday lives: Economists worry that if Trump gets what he wants — a loyal Fed that sharply cuts short-term interest rates — the result would likely be higher inflation and, over time, higher borrowing costs for things like mortgages, car loans and business loans.

Trump on Monday sought to fire Lisa Cook, the first Black woman appointed to the Fed’s seven-member governing board. It was the first time in the Fed’s 112-year history that a president has tried to fire a governor.

Trump said he was doing so because of allegations raised by one of his appointees that she has committed mortgage fraud.

Cook has argued in a lawsuit seeking to block her firing that the claims are a pretext for Trump’s true goal: Gaining more control over the Fed. A court may decide next week whether to temporarily block Cook’s firing while the case makes its way through the legal process.

Cook is accused of claiming two homes as primary residences in July 2021, before she joined the board, which could have led to a lower mortgage rate than if one had been classified as a second home or an investment property. She has suggested in her lawsuit that it may have been a clerical error but hasn’t directly responded to the accusations.

Fed independence ‘hangs by a thread’

Trump and members of his administration have made no secret about their desire to exert more control over the Fed. Trump has repeatedly demanded that the central bank cut its key rate to as low as 1.3%, from its current level of 4.3%.

Before trying to fire Cook, Trump repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting the short-term interest rate and threatened to fire him as well.

“We’ll have a majority very shortly, so that’ll be good,” Trump said Tuesday, a reference to the fact that if he is able to replace Cook, his appointees will control the Fed’s board by a 4-3 vote.

“The particular case of Governor Cook is not as important as what this latest move shows about the escalation in the assaults on the Fed,” said Jon Faust, an economist at Johns Hopkins and former adviser to Powell. “In my view, Fed independence really now hangs by a thread.”

Some economists do think the Fed should cut more quickly, though virtually none agree with Trump that it should do so by 3 percentage points. Powell has signaled the Fed is likely to cut by a quarter point in September.

Why economists prefer independent central banks

The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls — which it typically does when the economy falters — the Fed can make borrowing cheaper and encourage more spending, growth, and hiring. When it raises the rate to combat the higher prices that come with inflation, it can weaken the economy and cause job losses.

Most economists have long preferred independent central banks because they can take unpopular steps that elected officials are more likely to avoid. Economic research has shown that nations with independent central banks typically have lower inflation over time.

Elected officials like Trump, however, have much greater incentives to push for lower interest rates, which make it easier for Americans to buy homes and cars and would boost the economy in the short run.

A political Fed could boost inflation

Douglas Elmendorf, an economist at Harvard and former director of the nonpartisan Congressional Budget Office, said that Trump’s demand for the Fed to cut its key rate by 3 percentage points would overstimulate the economy, lifting consumer demand above what the economy can produce and boosting inflation — similar to what happened during the pandemic.

“If the Federal Reserve falls under control of the president, then we’ll end up with higher inflation in this country probably for years to come,” Elmendorf said.

And while the Fed controls a short-term rate, financial markets determine longer-term borrowing costs for mortgages and other loans. And if investors worry that inflation will stay high, they will demand higher yields on government bonds, pushing up borrowing costs across the economy.

In Turkey, for example, President Recep Tayyip Erdogan forced the central bank to keep interest rates low in the early 2020s, even as inflation spiked to 85%. In 2023, Erdogan allowed the central bank more independence, which has helped bring down inflation, but short-term interest rates rose to 50% to fight inflation, and are still 46%.

Other U.S. presidents have badgered the Fed. President Lyndon Johnson harassed then-Fed Chair William McChesney Martin in the mid-1960s to keep rates low as Johnson ramped up government spending on the Vietnam War and antipoverty programs. And Richard Nixon pressured then-Chair Arthur Burns to avoid rate hikes in the run-up to the 1972 election. Both episodes are widely blamed for leading to the stubbornly high inflation of the 1960s and ‘70s.

Trump has also argued that the Fed should lower its rate to make it easier for the federal government to finance its tremendous $37 trillion debt load. Yet that threatens to distract the Fed from its congressional mandates of keeping inflation and unemployment low.

Independence vs accountability

Presidents do have some influence over the Fed through their ability to appoint members of the board, subject to Senate approval. But the Fed was created to be insulated from short-term political pressures. Fed governors are appointed to staggered, 14-year terms to ensure that no single president can appoint too many.

Jane Manners, a law professor at Fordham University, said there is a reason that Congress decided to create independent agencies like the Fed: They preferred “decisions that are made from a kind of objective, neutral vantage point grounded in expertise rather than decisions are that are wholly subject to political pressure.”

Yet some Trump administration officials say they want more democratic accountability at the Fed.

In an interview with USA Today Vice President JD Vance said, “What people who are saying the president has no authority here are effectively saying is that seven economists and lawyers should be able to make an incredibly critical decision for the American people with no democratic input.”

And Stephen Miran, a top White House economic adviser, wrote a paper last year advocating for a restructuring of the Fed, including making it much easier for a president to fire governors.

The “overall goal of this design is delivering the economic benefits” of an independent central bank, Miran wrote, “while maintaining a level of accountability that a democratic society must demand.” Trump has nominated Miran to the Fed’s board to replace Adriana Kugler, who stepped down unexpectedly Aug. 1.

There could be more turmoil ahead

Trump has personally insulted Powell for months, but his administration now appears much more focused on the Fed’s broader structure.

The Fed makes its interest rate decisions through a committee that consists of the seven governors, including Powell, as well as the 12 presidents of regional Fed banks in cities such as New York, Kansas City, and Atlanta. Five of those presidents vote on rates at each meeting. The New York Fed president has a permanent vote, while four others vote on a rotating basis.

While the reserve banks’ boards choose their presidents, the Fed board in Washington can vote to reject them. All 12 presidents will need to be reappointed and approved by the board in February, which could become more contentious if the board votes down one or more of the 12 presidents.

“The nuclear scenario is ... the reappointment of the reserve bank presidents and interfering with that, (which) would be the signal that things are truly going off the rails,” said Adam Posen, president of the Peterson Institute for International Economics.

Source: AP

Risk Warnings and Disclaimers

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Winkelmann

Economic

Commodity

Forex

Key points:

● Election takes places September 7-8

● Tight contest between centre-left and centre-right blocs

● Cost of living and inequality central to campaign

Norway's general election on September 7-8 is expected to be a close race between a centre-left bloc led by the incumbent Labour Party, and a centre-right bloc dominated by the populist Progress Party and centre-right Conservatives.Among the issues that could decide the vote are inequality and taxation, while the outcome could have an impact on energy and power supplies to Europe and the management of Norway's huge sovereign fund.

WHAT'S AT STAKE?

Prime Minister Jonas Gahr Stoere's Labour is looking to extend its rule after returning to power in 2021, following eight years of Conservative-led governments. Labour has led a minority government, supported by the Socialist Left and the rural-based Centre Party.Inequality tops voters' list of concerns, according to an August 7-13 survey by Respons Analyse for daily Aftenposten, replacing defence and national security, which slipped to sixth place since a similar poll in April.Cost of living and pocketbook issues have been central to the campaign, with food price inflation at 5.9% in the last 12 months.

The economy, jobs and taxes are also high priorities for voters, the survey showed.While Labour favours broadly stable taxes, some of its allies seek stiffer rates for the wealthy to finance tax cuts for low-income families and expanded public services.Progress and the Conservatives both advocate large tax cuts.

SOVEREIGN WEALTH FUND

Norway's $2 trillion wealth fund, built on vast oil and gas income, allows governments to spend much more freely than fellow European countries, though the need to control inflation and interest rates are constraining factors.A debate over investments in Israel took centre stage at the beginning of the campaign, sparking an unusually public debate over how the world's largest sovereign fund operates.The Socialist Left last week said it would only support a future Labour government if it divested from all companies involved in what it called "Israel's illegal warfare in Gaza". Labour rejected the demand, but it may be difficult to rebuff such calls after the election.

OIL AND GAS

Norway is Europe's top gas supplier, replacing Gazprom after Russia's 2022 invasion of Ukraine.Its role is set to grow as the European Union plans to phase out use of Russian gas by 2027, but exploiting new oil and gas reserves is critical to slowing down an expected production decline.The election could decide whether Norway opens new areas for exploration, or if oil companies will remain restricted to existing ones, depending on the influence wielded by the Greens, Liberals and other small parties.More radical proposals to stop exploration completely are unlikely to gather sufficient support.

POWER

Norway produces more power than it consumes and exports the surplus to Europe. Still, some left-wing and right-wing parties are campaigning on limiting exports to the continent.If that happened, it would be a problem for Norway's neighbours and Brussels. Norway is not in the EU but is part of the single European market and must respect its rules. Restricting power exports would breach them.

Parties are also divided over how to meet growing domestic demand that is eroding Norway's surplus, with little generation capacity added in recent years.Wind on land, solar and new hydropower are relatively cheap and quick to build, but face local protests over their ecological impact. Offshore wind is controversial due to its high costs.

HOW DOES IT WORK?

Norway has a system of proportional representation whereby 169 lawmakers are elected from 19 geographical districts for a fixed, four-year term.Any party scoring above 4% support nationwide is guaranteed representation, although a strong showing in individual districts can also yield one or more seats.

No party is expected to win the 85 seats required for an outright majority, so continued minority rule under Labour or the formation of a coalition are the likeliest outcomes.Polls show nine parties are expected to win seats. On the left, Labour, the Socialists, the Greens, Centre and the Reds; and on the right, the Conservatives, Progress, the Christian Democrats and the Liberals.If the centre-left wins, Labour's Stoere is expected to remain in office, while a centre-right win could see either Progress Party leader Sylvi Listhaug or Conservative Party head Erna Solberg become prime minister.

RESULTS

The ballot ends on September 8 at 1900 GMT, when the first exit polls are expected.Results could become clear late that evening, though the final outcome may not be known until the following day.The exact combination of parties in the cabinet will depend on post-election negotiations.

Source: TradingView

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Russia-Ukraine Conflict

Ukraine suspects Russian involvement in the murder of former parliamentary speaker Andriy Parubiy, the head of the Ukrainian police said on Monday.Parubiy was shot dead in the western city of Lviv on Saturday and President Volodymyr Zelenskiy said earlier on Monday that a suspect had been arrested for what he called "a horrific murder" that impacted "security in a country at war".

"We know that this crime was not accidental. There is Russian involvement. Everyone will be held accountable before the law," police chief Ivan Vyhivskyi said on Facebook.Russia has not commented on the killing or on the suggestion that it was involved in the incident.Interior Minister Ihor Klymenko said on the Telegram messaging app that the suspected shooter had been detained overnight in the Khmelnytskyi region in western Ukraine.

"Many details cannot be shared at this time," Klymenko said. "I will only say that the crime was carefully planned: the victim’s movements were studied, a route was mapped out, and an escape plan was thought through."Police chief Vyhivskyi said the suspect had disguised himself as a courier and had opened fire on Parubiy in broad daylight, firing his weapon eight times.The shooter even made sure that the victim was dead, Vyhivskyi added.

"He spent a long time preparing, watching, planning, and finally pulling the trigger. It took us only 36 hours to track him down and arrest him," Vyhivskyi added.Police published two photographs from the scene of the arrest that show two special forces officers holding a handcuffed man by the arms. Naked to the waist, he has his back to the camera and his face is not visible.Parubiy, 54, was a member of Ukraine's parliament and had served as parliamentary speaker from April 2016 to August 2019. He was one of the leaders of protests in 2013-14 demanding closer ties with the European Union that led to the ousting of Ukraine's then pro-Russian president, Viktor Yanukovich.

Parubiy was also secretary of Ukraine's National Security and Defence Council from February to August 2014, a period when Russia annexed the Crimea peninsula and Moscow-backed separatists began fighting government forces in eastern Ukraine.