Financial Markets Daily Report
16 July 2025
US headline inflation rose to 2.7% (2.4% in May) and core inflation rose 0.1pp to 2.9%. A detailed breakdown showed prices have begun to rise in some goods categories, suggesting tariffs are beginning to impact. Investors pushed expectations of the first rate cut from September to October, and Treasury yields rose along the curve. The dollar slightly strengthened.
In the euro area, the French Prime Minister presented an ambitious plan to gradually reduce the deficit over the next four years to 2.8% of GDP by 2029. Markets had a limited reaction, and sovereign yields fell only slightly. The French risk premium remained almost unchanged.
Global equity markets had a mixed session amid ongoing trade uncertainty and US inflation data. Euro area stocks ended the session lower, while U.S. tech stocks advanced on news Nvidia will be able to sell its chips to China, pushing the Nasdaq index to a new all-time high.