Financial Markets Daily Report01 septiembre 2025
Investors ended August with a mixed session as markets remained focused primarily on inflation data and monetary policy expectations.
Inflation data in the euro area was somewhat mixed in August: lower in France (from 0.9% to 0.8% YoY) and Italy (from 1.8% to 1.7% YoY), stable in Spain at 2.7% YoY, and higher in Germany by 0.3pp to 2.1% YoY. Sovereign bond yields rose across the euro area while stocks declined. Expectations for the next ECB rate cut remained centered on March 2026.
In the US, personal spending rose 0.5% in July (the strongest increase in four months) while core inflation picked up 0.1pp to 2.9% YoY (as measured by the PCE price index, the Fed’s preferred inflation gauge). Despite the stronger-than-expected spending data, investors still anticipate a September rate cut. Longer-dated Treasury yields edged higher, and stocks fell.
In currency markets, the EUR/USD pair ended close to 1.17, after trading mostly in the 1.16–1.17 range throughout August.