Today's Update 07-09-2025
Key Points and Metrics
Key Points and Metrics:
Bank of England (BoE) Updates:
Bi-Annual Financial Stability Report and FPC Meeting Minutes were released.
Governor Andrew Bailey's Remarks:
Caution on business investment may affect employment.
Uncertainty is causing delays in investment decisions.
UK borrowers remain resilient, and banks can support them.
Risks and uncertainties are elevated due to geopolitical tensions, global fragmentation, and pressure on sovereign debt markets.
Financial stability is the bedrock for growth.
Financial Policy Committee (FPC) Decisions:
Counter-Cyclical Capital Buffer held at 2%.
Overall cap on mortgage lending at high loan-to-income ratios remains at 15%.
Individual banks can increase the proportion of mortgage lending at high loan-to-income levels.
A refreshed assessment of capital requirements for banks will be provided in the December Financial Stability Report.
German 15-Year Bund Auction Results:
Yield:
Actual: 3.04%
Previous: 2.85%
Bid-to-Cover Ratio:
Actual: 1.5
Previous: 5.8
Global Leaders' Remarks:
JPMorgan CEO Jamie Dimon:
JPMorgan plans more investments in Germany.
German Chancellor Merz:
Optimistic about agreeing on a deal with the USA by the end of the month.
In intensive contact with the US government and EU Commission regarding tariffs.
UAE Energy Minister:
No one is talking about peak oil demand anymore; demand has surpassed predictions.
The world's spare oil capacity is decreasing year on year; some nations can't produce what they did last year or even last month.
Energy Inventory Data (EIA Reports):
Crude Oil Inventories:
Forecast: 1.6 million barrels
Previous: 3.845 million barrels
Gasoline Inventories:
Forecast: 1 million barrels
Previous: 4.188 million barrels
Distillate Inventories:
Forecast: 1.5 million barrels
Previous: 1.710 million barrels
Reserve Bank of New Zealand (RBNZ) Announcements:
Official Cash Rate (OCR) held at 3.25%.
Risks to the global outlook remain elevated.
Domestic economic activity is expected to gradually improve.
Inflation is projected to rise towards the upper end of the 1-3% target range around mid-2025.
The RBNZ anticipates reducing the OCR further if inflation pressures ease.
China's Economic Outlook:
National Development and Reform Commission (NDRC):
Domestic demand remains China's primary growth driver.
Decoupling and containment efforts boost China's resolve for self-reliance.
China's GDP is expected to reach about 140 trillion yuan in 2025.
Upcoming Earnings Estimates for July 15th:
BlackRock (BLK):
Time: 6:00 AM ET
Expected EPS: $10.68
Expected Revenue: $5.38 billion
JPMorgan Chase (JPM):
Time: 6:55 AM ET
Expected EPS: $4.43
Expected Revenue: $44.1 billion
Wells Fargo (WFC):
Time: 7:00 AM ET
Expected EPS: $1.40
Expected Revenue: $20.78 billion
Citigroup (C):
Time: 7:00 AM ET
Expected EPS: $1.65
Expected Revenue: $20.77 billion
Market Overview and Other Notable Points:
Global Markets:
Chinese shares are on track to hit a three-year high amid stimulus hopes.
Global markets remain cautious due to President Trump's tariff threats.
Goldman Sachs Analysis:
U.S. copper imports may rise ahead of the proposed import tariff.
European Union Trade Relations:
The EU doesn't expect to achieve the same access to the U.S. market as British steel, cars, and other products subject to sectoral duties (Financial Times report).
China's Foreign Ministry Statements:
Urges the EU to ease restrictions on high-tech product exports to China.
States that the EU needs to adjust its attitude toward China.
Other Economic Indicators and Events:
U.S. MBA Mortgage Applications:
Previous: 2.7%
U.S. MBA 30-Year Mortgage Rate:
Previous: 6.79%
U.S. Wholesale Inventories MoM Revision:
Forecast: 0.3%
Previous: 0.3%
U.S. Wholesale Sales MoM:
Forecast: 0.2%
Previous: 0.1%
Reserve Bank of Australia (RBA) Forecasts:
Expected to cut the cash rate to 3.60% in August.
Projected to reduce the cash rate to 3.35% by the end of 2025.
South Korea Economic Data:
June household lending increased year-on-year to KRW 1,161.5 trillion.
Bank of Korea Base Rate: 3.50% (Forecast: 2.5%, Previous: 3.50%)
California Legislative Action:
A lawmaker introduced a bill to oversee artificial intelligence firms.
Energy & Commodities
UAE Energy Minister: Dismissed peak oil demand concerns, warned of declining global spare capacity
Copper Futures: Under pressure from Trump's latest tariff announcements
Oil Markets: Focus on EIA inventory data later today
Currency Movements
USD: Edging higher amid global uncertainty
NZD: Steady following RBNZ hold decision
GBP: Supported by BoE stability measures
Final Thoughts
The markets are caught in a delicate balancing act between central bank dovishness and escalating trade tensions. While China's stimulus hopes are driving Asian equities higher, Trump's renewed tariff threats are creating headwinds for global risk assets.
The key inflection point today will be the EIA crude oil data and tonight's FOMC minutes. With oil inventories expected to draw down significantly and the Fed's latest thinking on rate policy under scrutiny, we could see increased volatility across energy and rate-sensitive sectors.
The divergence between Asian optimism and Western caution reflects the market's struggle to price in both stimulus-driven growth and protectionist policies. Traders should watch for any escalation in trade rhetoric, particularly around the EU's response to potential US tariffs, as this could trigger broader risk-off sentiment.
With major bank earnings starting next week, the financial sector will be under the microscope for guidance on credit conditions and loan demand - especially given the BoE's cautious stance on mortgage lending standards today.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry