As we step into the first trading day of September, markets are kicking off the month with a mix of caution and anticipation. With summer behind us, investors are shifting their focus to key economic data releases and potential market-moving events that could set the tone for the weeks ahead.

KEY INDICATORS

Labour Day observance

• US financial markets were closed today in observance of Labour Day, resulting in a quiet day for trading.
• However, global markets remained active, with investors around the world reacting to recent economic developments and positioning themselves for the return of US markets tomorrow.

Global markets react to economic data

• Even with the US markets closed, global markets provided some direction. In Europe, stocks edged higher on the back of stronger-than-expected manufacturing data, which suggested that the region’s economic slowdown might not be as severe as feared.
• Meanwhile, in Asia, markets were mixed, with Chinese stocks under pressure due to ongoing concerns about the country’s economic health, highlighted by weaker-than-expected trade data.

MARKET MOVERS

EUR/CHF

GBP/USD

EUR/GBP

TODAY’S NEWS HEADLINES

ECB to deliver second rate cut in September

• The European Central Bank meets again later this month, and Goldman Sachs (NYSE:GS) expects the central bank to ease monetary policy once more having started its rate-cutting cycle in June.
• Forward-looking indicators and comments from some ECB officials suggest a small downgrade to near-term growth, which would take 2024 and 2025 growth down -0.1pp each to 0.8% and 1.3%, respectively.

UK manufacturing PMI hits 26-month high in August on rising domestic demand

• The Manufacturing Purchasing Managers’ Index (PMI) stood at 52.5, unchanged from the preliminary estimate and up from 52.1 in July.
• The PMI in the UK remained at 52.5 in August, up from 52.1 in July, marking its highest level in over two years. This indicates a period of recovery for the sector, buoyed by a significant increase in domestic orders.
• This is the highest level in 26 months, primarily driven by strong domestic demand that offset weaknesses in export markets.

Stocks close higher Friday, S&P 500 posts fourth straight winning month

• Stocks rose on Friday, with the Dow Jones Industrial Average posting a fresh record high as investors ended a volatile month on a high note.
• The 30-stock Dow jumped 228.03 points, or 0.55%, to close at 41,563.08.
• The S&P 500 advanced 1.01%, closing at 5,648.40.
• The tech-heavy Nasdaq Composite gained 1.13% to end at 17,713.62.
• The personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, rose 0.2% on a monthly basis in July and 2.5% from a year ago.

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