Slight Firming in Inflation Ahead of FOMC Meeting

Wells Fargo Research Team Wells Fargo

U.S. Review

Slight Firming in Inflation Ahead of FOMC Meeting

After three months of lower-than-expected inflation readings, the CPI came in higher than expectations. Despite inflation’s relatively tepid trend, FOMC members have continued to signal that they are set to announce the start of balance sheet normalization at next week’s meeting.
Hurricane damage is beginning to show up in the monthly data. August retail sales contracted from the previous month, with notable weakness in auto sales.
Industrial production surprised to the downside with manufacturing production contracting 0.3 percent in August.

Global Review

Chinese Economy Cools at Summer’s End

Economic data out of China disappointed across the board this week. Retail sales and industrial production growth both came in below consensus.
In the United Kingdom, the Bank of England’s Monetary Policy Committee voted 7-2 in favor of keeping its policy rate and balance sheet unchanged. The pound and U.K. government bond yields jumped on hawkish language.
The Brazilian economy continued its long climb back from a severe recession. The economic activity index for July topped expectations, rising 0.4 percent over the month in addition to a small upward revision to the previous month.

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Wells Fargo Research Team

Wells Fargo

EUR/USD looks apathetic around 1.1770

EUR/USD comes under renewed pressure on Tuesday, deflating below the 1.1800 support and reversing two consecutive days of gains. The pair’s decline follows the persistent move higher in the US Dollar, as trade uncertainty dominates the sentiment ahead of President Trump’s SOTU speech.

GBP/USD regains 1.3500 and above

GBP/USD extends its advance for the third day in a row on Tuesday, this time retesting the area beyond the 1.3500 hurdle. Cable’s uptick comes despite decent gains in the Greenback and the dovish message from the BoE’s Bailey at the UK Parliament.

Gold appears offered around $5,150

Gold is giving back a good portion of the recent multi-day rally, receding to the $5,150 zone per troy ounce amid the decent bounce in the US Dollar and mixed US Treasuty yields. In the meantime, markets’ attention remain on upcoming comments from Fed speakers.

Crypto Today: Bitcoin, Ethereum, XRP come under renewed pressure amid ETF outflows, tariff uncertainty

Bitcoin, Ethereum and Ripple are trading under increasing selling pressure at the time of writing on Tuesday, as market participants navigate renewed tariff uncertainty. The Crypto King holds above $63,000, down 2% intraday from its $64,656 open.

The Citrini report: How a debatable AI narrative can shake Wall Street

That AI-related headline alone was enough to rattle investors.US stocks slid sharply on Monday after a widely circulated Citrini Research memo outlined a hypothetical “2028 Global Intelligence Crisis”, warning that rapid AI adoption could push US unemployment into double digits as early as by mid-2028.

XRP pressured by weak ETF flows and declining retail interest

Ripple (XRP) is edging lower, trading above its intraday low of $1.32 at the time of writing on Tuesday. The decline from its weekly opening of $1.39 reflects heightened volatility in the broader cryptocurrency market, accentuated by tariff-triggered uncertainty.