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Stocks Drift Ahead of the Fed – Dow Down 0.3%

US stocks drifted lower ahead of today’s key Federal Reserve Bank rate decision, whilst the dollar crashed despite stronger Retail Sales data. The Dow finished down 0.27% at 45,757, the S&P lost 0.13% to 6,606, and the Nasdaq fell just 0.07% to 22,333. Treasury yields pulled further back on the day despite a rally on the data, the 2-year down 3.4 basis points to 3.503% and the 10-year down 1 basis point to 4.028%. The dollar took a hit, with the DXY losing 0.66% on the day to close at 96.66. Oil prices continued to move higher as traders priced in a weaker dollar and increased geopolitical issues, with Brent up 1.56% to $68.49 and WTI up 1.99% to $64.57 a barrel, whilst gold again hit a fresh high just above $3,700, eventually settling up 0.29% at $3,689.98 on the close.

Dollar Looking Vulnerable into the Fed Meeting

The US dollar took a big hit in trading yesterday as FX traders looked to cover the possibility of an outsize cut at the conclusion of today’s Fed meeting, or a more dovish outlook from the FOMC. The dollar index is now sitting just 30 points above the annual low after some key breaks in major currencies yesterday ahead of today’s Fed announcement. The key mover was the euro, which broke higher to hit a 4-year high against the dollar, but support also broke in the USDJPY, which added to the index’s woes. FX traders are now bracing for a lively few days ahead with currencies guaranteed to move. The chance of a 50-basis point cut is now sitting around 10%, but this would certainly see the dollar crash lower to fresh ranges. However, the likelihood is that we see a 25-basis point cut, and moves will come from the forward guidance that we receive from the FOMC. A more dovish outlook will see the dollar move further south, whilst if they remain more cautious, then we could see a sharp correction of recent moves and the dollar push back into recent ranges.

Fed in Focus Today

It is a busy day on the macroeconomic calendar today, with the major event being the Federal Reserve rate decision towards the end of the day. However, there are some other major events scheduled, and although not expected to have as much of an impact as the FOMC, they could see strong moves in local markets. There is little scheduled in the Asian session, but we do have big data due out of the UK soon after the European open. The latest inflation number is due out, with the year-on-year CPI number expected to come in at 3.8%, still well above where the MPC would like to see it. The New York open will see the initial focus north of the border for the Bank of Canada interest rate decision, where they are expected to cut rates by a further 25 basis points. This is followed by the US Crude Oil Inventory data. However, the main event will come towards the end of the session when we at last have the long-awaited cut from the Fed.

The post General Market Analysis – 17/09/25 first appeared on IC Markets | Official Blog.

FX traders are preparing for more moves in the market later today when the Federal Reserve Bank delivers its long-awaited rate decision. This meeting has been touted as the next cut in the current cycle for the last few months, and the market is pricing in a 90% chance that we get a 25-basis-point cut, with the other 10% on an outsize 50-basis-point cut. The dollar broke lower in trading yesterday and now sits at vulnerable levels against several major currencies, and traders are expecting big moves in the market whatever the outcome later today.

The likelihood is that we see a 25-basis-point cut, and moves will come from the forward guidance that we receive from the FOMC, with a more dovish outlook leading to more downside for the greenback, while a more conservative outlook – which the FOMC has been favouring for much of the year – would lead to some good relief rallies for the dollar in the majors.

USDJPY is now sitting just above the long-term support line on the daily charts, with a dovish outcome or even the 50-point cut likely leading to a break lower, while a ‘hawkish cut’ would allow traders to leverage off that support level to buy the pair for a move back into the recent range.

Resistance 2: 149.02 – Trendline Resistance
Resistance 1: 150.91 – August High

Support 1: 145.75 – Trendline Support
Support 2: 143.40 – Longer-Term Trendline Support

The post Trade USDJPY on the FOMC Interest Rate Decision first appeared on IC Markets | Official Blog.

The Eurozone CPI report will be the final estimate for August, with the preliminary one seen here. Given that this is the final estimate, it typically isn’t a market mover. That especially since the numbers are likely to reaffirm the ECB’s stance of keeping policy steady at the moment. Core annual inflation was estimated at 2.3% in the preliminary report with services inflation remaining sticky at 3.1%.

As such, the more interesting release today will be the UK CPI report for August at 0600 GMT.

The estimate for for headline annual inflation to come in at 3.8% – similar to July. Meanwhile, core annual inflation is estimated to ease slightly to 3.6% – down from 3.8% in July.

Analysts are mostly projecting that food price inflation in the UK is going to keep creeping higher for now, set to peak in September. That is likely to keep the headline estimate elevated. However, services inflation is expected to gradually decline with most calls arguing for a deceleration in prices for travel services. That is largely due to a surge in airfares in July, which saw a later index date.

Still, the calls are relatively mixed going into the report later. On the lower end, BofA and Morgan Stanley sees core annual inflation in the UK printing at 3.5% in August. Meanwhile, ING and UBS have that at 3.7% while HSBC sees headline annual inflation hitting 4.0%. And then we have Barclays, Nomura, and Deutsche all calling for a 3.6% estimate on core annual inflation.

But whatever the case is, the report today will not likely do much to change up the BOE outlook for the Thursday decision.

This article was written by Justin Low at investinglive.com.

Markets tread water ahead of Fed decision; yen steady, yuan dips to 10-month low.

• Is Nvidia a Buy with the FOMC? One Simple Chart Tells the Story
• China’s golden week travel bookings surge, rail to handle 219m trips, boosting spending
• Japan pension giant GPIF starts domestic alternative investing with ¥50bn allocation
• ICYMI China services boost plan, opening key sectors & funding sports, culture, healthcare
• Recap: Japan’s exports fall for 4th month, US tariffs hit autos and chip equipment hardest
• China’s rare-earth export curbs hit European firms, EUR millions lost, shortages looming
• PBOC sets USD/ CNY mid-point today at 7.1013 (vs. estimate at 7.1021)
• Japan trade data August 2025: Exports -0.1% y/y (exp -1.9%), Imports -5.2% y/y (exp -7.5%)
• Australia’s Westpac Leading Index slips back below trend
• Singapore’s non oil exports slumped in August, very disappointing miss on estimates
• BofA sees $4,000 gold by 2026 but warns Fed risks could spark near-term pullback
• SocGen warns stocks could unwind if Fed proves less dovish than markets expect
• Fed preview: Most banks expect 25 bp cut, some 50 bp bigger easing, bigger impact, move
• New Zealand data: Q2 Current Account deficit is lower than expected
• Ex-Fed President Mester says here’s what’s making the FOMC rate cut decision so difficult
• Morgan Stanley CIO pushes 60/20/20 portfolio, says gold now stronger hedge than Treasuries
• New Zealand data: Westpac Consumer Confidence (Q3 2025) 90.9 (vs. prior 91.2)
• BofA survey: Fund managers keep crypto allocations near zero despite market growth
• Private survey of oil inventories shows a larger than expected headline crude oil draw
• investingLive Americas FX news wrap 16 Sep: US retail sales climb ahead of FOMC decision

It was another subdued session as investors sat tight ahead of the Federal Reserve’s FOMC decision and Chair Powell’s press conference. Markets broadly expect a 25bp cut, though there’s concern the Fed may signal a less dovish path than currently priced.

Local news was light. Japan’s exports fell again in August, but the contraction was smaller than expected thanks to a rebound in shipments to Asia. Still, overall exports remained negative for a fourth consecutive month.

FX was rangebound across the majors. USD/CNY slipped to a fresh 10-month low after Tuesday’s sharp U.S. dollar drop, with the PBOC offering little resistance — setting the daily fix with almost no damping.

Asia-Pac
stocks:

Japan
(Nikkei 225) +0.2%

Hong
Kong (Hang Seng) +1.35%

Shanghai
Composite +0.38%

Australia
(S&P/ASX 200) -0.75%

This article was written by Eamonn Sheridan at investinglive.com.

China is bracing for a bumper “golden week” holiday travel rush that could deliver a welcome lift to consumer spending. Early data from travel operators points to strong demand for domestic and international trips during the eight-day holiday starting October 1, which combines the Mid-Autumn Festival and National Day.

Railways are forecast to carry 219 million passengers between September 29 and October 10, well above the 177 million handled over 10 days last year, when a record 21.4 million traveled on October 1 alone. Airlines and online platforms also report robust demand: searches for domestic flights were up 30% year-on-year in early September, while bookings for flights, trains, and car rentals have all climbed. Car rental bookings for multi-destination trips surged 93% from last year, according to Fliggy.

This article was written by Eamonn Sheridan at investinglive.com.

Japan’s Government Pension Investment Fund (GPIF), the world’s largest retirement fund, has begun selecting domestic alternative asset funds on its own for the first time, shifting away from relying on external asset managers. The fund will allocate ¥50 billion ($340 million) — with ¥40 billion earmarked for infrastructure such as data centers and ¥10 billion for real estate — according to recently published documents.

While small compared with GPIF’s ¥260 trillion in total assets, the move gives the fund greater oversight of its portfolio and marks a step toward diversifying into higher-yielding assets less tied to stock and bond market swings. Alternatives carry risks such as low liquidity and exposure to property and infrastructure cycles, but they are increasingly popular among global peers. GPIF still caps alternatives at 5% of its portfolio, though current exposure is only 1.6%.

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GPIF’s direct entry into Japanese alternative funds highlights growing demand for yield in real assets. While the sums are small relative to its size, the move could provide a lift to domestic infrastructure and property markets, while signaling that Japan’s institutional investors are catching up with global peers on alternative allocations.

This article was written by Eamonn Sheridan at investinglive.com.

On Tuesday China announced a broad set of measures to boost services consumption as it grapples with slowing economic momentum. The plan, issued by nine agencies including the commerce and finance ministries and the central bank, pledges to further open sectors such as internet, culture, telecommunications, medical care, and education. Authorities aim to attract more foreign and private investment, particularly in mid- to high-end healthcare, leisure, and tourism.

The measures also emphasize developing the sports economy through international events, mass activities, boutique competitions, and professional leagues. To support these initiatives, Beijing will deploy central government funds and local special bonds for infrastructure projects in cultural, tourism, elderly care, childcare, and sports facilities. Monetary policy tools will encourage banks to expand credit to service-sector businesses.

The rollout comes as factory output and retail sales in August posted their weakest growth since last year. Policymakers are already providing interest subsidies to service industries such as catering and tourism, and 231 billion yuan ($32.5 billion) in special treasury bonds has been allocated to support consumer trade-ins of appliances and electronics. Economists argue that strengthening services consumption is critical as Beijing confronts U.S. tariffs and a broader slowdown.

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China’s push to boost services highlights Beijing’s pivot toward domestic demand as growth stalls. While targeted at culture, healthcare, and tourism, the measures may help stabilize consumption-linked sectors and support equities tied to leisure and healthcare. However, continued weakness in factory output and retail sales suggests overall growth pressures remain, keeping expectations for broader stimulus alive.

This article was written by Eamonn Sheridan at investinglive.com.

Japan’s exports fell for a fourth straight month in August as higher U.S. tariffs weighed heavily on automakers and manufacturers. Exports to the U.S. plunged 13.8% year-on-year, the sharpest drop since early 2021, with automobiles down 28.4% and chipmaking equipment tumbling nearly 39%. Mizuho Research’s Saisuke Sakai noted that while some automakers have absorbed tariff costs by lowering export prices, others are now raising U.S. prices to pass costs onto consumers. He warned that combined with U.S. economic uncertainty, the tariff drag on Japan’s output will intensify into year-end.

Overall exports slipped 0.1% y/y, a milder decline than expected, while imports fell 5.2% on cheaper oil. The narrower trade gap with the U.S. — at its smallest since early 2023 — could not prevent Japan from running a broader ¥242.5 billion ($1.66 billion) deficit. Washington’s July agreement to cut the baseline tariff rate on Japanese goods to 15% from higher threatened levels has provided some relief, but the levy remains multiple times the pre-trade-war norm of 2.5% on autos. Economists now see Japan’s economy contracting this quarter, and BOJ Governor Kazuo Ueda has pledged caution on rate hikes given the external risks.

Data from earlier:

• Japan trade data August 2025: Exports -0.1% y/y (exp -1.9%), Imports -5.2% y/y (exp -7.5%)

Persistent export weakness underscores downside risks for Japan’s economy, reinforcing expectations the BOJ will stay cautious on tightening. U.S. tariffs are already curbing auto and chip equipment shipments, pressuring JPY through weaker trade flows. Continued weakness could weigh on equities tied to autos and exporters, while keeping policy support in play.

This article was written by Eamonn Sheridan at investinglive.com.

The European Chamber of Commerce in China said at least one of its members has lost “millions of euros” due to Beijing’s strict controls on rare-earth exports, which still lack a consistent licensing process. China dominates the global rare-earth supply chain, accounting for nearly 70% of production and close to half of global reserves, giving it significant leverage in trade talks. While some approvals picked up earlier this year, businesses now report growing difficulty in securing export licenses.

Beijing’s tightening measures, including proof that shipments won’t be used for military purposes and single-use licenses, have amplified uncertainty for international companies. The EU depends on China for nearly half of its rare-earth imports, leaving European firms especially exposed. With foreign business confidence already sliding, companies are warning of shortages by Q3, and the ECCC will brief EU policymakers next week as China prepares its next five-year plan.

Info via a CNBC report.

This article was written by Eamonn Sheridan at investinglive.com.

Info comes via analysts at Australia’s Westpac Bank.

• The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, dropped back to -0.16% in August from +0.11% in July.
• First below-trend reading since late 2024.
• Recovery still intact but momentum is proving hard to sustain.
• Nearly all components have contributed to moderation over last six months

Not a positive outlook ahead from this measure. The Reserve Bank of Australia have been reluctant to cut rates quickly due to sticky inflation and a still relatively robust labour market. They do have to contend with some signs the economy is slowing a touch though.

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AUD/USD is a little lower, but thats more to do with US dollar kicking back up a touch. EUR, NZD, GBP, JPY all down too.

This article was written by Eamonn Sheridan at investinglive.com.

This data was out earlier, doing a catch up now.

Exports -0.1% y/y

• expected -1.9%, prior -2.6%

Imports -5.2% y/y

• expected -4.2%, prior -7.4%

Trade Balance -242.5bn yen

• expected -513.6bn, prior -118.4bn

This article was written by Eamonn Sheridan at investinglive.com.

Singapore Non-oil Domestic Exports (NODX) -11.30% y/y in August

• expected +0.1%, prior -4.7%
• -8.9% m/m (prior -6%)
• declines across both electronics and non-electronics shipments
• exports to the U.S., China and Indonesia fell sharply, including a 28.8% drop to the U.S. where Singapore faces a 10% tariff despite its free-trade agreement

The weakness highlights pressure from U.S. trade measures, which are also affecting Singapore indirectly via its partners.

Authorities warn growth will slow in the second half after front-loaded gains earlier this year, though Enterprise Singapore still projects 1%–3% non-oil export growth for 2025.

This article was written by Eamonn Sheridan at investinglive.com.