MARKET WRAPS

Watch For:

Germany CPI; U.K. trade, industrial output, GDP monthly estimate; Italy labour cost index; no major corporate trading updates expected

Opening Call:

European stock futures traded slightly higher early Friday. Asian stock benchmarks rose; the dollar inched higher; Treasury yields were flat; while oil futures fell and gold edged higher.

Equities:

European stock futures were up after U.S. stocks extended record highs, with the Dow topping 46000 for the first time. The final inflation report and jobs data before next week's Federal Reserve meeting all but locked in an interest-rate cut.

Even as labor-market data has suggested an economic slowdown in recent months, investors have instead focused on the prospects of reduced borrowing costs and continued artificial-intelligence mania.

"Heads, we get an AI boom," said Michael Antonelli, managing director of Baird Private Wealth Management. "Tails, we get rate cuts and a borrowing boom."

Forex:

The dollar inched higher in Asian trading. However, it could soften, as the Fed is comfortably on course to resume its rate cuts, said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Securities.

The Fed is in a sweet spot for a 25-basis-point trim next week, as CPI data quelled worst-case inflation risks, he said. The prospects and pace for further rate cuts will hinge on inflation being sufficiently tame, he said, adding that this in turn will backstop the dollar.

Bonds:

Treasurys were flat, after yields on the benchmark 10-year note briefly slipped below 4% Thursday-a level last seen intraday in early April, when President Trump's "liberation day" tariff announcement sent investors into a recession panic and into the arms of safe-haven assets.

"One thing people want to hear from the Fed at this meeting [next week] is some confidence that the economy is not going into a recession," said Bob Savage, head of markets macro strategy at BNY.

Energy:

Oil prices fell, fueled by mounting evidence of softening demand in the U.S. The country's crude inventories unexpectedly rose by 3.9 million barrels last week, signaling weaker-than-expected summer demand and contributing to oversupply concerns, said Daniel Takieddine of Sky Links Capital Group.

"Traders are currently balancing concerns of weak demand and a supply glut against heightened geopolitical tensions," he said.

Metals:

Gold edged higher in Asian trade, as traders digested recent U.S. data. Consumer prices rose in line with expectations, but separate figures showed that initial jobless claims jumped to their highest level in almost four years, ANZ Research analysts said.

The precious metal's short-term outlook remains bullish, they said. Investor appetite is expected to remain high, driven by factors such as rising geopolitical tensions.

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Nickel climbed amid supply concerns. Indonesia's forestry task force has taken over more than 148 hectares of a mine owned by Weda Bay Nickel due to violations of its forestry permit, ANZ Research analysts said in a note. While joint owner Eramet sees no impact on nickel mining operations at this stage, the analysts note that the seizure is Indonesia's first since President Prabowo Subianto pledged to crack down on illegal mining.

TODAY'S TOP HEADLINES

Firm Inflation, Soft Jobs Data Pull Fed in Opposing Directions

Inflation firmed last month, with price increases picking up for goods such as cars and clothes and essentials like food and housing.

Consumer prices were up 2.9% in August from a year earlier, the Labor Department said Thursday, returning to the highest level since the start of the year. That was up from 2.7% in July and a recent low of 2.3% in April, but in line with expectations from forecasters, who have expected businesses to steadily pass along higher costs from tariffs on imported goods and materials.

Trump Pushes to Remove Fed's Lisa Cook Before Next Policy Meeting

The Trump administration is racing to sideline Federal Reserve governor Lisa Cook before next week's policy meeting, asking a federal appeals court to pause a lower-court order that restored her to the central bank's board.

In an emergency motion filed late Thursday, Justice Department lawyers urged the U.S. Court of Appeals for the D.C. Circuit to issue a stay by Monday, just one day before the Federal Open Market Committee meets to decide on a widely expected quarter-point rate cut.

Commerce's Lutnick Says Trade Deal With India Likely, Offers TikTok Update

Commerce Secretary Howard Lutnick in an interview on CNBC on Thursday said the U.S. would sort out a trade deal with India despite already imposing steep levies and a penalty for buying oil from Russia.

The U.S. has hit India, a key strategic partner, with some of the highest tariffs-50%, which includes the 25% penalty for its purchases of Russian oil. While China is a bigger purchaser of Russian oil, the U.S. hasn't yet hit China with a similar penalty.

Russian Drone Incursion in Poland Tests NATO Defenses, Cohesion

The incursion of Russian drones into Poland marked a dangerous new phase in Moscow's confrontation with the West, posing a test for NATO allies and forcing them to divert more capabilities to the bloc's eastern flank.

In recent months, Russia has increasingly put historical rival Poland in its crosshairs. More Russian drones have violated Polish airspace, and an air assault on Ukraine in July damaged Warsaw's diplomatic mission in Kyiv.

OpenAI's Funding Challenges Loom Over Oracle, Broadcom Deal Spree

OpenAI in the past nine months has committed to spend around $60 billion a year for computing from Oracle, shell out $18 billion on a data-center venture, build a new mass-market AI-hardware device and purchase $10 billion of customized chips.

The biggest unknown for the world's most valuable startup: how it will pay for such outsize ambitions.

Microsoft, OpenAI Truce Clears Hurdle in Path to For-Profit Conversion

Microsoft and OpenAI said they have reached a deal to extend their partnership, an apparent detente that could ease the startup's path toward changing its structure to include a for-profit corporation.

The agreement, which has yet to be completed, comes after tensions boiled over between the companies. Microsoft was one of OpenAI's earliest partners and is among its largest investors, integrating the company's technology into many of its products. But it also has a stranglehold over the startup, given that Microsoft is OpenAI's exclusive cloud provider and has access to its latest technology.

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Expected Major Events for Friday

06:00/GER: Aug CPI

06:00/UK: Jul Index of production

06:00/UK: Jul UK trade

06:00/UK: Jul Index of services

06:00/UK: Jul Monthly GDP estimates

06:30/HUN: Jul Construction

06:45/FRA: Aug CPI

07:00/TUR: Jul Balance of Payments

07:00/SPN: Aug CPI

07:00/SVK: Jul Employment and average monthly wage in selected branches

07:00/SVK: Jul Turnover in selected branches of economy, incl Industry & Construction

08:00/BUL: Jul Trade with third countries - preliminary data

08:00/BUL: Jun Trade with EU Member States - preliminary data

08:00/ITA: 2Q Labour Cost Index

08:00/CZE: 2Q Quarterly Balance of Payments

08:00/CZE: Jul Monthly Balance of Payments

08:30/UK: Aug Bank of England/Ipsos Inflation Attitudes Survey

11:30/UK: Aug NIESR Monthly GDP Tracker

12:00/POL: Jul Balance of Payments

16:59/SPN: Jul Budget deficit

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(END) Dow Jones Newswires

September 12, 2025 00:07 ET (04:07 GMT)

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