The September interest rate decision is approaching, and non-agricultural reforms hit record-breaking, but the CPI stage is high!

The moderate CPI and PPI inflation reports, along with the surge in initial jobless claims, paved the way for the Fed to cut interest rates by at least 25 basis points in its September meeting. Concerns about the labor market and prices have led to a new low in the U.S. consumer confidence index, with long-term inflation expectations rising for two consecutive months.

U.S. stocks rose and fell on Friday, with the Nasdaq rising under the support of technology stocks, hitting a new closing high; the S&P 500 index broke through the 6,600 point mark for the first time intraday and finally approaching a close close. The three major stock indexes all recorded gains this week, with the S&P 500 hitting its best single-week performance since early August and the fifth week of gains in six weeks; the Nasdaq rose for the second consecutive week; and the Dow rose for the first time in three weeks.

U.S. Treasury bonds suffered a sell-off after a recent rebound due to profit-taking. The 2-year U.S. Treasury yield ended for four weeks and the 10-year U.S. Treasury yield fell below 4% this week, the first time since April this year, but the rebound on Friday erased the intrawealth decline. The dollar hit its biggest weekly decline in more than a month.

Gold rose for the fourth consecutive week, setting a new record high earlier this week and then fell back and consolidation, rising about 1.6% throughout the week. As Israeli air strikes on Qatar and Russian drones enter Polish airspace, the two major geopolitical conflicts have escalated again, and the United States allegedly proposed that the G7 impose extensive sanctions on Russian energy. Crude oil rebounded this week. The US CFTC holding report shows that WTI crude oil bullish sentiment hit a record low.

The next week will be the highly anticipated "super central bank week", and Trump is about to usher in the moment he has been waiting for. The Fed will meet next week to formulate monetary policy, and its decision may set the tone for market performance for the rest of the year. In addition, the Bank of Canada, the Bank of England and the Bank of Japan will also announce interest rate decisions.

Forex Market: The US dollar index did not show a significant trend this week, and the market fluctuated weakly, and was affected by US employment and inflation data in turn. U.S. employment performance was weaker than expected, and PPI fell unexpectedly. Even though CPI hit a stage high, the market still increased expectations for the Fed's interest rate cut. The U.S. dollar index closed down for the second consecutive week, closing at 97.63 on Friday. In terms of non-US currencies, the euro, pound, and Australian dollar all closed up continuously against the US dollar, while the dollar closed down for the first time in three weeks. The ECB kept interest rates unchanged for the second time this week. The risk of the UK housing market and economic slowdown dragged down the performance of the pound. The market still has certain expectations for the Bank of Japan to raise interest rates this year, limiting the further depreciation of the yen.

Gold Market: Spot gold achieved its fourth consecutive weekly rise this week, setting a record high several times during the session, with a high of about $3,674/ounce, breaking the peak of $850/ounce set on January 21, 1980 for the first time (approximately $3,590 based on inflation). Since the beginning of this year, gold prices have risen nearly 40%, with an amount exceeding US$1,000. Spot silver also rose well, up more than 45% so far this year. On Friday, spot gold closed at $3,643.58/oz, and spot silver closed at $42.17/oz.

Crude oil market: International oil prices rose for three consecutive trading days, as Israel launched an attack on Qatar rekindled geopolitical risks in the Middle East, and the EU plans to push forward the 19th round of sanctions on Russia to lock in banks and oil trade, and closed higher this week.

Review of the news of this week

1. Inflation has rebounded but employment is weak. How to choose the Federal Reserve in September?

This week, U.S. Bureau of Labor Statistics data showed that the US August CPI data slightly exceeded expectations, with the overall CPI monthly rate recording 0.4%, the highest since January, higher than market expectations and 0.3% of the previous value; the annual rate recorded 2.9%, in line with market expectations, up from the previous value of 2.7%. The monthly and annual rates of the core CPI are both in line with expectations and remain stable.

The prices of a number of tariff-sensitive xm-forex.commodities have risen significantly, such as clothing, audio and video products, automotive parts, new cars and energy. This shows that Trump's new tariff policy is continuing to affect the U.S. economy.

At the same time, the U.S. job market performance has become increasingly weak, with the number of initial unemployment claims last week rising to its highest level in nearly four years, recording 263,000, far exceeding the market expectations of 235,000. In addition, from April 2024 to March 2025, the number of new non-agricultural jobs was significantly lowered by 911,000, a record-breaking and far exceeding market expectations, indicating that the previous judgment of the labor market was too optimistic.

After the data was released, traders were more determined to be on the Fed's interest rate cut, and fully priced the Fed will cut interest rates three times by the end of 2025. Interest rate futures pricing reflects bets that the Fed will cut interest rates by four consecutive 25 basis points by January next year. CME's "Feder Observation" shows that the FedThe probability of a 50 basis point cut in September rose to 10.9%. The Federal Reserve will announce its latest interest rate decision at 2 a.m. next Thursday.

In addition, the Office of the Inspector General of the U.S. Department of Labor has launched a review of the Bureau of Labor Statistics, focusing on the mechanisms for PPI, CPI data collection and employment data revision. The background of this investigation is that Trump removes his former BLS director and nominates a new director, raising concerns about the politicization of data. Federal Reserve Chairman Powell stressed the importance of data independence, while economists believe that data corrections fall within the normal range of volatility.

2. Fed personnel changes: Cook removal is blocked, Milan is expected to be confirmed, and chairman candidates are increasing. US District Judge JiaCobb ruled on September 9 to temporarily prevent Trump from removing Fed Director Lisa Cook on suspicion of mortgage fraud. Cobb believes that Trump's failure to fire Cook under the "legitimate reason" stipulated in the Federal Reserve Act may violate the law. In addition, Trump fired Cook through social media without giving him a chance to respond, which could violate his constitutional rights.

The U.S. Department of Justice has asked a federal appeals court to intervene and suspend the previously issued injunctions by lower courts. At present, the time of the appeals court's ruling is uncertain. If it is not favored by Trump, the case may be appealed quickly to the Supreme Court.

In addition, the U.S. Senate Banking xm-forex.committee decided to submit the nomination for the Federal Reserve Board of the White House Economic Advisory xm-forex.committee Chairman Stephen Miran to the Senate plenary for deliberation on Wednesday, with 13 votes in favor and 11 votes local time. All Democratic lawmakers on the xm-forex.committee voted against pushing forward the nomination, while all Republican lawmakers voted in favor.

The Senate will vote on Milan's Fed nomination next Monday. If passed, Milan will be eligible for attendance in the next day's Federal Reserve resolution, and the time from the president's announcement of the nomination to the final Senate vote will be shortened to 39 days, far lower than the shortest 60-day record in the past decade.

If Milan succeeds in office, he will join the two Fed directors appointed by Trump during his first term. Both directors (Waller, Bowman) called for a rate cut at the latest meeting of the Federal Reserve and voted against it.

At the selection of the next Fed chairman, Treasury Secretary Bescent held talks with three popular Fed chairman candidates this week, including Lawrence Lindsay, Kevin Wash and James Brad, marking the Trump administration's entry into a critical stage in the selection process for the next Fed chairman.

Although Trump has previously mentioned the candidates include Kevin Hassett, director of the National Economic xm-forex.commission and current director Christopher Waller, the Ministry of Finance has a wider scope of actual investigation. Currently, there are 11 economists on the list, including former and current central bank officials and several market strategists. One to two candidates are expected to be added from them eventually.

3. Israel attacked the top leaders of Hamas, Qatar, and the United States tried to separate ties

September 9, IsraelThe ranks launched an air strike on Doha, the capital of Qatar, with the target directed at the top management of Hamas. The attack killed six people, including five Palestinians, including the son of Khalil Haya, a senior Hamas official, and a Qatari security staffer. Israeli Prime Minister Netanyahu said that the action is carried out independently and is responsible.

Anonymous officials revealed that the operation was planned for several months, with more than ten fighter jets dispatched to drop at least 10 ammunition on the building where the Hamas leaders were located. However, Hamas later announced that the Israeli assassination plot failed.

The attack triggered a strong reaction. Netanyahu said at the event of the U.S. Embassy in Israel that a precise attack on Hamas leadership could pave the way for an end to the Gaza war. But the family groups of Israel's detained people said their hopes were slimmer than before. Qatari Prime Minister and Foreign Minister Mohamed condemned the move as "national terrorism" at a press conference, accusing Netanyahu of ignoring international law and working only to undermine peace for personal gain.

The United States is trying to separate itself from the attack. Trump said on social media that the decision was made by Netanyahu, "it was not the decision I made." According to Israeli media reports, the US asked for an explanation when it discovered that Israeli fighter planes were flying eastward, and reported it to Trump after learning about the attack. He said he immediately asked the Middle East envoy to notify Qatar, but "it was too late."

Qatar said that the US side issued a warning only 10 minutes after the attack. White House Press Secretary Levitt stressed that the United States regards Qatar as a "strong ally and friend" and believes that this move is not conducive to advancing the U.S.-Israel goal, but at the same time admits that eliminating the Hamas leadership is "a worthy goal."

According to foreign media statistics, in addition to Qatar, Israel also launched attacks on Lebanon, Syria, Tunisia, Yemen and Palestine in just 72 hours, causing a large number of casualties and infrastructure damage.

4. NATO shot down Russian drones for the first time, Trump's response caused concern in Europe

On the night of September 9, a large number of drones entered Polish airspace, and NATO fighter jets quickly took off and finally successfully shot down these drones. This is the first coordinated action by NATO allies. Poland and NATO say the drones are from Russia.

The Russian Ministry of Defense issued a notice on the 10th, denied its plan to crack down on targets in Poland and expressed its preparations for consultations with Poland.

Poland requested NATO to initiate Article 4 of the North Atlantic Convention, and NATO countries held emergency consultations on the 10th. Article 4 of NATO provides that when any State Party believes that its territorial integrity, political independence or security is at risk, the State Party shall consult together. This is the 8th time that NATO has launched this clause so far.

U.S. President Trump said on the 11th that the so-called Russian drone entry into Polish airspace may be a "miss". However, Ukrainian President Zelensky posted on social media that day that the Russian drone's crossing Ukrainian and Belarusian airspace into Polish airspace was "deliberate and no accident." Zelensky calls for Europe, includingAllies impose new sanctions on Russia.

The Supreme xm-forex.commander of NATO's European Allied Forces said on the 11th that it has not yet been determined whether the Russian drone entered Polish airspace with intention. He also announced that Germany would send an army to Lithuania to strengthen its deterrence and defense capabilities in NATO's eastern flank.

The Kremlin declined to xm-forex.comment on the incident. Russian President's press secretary Peskov said that the EU and NATO "accord Russia every day for provocation." European leaders have been trying to convince Trump to increase sanctions against Russia and increase aid to Ukraine. They said the incident proved that it was necessary to take collective responses.

5. Changes in the gold market: domestic online tightening, Vietnam's loosening of imports, Switzerland's expansion into the United States

The gold market has seen multiple changes recently, including domestic transaction tightening caused by price new highs, as well as international policy and industrial adjustments.

In China, some Taobao merchants have suspended gold repurchase business because the platform rules and supervision are becoming stricter. The new regulations require precious metal transactions to be submitted for large-scale transaction reports, and the platform's xm-forex.compliance costs and responsibilities have increased accordingly. At the same time, the sharp fluctuations in gold prices and the difficulty of identification have made merchants more cautious. Online business is restricted, but offline recycling remains active.

In Vietnam, the central bank plans to establish an online gold exchange and allow xm-forex.companies to import gold from October, which is the first time in a decade to open to private imports. This move is intended to curb the rapid rise in domestic gold prices and stimulate the economy by releasing private resources. Vice President Fan Guangyong revealed that the central bank is considering two plans: one is to trade gold on the Vietnam Mercantile Exchange, and the other is to conduct transactions within the planned international financial center.

At the same time, Switzerland is also pushing its gold industry to the United States as part of its trade negotiations with the United States. Switzerland plans to build new refineries in the United States or expand processing capacity to reduce trade frictions and balance bilateral flows, people familiar with the matter said. Although the Swiss Ministry of Economic Affairs refused to xm-forex.comment on the confidential talks, Christoph Wild, chairman of the Swiss Precious Metals Association, bluntly stated that if gold continues to expand its trade deficit, the industry must seek solutions, including meeting its market demand in the United States.

It is understood that Swiss Economic Minister Guy Parmelin held "constructive" talks with senior economic officials of Trump's team last week, gold-related plans have been put on the agenda, and negotiations between the two countries are advancing.

The above content is about "[XM Foreign Exchange Decision Analysis]: The September interest rate decision is approaching, and non-agricultural interest rate cuts down, but the CPI stage is high!" is carefully xm-forex.compiled and edited by the XM Foreign Exchange editor. I hope it will be helpful to your transactions! Thanks for the support!

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