EMEA Morning Briefing : Stock Futures Higher Amid Fed Cut Bets

MARKET WRAPS

Watch For:

EU industrial production; Germany ZEW indicator of economic sentiment; U.K. unemployment; no major corporate trading updates expected

Opening Call:

European stock futures were slightly higher early Tuesday. Asian benchmarks tracked U.S. indexes higher; the dollar and Treasury yields were little changed; oil futures rose; while gold edged lower.

Equities:

Stock futures rose early Tuesday as investors await the expected start of a rate-cutting campaign by the Federal Reserve.

U.S. stock indexes advanced overnight, driven by broadening support for technology companies and signs of rapprochement in the economic face-off between the U.S. and China.

“Developments in U.S.-China negotiations gave the green light to investors looking for any positive signs going into a week where the Fed almost surely cuts interest rates,” said Dan Ives, an analyst at Wedbush Securities.

“The market continues to power ahead, seemingly oblivious to things that should be of concern, like the slowdown in job growth,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “We’re in ‘don’t-fight-the-Fed’ mode.”

Forex:

GBP/JPY may extend its uptrend, though gains could be capped below 201.00 in the near-term, based on a technical chart, StoneX’s Matt Simpson said. The currency pair’s daily close above the psychologically important 200.00 level on Monday signals potential for further upside.

However, GBP/JPY’s sharp four-session rise could prove to be a “sucker punch” for bulls, unless momentum quickens further, he said.

Bonds:

Traders are looking ahead to the Fed decision–expected to bring the first interest-rate cut of 2025–for signs of where the central bank will move next.

The FOMC may decide they have fallen behind and start to play catch up when it comes to interest rates this week, said Steve Englander, head of global G-10 forex research and North America macro strategy at Standard Chartered.

He expects a 50 basis point “catch-up” cut given recent payrolls softness. Powell is unlikely to be forthcoming on further easing, with the FOMC split on subsequent moves, he added.

Energy:

Oil futures rose early Tuesday, supported by supply-disruption risks. Ukraine has stepped up attacks on Russia’s energy infrastructure, ANZ said. Another drone attack struck Russia’s Kinef refinery, which has an annual processing capacity of over 20 million tons.

“This follows last week’s wave of attacks which Ukraine claimed have struck facilities handling almost half of Russia’s seaborne crude exports,” the bank added.

Metals:

Gold was slightly lower in Asia ahead of the FOMC’s two-day meeting and major U.S. economic data.

Given expectations of a Fed rate cut and continuing geopolitical tensions, gold has settled into a high-level consolidation, Pepperstone’s Dilin Wu said. The FOMC meeting and U.S. retail sales will likely be the key events to monitor, possibly shaping whether the precious metal can resume a directional trend, Wu added.

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Iron ore gained in Asia, with inventory restocking ahead of China’s National Day holiday providing some support, Nanhua Futures said. Recent interest rate cuts are generally positive for commodity prices, it said, adding that it expects iron-ore prices to fluctuate within a narrow range before the holiday.

TODAY’S TOP HEADLINES

Senate Votes to Confirm Trump Pick Stephen Miran to Fed Board

President Trump notched a swift victory Monday night when the Senate confirmed his senior economic adviser to join the Federal Reserve board just hours before officials gather to consider cutting interest rates at a two-day meeting that starts Tuesday.

The Republican-controlled Senate approved Stephen Miran’s confirmation largely along party lines, on a 48-47 vote, just two weeks after receiving his nomination from the White House, making it the second-fastest Fed confirmation in more than a quarter-century. Miran will fill the seat that Adriana Kugler unexpectedly stepped down from last month.

Appeals Court Rejects Trump Request to Remove Fed Governor Lisa Cook

A federal appeals court on Monday night rejected an emergency Trump administration request to remove Federal Reserve Governor Lisa Cook ahead of the central bank’s next meeting.

A divided three-judge panel in Washington, D.C., left in place a lower court injunction that blocked Cook’s termination while she challenges the legality of Trump’s move.

Residents of Eastern Poland Fear Russia’s War in Ukraine Is Coming to Them

WYRYKI, Poland-Moments before the top of her house was ripped off early Wednesday morning, Ala Wesolowska had gone downstairs to make breakfast.

Hearing the crash above her, she raced outside to see a warplane roaring across the dawn sky.

Microsoft Raises Quarterly Dividend by 9.6%

Microsoft’s pattern of increasing its dividend in September continued as the company raised its quarterly payout to 91 cents a share from 83 cents.

The new dividend, equal to $3.64 annually, represents a yield of 0.7% based on Monday’s closing price of $515.36 a share. The stock was recently at $515.43 after hours.

Alphabet’s stock was an AI loser. Now it’s beaten out Nvidia on the year.

Competition among the “Magnificent Seven” names is heating up, and that can be exemplified by a milestone that Alphabet Inc.’s stock achieved on Monday.

Alphabet’s GOOGL GOOG stock rose to become the best-performing “Magnificent Seven” name on a year-to-date basis, with a 33.0% return that surpasses Nvidia Corp.’s NVDA 32.3% gain. It’s an incredible comeback for Alphabet, whose stock was beaten down earlier in the year over concerns that artificial intelligence would erode Google Search and that a then-looming antitrust ruling could force unwelcome business changes. At its lowest point this year, shares of Alphabet had fallen by 24.6%.

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Expected Major Events for Tuesday

06:00/UK: Aug UK monthly unemployment figures

07:00/SVK: Aug CPI

07:00/SVK: Aug Core & net inflation development

07:00/CZE: Aug PPI

08:00/ITA: Aug CPI

08:30/UK: Jun Card Spending statistics

09:00/EU: Jul Industrial Production

09:00/EU: 2Q Labour Cost Index

09:05/GER: Sep ZEW Indicator of Economic Sentiment

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

09-16-25 0017ET