Fed cut hopes lift markets, but risks linger:

                                                              Source: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.40% on 12 September 2025.  

Macro Update: Britain’s economy stalled in July, with GDP flat as a 1.3% drop in manufacturing, led by electronics and pharmaceuticals, offset a slight 0.1% rise in services, signaling a restrained outlook for H2 2025 amid inflation and rising job losses. Political turbulence deepened as Ambassador Peter Mandelson was dismissed over ties with Jeffrey Epstein, adding to PM Keir Starmer’s challenges ahead of Trump’s state visit. Globally, high debt and weak growth continue to test governments’ anti-inflation commitments, while OpenAI and Nvidia plan billions in UK data center investment, underscoring AI-driven infrastructure demand. Meanwhile, London stocks advanced, with the FTSE 100 up 0.8%, led by aerospace, defence, and banking gains, supported by U.S. inflation data and expectations of a Fed rate cut next week. 

Top Market Movers: Among top gainers on FTSE 100 index, Glencore PLC (LSE: GLEN) witnessed a rise of 3.27% followed by Beazley PLC (LSE: BEZ) which gained around 3.21%. 

Commodity Update: The dollar weakened on Friday as higher U.S. jobless claims and a slight rise in inflation reinforced expectations of Federal Reserve rate cuts. Gold gained 0.23% to $3,685.85, silver climbed 0.87% to $42.51, and copper edged up 0.16% to $10,080.20. Brent crude slipped 0.50% to $66.03, pressured by weak demand and ample supply, though supported by geopolitical tensions in Russia-Ukraine and the Middle East, alongside potential U.S. sanctions on Moscow. 

Our Stance: Wall Street’s record highs were tinged with caution as rising inflation in August—its strongest in seven months—and increasing jobless claims (nearly a four-year high) sharpened expectations that the Federal Reserve may cut interest rates next week. Meanwhile, the administration pushed for the removal of Fed Governor Lisa Cook ahead of the policy meeting, raising concerns about the central bank’s independence. Across the pond, Europe’s stock markets gained modestly, fueled by rate-cut hopes and defense sector strength amid geopolitical tensions. Asian markets followed suit, buoyed by U.S. easing expectations and AI optimism, while the dollar remained pressured amid mixed inflation and labor data. 

FTSE 100 

Source - EODHD/Others