Markets Today: Gold Hits Fresh-Highs, UK Wage Growth Slows, US Dollar Slips, FTSE 100 Hovers at Support

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Asia Market Wrap - Nikkei, Topix Hit Fresh Highs

Global stocks are at an all-time high, and gold prices have reached a new record. This is happening as markets ramp up rate cut bets ahead of the FOMC meeting on Wednesday.

The MSCI All Country World Index, a measure of global stocks, has risen for 10 straight days—its longest winning streak in over four years.

On the Japanese stock market, the two main indexes, the Nikkei 225 and the Topix, both reached all-time highs.

Meanwhile, in Hong Kong, the Hang Seng Index saw a small gain of 0.08%. In mainland China, the CSI 300 index, which tracks top companies, experienced a slight decline of 0.38%.

In two separate events that largely went unnoticed by the markets, the U.S. Senate narrowly confirmed Stephen Miran to the Federal Reserve's Board of Governors, while a U.S. appeals court ruled that President Donald Trump could not fire Fed Governor Lisa Cook.

Looking at the market reaction, it appears as though these developments were considered unlikely to change the outcome of the Fed's decision on Wednesday, as a 25-basis-point interest rate cut is already fully anticipated by investors.

UK Wage Growth Slows

From May to July 2025, regular pay for workers in the UK, not including bonuses, increased by 4.8% compared to the year before. This marks the slowest rate of growth since May 2022 and was exactly what market experts had predicted. The slowdown was seen in both the public and private sectors.

Looking at different industries, the fastest pay raises were in wholesale, retail, hotels, and restaurants, with a 6.4% increase. Other sectors saw more modest gains, including services (4.9%), manufacturing (4.5%), construction (3.9%), and finance and business services (3%). When adjusting for inflation, the real value of wages only went up by 0.7%, indicating that while people are earning more money, their purchasing power has seen a much smaller increase.

Source: ING Think

The cooling job market is helping lower wage pressures which will be welcome by the Bank of England. This could aid the Bank of England in delivering another rate cut this year. Thursday may be unlikely, but another cut in Q4 remains a possibility.

Tomorrow's inflation data may prove to be more important as the service inflation conundrum persists for the BoE. A softer print could lead to increased expectations of a rate cut in Q4.

European Open - Stocks Retreat, Ferrari Up 2.6%

European stocks saw a slight decline on Tuesday, primarily due to a drop in the banking and insurance sectors, which are often sensitive to interest rate changes.

The pan-European STOXX 600 index fell by 0.15%, with both banking and insurance stocks losing approximately 1%.

Several companies experienced notable individual stock movements. For example, shares in elevator maker Schindler dropped 1.7% after a major investor sold off a large block of shares at a discounted price. Meanwhile, French cosmetics giant L'Oreal saw its stock price fall by 2% following a downgrade from the financial firm Jefferies.

In contrast, luxury car maker Ferrari had a good day, with its shares climbing 2.6% after the firm Berenberg recommended buying the stock, citing the company's strong brand, pricing power, and consistent returns.

On the FX front, the U.S. dollar fell on Tuesday. It hit its lowest point in two and a half months against the euro and a ten-month low against the Australian dollar.

The dollar also weakened to a more than two-month low against the British pound, following renewed calls from US President Donald Trump for the Federal Reserve to aggressively lower interest rates.

The US dollar index, which measures the dollar's value against other major currencies, dropped to its lowest level since July 24. As the dollar weakened, other currencies rose. The euro gained against the dollar ahead of the release of some key economic data from Germany and Italy.

The British pound also strengthened, reaching its highest level against the dollar since early July, with new employment data expected and the Bank of England's policy meeting coming later in the week.

The Australian dollar reached its strongest level since last November, supported by positive stock market performance in Asia.

Finally, the dollar also slipped against the Japanese yen ahead of a Bank of Japan meeting on Friday, where a rate hike is not expected.

Currency Power Balance

Source: OANDA Labs

Oil prices rose slightly on Tuesday, continuing the gains from the previous day. This increase was due to two main factors: concerns about a potential disruption in oil supply from Russia following Ukrainian drone attacks on its refineries, and the upcoming interest rate decision from the US central bank.

Brent crude, a key international oil benchmark, saw a small rise of 8 cents to $67.52 per barrel. Similarly, U.S. West Texas Intermediate (WTI) crude also inched up by 11 cents to $63.41 per barrel.

For more information on Oil, please read WTI Oil Rallies 1% After Ukrainian Attacks on Russian Oil Facilities, Russia Sanction Calls Grow

Gold prices reached a new all-time high on Tuesday. The price of gold was boosted by a weaker US dollar and the expectation that the Federal Reserve will lower interest rates at its meeting this week.

Spot gold's price went up by 0.2% to $3,685.02 per ounce, after earlier hitting a record of $3,689.27. Meanwhile, US gold futures for December also saw a small increase, rising 0.1% to $3,722.70.

For more information on Gold, read Gold (XAU/USD) Technical: Eyeing a new all-time high above US$3,675, supported by positive flows and positioning

Economic Data Releases and Final Thoughts

Looking at the economic calendar, the European session will be a bit busy with German ZEW economic sentiment and Eurozone industrial production numbers due.

Thereafter, markets will focus on Canadian CPI, US retail sales, US import prices and API oil inventories data.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - FTSE 100 Index

From a technical standpoint, the FTSE has returned to the top of the range it broke last week.

Bulls remain in control as long as the FTSE remains above the swing low at 9242 which lines up with the 100-day MA.

Looking at price action and this morning price came within a whisker of the 100-day MA before bouncing.

Immediate resistance now rests at 9280 before the 9300 and 9340 handles come into focus.

Looking at support on the downside, immediate support rests at 9243 (100-day MA) before the 9223 and 9198 handles come into focus.

Source: TradingView.com (click to enlarge)

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