Macro

Deutsche Bank said the UK economy is losing momentum as inflation pressures intensify. Official data show quarterly growth slowed to 0.2% in the second quarter, while August CPI rose to 3.1% and core inflation remained above the Bank of England’s target. Markets are pricing in a 40% chance of a rate cut by early 2025. The bank urged caution on expectations for policy easing.

The Dollar Spot Index rose about 0.2% to around 99.61, near a two-week high, after the July JOLTS report showed U.S. job openings were steady at 7.3 million. The resilient labor data reinforced expectations for a Federal Reserve rate increase, with markets pricing a 74% chance of a hike at the Sept. 17 meeting. The euro slipped to $1.1592 after Eurozone core CPI eased to 2.4%. Fed Chair Kevin Warsh reiterated at Jackson Hole that the central bank remains committed to bringing inflation back to its 2% target.

The latest data show euro zone inflation unexpectedly accelerated, marking its first jump in months and remaining well above the European Central Bank’s 2% target. Analysts at Commerzbank said the figures strengthen the case for the ECB to keep raising interest rates. The inflation surprise also adds to the complexity of the central bank’s effort to bring price growth back under control.

The Bank of Israel announced an interest-rate cut on Monday, marking the third consecutive meeting in which it has lowered rates. The move follows pressure from exporters, who say the shekel’s continued appreciation is hurting export competitiveness. The central bank is further easing policy in an effort to curb the currency’s strength.

The U.S. 10-year Treasury yield climbed to 4.784%, the highest level since January 2025, while the 30-year yield reached 5.271%. The move came as a global government bond selloff gathered pace amid a widening conflict in the Middle East, after new U.S. strikes on Iranian targets and an oil tanker was hit in the Strait of Hormuz. Brent crude rose past $91 a barrel, reviving inflation concerns ahead of the conclusion of the G20 finance ministers’ meeting in Asheville, according to CNBC.

Euro zone inflation accelerated to 3.3% in August, the highest reading since September 2024, as energy prices surged 14.3% year on year amid the Iran conflict and shipping disruption in the Strait of Hormuz. Core inflation eased to 2.4% and services inflation cooled to 3.0%. Markets have priced a 98.9% chance of a 25-basis-point European Central Bank rate increase at its Sept. 10 meeting.

A memecoin called BONER drove heavy weekend speculation that inadvertently absorbed about 81% of the tokenized stock supply of Hims & Hers Health (HIMS) traded on Robinhood, pushing the tokenized HIMS price above $120 even as the stock closed around $30. Major cryptocurrencies were relatively calm, with BTC and ETH ETFs posting $1.75 billion in net inflows for the week. Markets were also digesting remarks by the Fed chair at Jackson Hole that were perceived as hawkish.

The UK 10-year gilt yield rose to 5.223%, the highest level since June 2008. Brent crude climbed to $91.69 a barrel, adding to inflation expectations. Japan’s 10-year government bond yield touched 3% for the first time since 1996, while Germany’s 10-year yield rose to 3.34%, a 15-year high. Germany’s August inflation ticked up to 2.9%, with energy prices up 10.5% year on year.

Bitcoin briefly rose above $81,000 last week before pulling back, but it continued to defend the key $77,100 support level. Bitfinex said the move came even as Fed Governor Kevin Warsh’s hawkish Jackson Hole remarks lifted expectations for future rate hikes and weighed on risk assets. U.S. spot Bitcoin ETFs still saw approximately $1 billion in net inflows over the week, pointing to steady institutional demand. Markets see the ability to hold support as a sign of stronger holding appetite, though further rate-hike expectations could cap gains.

Bitfinex said Bitcoin held above $77,100 even after Federal Reserve Chair Warsh delivered hawkish remarks at Jackson Hole that lifted the probability of a September rate hike to 57%. U.S. spot Bitcoin ETFs recorded net inflows of nearly $1 billion last week, while Ethereum investment products posted 10 straight days of net inflows totaling $815.7 million. On the macro front, U.S. PCE inflation rose to 3.7% and annualized private demand growth in the second quarter was 4.2%, alongside a widening deficit of $1.8 trillion. Bitfinex said ETF activity and stablecoin liquidity continue to support prices, but rate-hike expectations are capping upside.