Daily Brief – US Rate Cuts

US Rate Cuts

The markets are understandably fixated on the US jobs report which comes out this afternoon given the Federal Reserve’s laser like focus on employment. On Wednesday data reflected that July Job Vacancies fell to a 10 month low. There is now a 100% chance priced in for a September US rate cut and a total of 139bps of cumulative cuts by end 2026.

EUR/USD 1.1645.

Gold

Gold at $3542, having broken through the important $3500 psychological level, prompts some further thinking and analysis: up 38% in 2025, and almost 4% in August alone, gold has shot up on a cocktail of concerns about inflation, central bank buying, renewed US rate cut expectations, concerns about the loss of Federal Reserve independence and geo political worries spurred by Ukraine and the changing world order of China, Russia, and India. Central Bank gold holdings now represent 27% of total Central Bank assets, the highest level for 30 years and at the same time Central bank holdings of US Treasuries at 23% is the lowest level since the Global Financial Crisis. Analysts are becoming more fixated on whether a good part of the recent rally in the gold price is less to do with the cocktail described above and more to do with fears for what the implications are for the USD and the USA diminishing in influence at the heart of the global financial system.

GBP/USD 1.3435.

September 17

For Apple gadget enthusiasts 17/9 cannot come soon enough with the awaited release of the slimmed down iPhone 17 named Air. Only 2mm slimmer and only 1 camera versus 2 with the regular models, and 3 with the Pro, the only worry if users can get over the lesser camera capability is that the reduced size will lead to smaller battery size and less minutes.

EUR/JPY 172.7.

Egg MvMuffin

Real life anecdotes often stretch credibility and that was the case when Zoe Hamburger was appointed Chief Restaurant Officer of McDonalds UK. Just 18 months on McDonalds UK will lose its Hamburger but despite the abattoir corporate politics of the fast food business Zoe is not defecting to Burger King but is flipping her job within the group and is going to need Dutch courage, having been promoted to MD of McDonalds Netherlands. Pass the ketchup.

GBP/EUR 1.1535.

Sunshine Superman

Back in the late 1960’s, Britain’s answer to Bob Dylan was Scotsman Donovan Philip Leitch who is known simply as Donovan and while not exactly Bob Dylan wrote and sang a number of songs in the days when flower people were a thing including this one which scored Donovan a Number 1 this day in 1966.

Sunshine came softly through my a-window today
Could’ve tripped out easy a-but I’ve a-changed my ways
It’ll take time, I know it but in a while
You’re gonna be mine, I know it, we’ll do it in style
‘Cause I made my mind up you’re going to be mine

I’ll tell you right now
Any trick in the book now, baby, all that I can find
Everybody’s hustlin’ just to have a little scene
When I say we’ll be cool I think that you know what I mean
We stood on a beach at sunset, do you remember when?
I know a beach where, baby, a-it never ends
When you’ve made your mind up forever to be mine

Hmm, hmm, hmm, hmm, hmm
I’ll pick up your hand and slowly blow your little mind
‘Cause I made my mind up you’re going to be mine
I’ll tell you right now
Any trick in the book now, baby, all that I can find

Superman or Green Lantern ain’t got a-nothin’ on me
I can make like a turtle and dive for your pearls in the sea, yeah
A you-you-you can just sit there a-thinking on your velvet throne
‘Bout all the rainbows a-you can a-have for your own
When you’ve made your mind up forever to be mine

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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