China Boosts Gold Reserves by 650,000 Ounces as Prices Rally 
Iran Threatens Gulf Energy Assets as U.S. Tensions Escalate 
Oil Prices Rally as Brent Nears $100 on U.S.-Iran Escalation 
Norway Core Inflation Rises to 3% in August 
Asian Currencies Steady as Yen Holds Firm, Oil Tops $100 
China Inflation Accelerates in August as CPI, PPI Rise 
Oil Prices Hold Near Highs as U.S.-Iran Conflict Escalates 
Canada Retaliatory Tariffs on U.S. Goods Take Effect 
UK Food Inflation Forecast to Hit 6.4% by Mid-2027 
German Inflation Accelerates to 2.9% in August 
China Exports Surge 25% in August as Trade Surplus Hits $119 Billion 
Gold Prices Rise as Yen Rally Weakens Dollar 
Oil Prices Climb as Iran Threatens Gulf Energy Infrastructure 
Japan GDP Growth Beats Forecast, Boosting BOJ Rate Hike Bets 
ECB Rate Hike in Focus as Oil Tops $100 
Asian Stocks Mixed as AI Chip Rally Meets Oil Surge 
U.S. Stock Futures Steady as Oil Tops $100 Ahead of Inflation Data 
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ECB's Evolving Interest Rate Policy
The European Central Bank (ECB) may have to adjust its monetary policy more swiftly than previously anticipated, according to Latvian central bank chief Martins Kazaks. However, he emphasized that interest rates should not drop to levels that stimulate economic growth.
Current Rate Cuts and Inflation Projections
This year, the ECB has already implemented three rate cuts. Some policymakers are concerned that the bank might soon fall short of its 2% inflation target, which could necessitate lowering rates below the neutral level, effectively providing stimulus. Kazaks stated, “For rates to go below the neutral, the economic baseline would have to be much weaker”, assuring that the current economic situation does not warrant such drastic measures.
Inflation Trends and Economic Caution
Kazaks noted that inflation may decrease faster than the ECB had forecast in September, but this should not be viewed as a fundamental change in price growth trends. Although wage and service price growth remains relatively high, energy costs have driven much of the anticipated undershoot.
“Reaching the 2% target sustainably could happen slightly sooner,” Kazaks remarked, indicating that a faster approach to policy easing may be necessary. The ECB’s latest prediction suggests inflation will meet its target by late 2025, but some officials believe it may occur earlier.
Looking Ahead to December
As discussions about a possible 50 basis point rate cut in December begin, Kazaks urges caution, emphasizing that forthcoming data will significantly influence the ECB’s decisions before its next meeting on December 12.
