Awaiting Powell’s Speech

October 9, 2025

There’s been little reaction to news that Hamas and Israel reached a deal that is supposed to allow an exchange of hostages and prisoners and pave the way to a ceasefire in Gaza by the weekend.

Financial market attention is instead focused on Fed policy. In the wake of yesterday’s published FOMC minutes that showed a wide diversity regarding the timing and size of interest rate cuts in the coming few months, Fed Chairman Powell will shortly be delivering a keynote address to a banking conference.

The weighted DXY dollar index is unchanged from Wednesday’s closing level. The U.S. currency is 0.2%% firmer against sterling and up 0.1% relative to the yen and euro but down by 0.2% versus the Australian dollar and Korean won and by 0.1% vis-a-vis the Swiss franc and Mexican peso.

Ten-year sovereign debt yields have edged up a basis point not only in the United States but also the U.K., Germany, Italy, Japan, and Spain. The exception, a 1-basis point dip in France’s 10-year sovereign debt yield, follows indications from the Macron government that snap elections are not likely.

As investors mark time, the prices of Bitcoin, oil and gold have slipped by 0.4%, 0.3% and 0.2%.

Stock markets show mixed movement. U.S. stock futures are little changed. Share prices rose 1.8% in Japan, 1.3% in China, and 1.0% in Indonesia and 0.9% in Taiwan. In Europe, too, the German and French stock exchanges are so far 0.6-0.7% higher, but Italy’s market shows a 1.1% lowss and smaller dips have occurred in the U.K. and Spain.

The overnight Filipino deposit rate was cut today by 25 basis points further to 4.75% in a move that had not been predicted by analysts. This was the seventh such reduction since August 2024 and was made in spite of a near doubling of on-year consumer price inflation in the Philippines from 0.9% in July to 1.7% last month. Even at 1.7%, that’s a tad below the 2-4% inflation target range. Defending today’s action, a released explanation by the Central Bank of the Philippines makes the following points:

The outlook for inflation is benign and well within the target range. Inflation expectations remain well-anchored. the risks to the inflation outlook are limited as price pressures are expected to ease. The outlook for domestic economic growth has weakened. The favorable inflation outlook and moderating domestic demand provide room to further support economic activity.

As expected, the policy interest rate of the National Bank of Romania was left unchanged at 6.5%. It’s been at that leverl since August 2024 and is thus not far below the last cyclical peak of 7.0% sustained from January 2023 until July 2024. Romania’s consumer price inflation rate of 9.9% in August was considerable up from 5.7% two months earlier.

Due to the U.S. federal government shutdown, weekly jobless insurance claims were not reported this Thursday. There haven’t been many data releases today from other economies.

The German seasonally adjusted trade surplus of EUR 17.17 billion in August embodied a bigger monthly drop in imports (1.3%) than exports (-0.5%) and was both wider than consensus forecasts and either the June or July surpluses.

Greek consumer price inflation slowed to a 24-month low of 1.9% in September from 2.9% in August, 3.1% in July and a peak of 12.1% in September 2022. Irish consumer price inflation alternatively accelerated to an 18-month high of 2.7% last months.

Over the 12-months between Septembers 2024 and 2025, producer prices declined by 2.8% in Norway and 0.8% in Lithuania, largely reflecting energy costs.

Turkish industrial production rose 0.4% in August and 7.1% from its year-earlier level. Factory output in South Africa also posted a 0.4% increase in August but was 1.5% below its year-earlier level.

Japanese machine tool orders recorded their largest year-on-year advance in September (+9.9%) since March.

Tags: FOMC Minutes, German trade surplus

This entry was posted
on Thursday, October 9th, 2025 at 6:23 am and is filed under New Overnight Developments Abroad – Daily Update.
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