Price and Industrial Production Data for Many Economies, Big ECB Announcement Tomorrow, and So Much More – Currency Thoughts

Price and Industrial Production Data for Many Economies, Big ECB Announcement Tomorrow, and So Much More

September 10, 2025

French President Macron wasted little time appointing his next Prime Minister, Sebastien Lecornu and by picking someone whose policy preferences align with his signals a continuing stress on budget cuts and pro-business legislation.

Street riots continue in Nepal, and that country’s prime minister resigns.

U.S. President Trump suggested he might slap tariffs as high as 100% on China and India to prod their leaders into stopping oil purchases from Russia.

While the Fed is almost universally expected to cut its interest rate later this month, the European Central Bank Governing Council is widely projected to leave its interest rates on pause for a second straight time. The announcement is due tomorrow.

Central banks in Chile, Georgia and Azerbaijan have left their policy interest rates unchanged. None of these decisions was a surprise.

• The Central Bank of Chile last cut its rate in July by 25 basis points to 4.75%, which compares with a peak of 11.25% from October 2022 until an initial reduction in July 2023. CPI inflation of 4.0% last month was at a 16-month low but above the 3% target.
• The National Bank of Georgia‘s policy interest rate has been 8.0% since a 25-basis point cut in May 2024. Cumulative rate reduction since May 2023 totals three percentage points. CPI inflation rose to 4.6% last month, but core inflation of 2.8% is close to the 3% medium term objective.
• The Central Bank of Azerbaijan last cut its interest rate in July to 7.0%. There have been six reductions in all since the rate crested at 9.0% from May 2023 through October of that year. Azerbaijani CPI inflation of 6.5% is a tad above the central bank’s target corridor of 2-6%.

The Fed had been likely prepared to cut its interest rate this month even if U.S. inflation accelerated in August, but as things turned out producer price pressure decelerated and rather significantly in the month. The 12-month increase in the U.S. overall PPI index dropped back a half percentage point to 2.6%, a 2 month low. Core PPI inflation excluding food and energy dropped 0.6 percentage points to 2.8%, also a 2-month low. Each of those results is well below street expectations. Only when also excluding trade, which has been buoyed by tariffs, did the PPI rate tick higher, but the 0.1 percentage point rise to a 5-month high of 2.8% was close to forecasts.

A slew of other countries also reported price data today, most notably China where the August CPI showed deeper deflation of -0.4%, its most negative extent since February and not far removed from the 18-month low of -0.7% reached then. Core CPI was below 1.0% at 0.9% last month, and overall producer price inflation printed at an as-expected negative 2.9%. In spite of the global tariff war, China’s issue is that price pressure remains too low.

Among other August consumer price releases today, Danish inflation slipped back to 2.0% from July’s 23-month high of 2.3%. Norwegian inflation rose 0.2 percentage points to a 6-month high of 3.5%. Portuguese CPI inflation of 2.8% represents an 8-month high. Greek inflation settled back 0.3 percentage points to a 2-month low of 2.9% after a 15-month high in the prior month. A 2.5% rate of Czech CPI inflation was at a 3-month low. Egyptian consumer price inflation slowed for a third straight month, reaching a 41-month low of 12.0% versus 16.8% in May and a peak of 38.0% in September 2023. Brazilian inflation slowed to four a fourth consecutive month to a 6-month low of 5.1%. The Brazilian lowest inflation since the cyclical peak of 12.1% in April 2022  was 3.2% in mid-2023. Mexico’s inflation rate, which peaked at 8.7% in September 2022, had fallen to a 55-month low of 3.51% in July before edging up to 3.57% last month.

In Kazakhstan, producer inflation rebounded a full percentage point to a 4-month high of 6.7%.

Many countries also reported July industrial production data. Compared to July 2024, output rose 2.5% in Spain, 1.8% in Austria, 3.8% in Sweden, 0.9% in Italy, 10.3% in Ireland and 1.1% in Slovenia but alternatively fell 1.8% in Turkey, 4.2% in Finland, 4.6% in Slovakia, and 8.3% in Bulgaria.

The index of Indonesian consumer confidence printed at a 35-month low of 117.3 in August, down from 118.6 in July and 127.7% last December.

With the U.S. 30-year fixed mortgage rate diving 15 basis points last week to 6.49% (its lowest point since last October), mortgage applications jumped by 9.2%, breaking a 3-week streak of declines totaling -3.7%.

Shortly before the U.S. PPI data were released this morning, the weighted dollar index was unchanged from Tuesday’s closing level. Prices for bitcoin, WTI oil and gold showed upticks of 0.7%, 0.9% and 0.2%. Ten-year sovereign debt yields had ticked up a basis point in Germany, France and Italy but dipped a basis point in the U.S. where stock market futures were narrowly mixed. Stock markets this Wednesday closed up 1.4% in Taiwan, 1.7% in South Korea, 1.0% in Hong Kong and 0.9% in Japan but had merely edged 0.1% higher in China. European stock markets showed scant net change, except for Spain where share prices had risen over 1%.

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: a new French prime minister, China CPI and PPI, latest Trump tariff threat, U.S. PPI

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