Eurozone Inflation and US Data Releases Dominate Markets

Financial markets are relatively subdued on the first trading day of September as investors focus on preliminary August inflation readings from the Eurozone and mid-tier macroeconomic data releases from the United States. The US Dollar has erased a small portion of its previous week's gains, but is still trading near 99.50.

US Treasury Secretary Scott Bessent emphasized that core inflation remains 'very restrained,' suggesting that interest rates shouldn't be raised into a supply shock. However, President Donald Trump stated that interest rates are too high and has expressed his respect for Fed Chair Kevin Warsh.

The upcoming data releases include the JOLTS Job Openings report for July and the Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) for August. Analysts at BNP Paribas warn that political pressure on the Federal Reserve has intensified, potentially eroding its credibility and leading to higher economic costs in restoring price stability.

The data from Germany showed a decline in Retail Sales by 3.4% in July, missing market expectations. The Harmonized Index of Consumer Prices in the Eurozone is forecasted to rise 3.3% on a yearly basis in August.