The Davy Digest - 15th September 2025

Global equities finished higher last week as artificial intelligence spending and expectations around imminent rate cuts continued to fuel the market. In the US, inflation data was in focus ahead of this week’s Federal Reserve meeting. Wednesday’s Producer Price Index (PPI) came in well below expectations at 2.6% year-on-year, while Thursday’s Consumer Price Index (CPI) was in line with consensus at 2.9% year-on-year. Friday’s University of Michigan survey reported a decrease in sentiment in the US, as economic and policy uncertainty continues to weigh on the consumer.

In Europe, France appointed its third Prime Minister in a year, as Francois Bayrou resigned amid ongoing disputes over a cost-cutting budget. Thursday’s European Central Bank (ECB) meeting held no surprises, as Christine Lagarde kept interest rates unchanged for the second consecutive meeting. However, the ECB did revise its forecasts for 2026 – raising its expectations for inflation while lowering projections for growth. In Japan, Prime Minister Shigeru Ishiba also resigned after less than a year in the role.

Last week's highlights

	Producer Price Index (10/09) – Below consensus at 2.6% year-on-year US Inflation (CPI) (11/09) – In line with expectations at 2.9% year-on-year Michigan Consumer Sentiment (12/09) – Decreased to 55.4 (vs 58.0 expected)
	Sentix Investor Confidence (08/09) – Fell to -9.2 (vs 2.0 expected) ECB Meeting (11/09) – Kept interest rates at 2%, as expected
	UK Industrial Production (12/09) – Fell to 0.1% year-on-year (vs 1.1% consensus)
	China Exports Data (08/09) – Slowed to 4.4% year-on-year China Inflation Rate (10/09) – Fell to -0.4% year-on-year (vs -0.2% expected) Brazil Inflation (10/09) – Slowed to 5.13% year-on-year

Looking ahead, central bank meetings will likely dominate this week’s headlines, with policymakers convening in the US, the UK, and Japan. The Federal Reserve’s meeting on Wednesday will be closely watched, with Jerome Powell set to deliver his first rate cut since December, despite ongoing uncertainty about the effects of tariffs on the economy. On the data front, there will be Industrial Production readings for both the US and Europe. Further afield, there will be an inflation print in Japan, while China publishes data on retail sales.

What's on the radar

	Industrial Production (16/09) Federal Reserve Meeting (17/09)
	Industrial Production (16/09) ZEW Economic Expectations Survey (16/09)
	August Inflation (17/09) Bank of England Meeting (18/09) Consumer Confidence (19/09)
	China Retail Sales (15/09) Japan Inflation (19/09) Bank of Japan Meeting (19/09)

Chart of the moment - Worth it's weight

Source: Bloomberg, IMF, US Treasury Department, as of 12/09/2025.

• In recent years, central banks have been steadily increasing their gold reserves to diversify away from US dollar-denominated assets.
• This trend has accelerated recently amid rising geopolitical tensions and concerns about the security of dollar holdings, particularly following the sanctions imposed on Russian after the onset of the war in Ukraine.
• At the same time, the share of US Treasuries held as reserves has been declining, as central bankers become increasingly wary of the deteriorating fiscal outlook and heightened political uncertainty in the US.
• Gold has risen by more than 40% in the last year, driven by consistent central bank buying, ongoing economic uncertainty, and a weakening in the dollar.

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