ZE Financial Markets and Macro Weekly

"Oil prices fall with US-Russia talks, inflation in focus" — Investing.com ¹

Oil prices begun the week with a slide, “extending steep declines from the prior week as traders looked to upcoming talks between the U.S. and Russia heralding a cooldown in the Ukraine conflict”

Also, “a host of weak economic readings in recent weeks, kept oil markets largely negative on future demand.”

With President Trump imposing as much as 50% tariffs against India to stop it from buying Russian oil, threatening a similar move against China.

“Chinese consumer price index inflation read flat for July, while producer price index inflation shrank past expectations, highlighting a sustained deflationary trend in the world’s biggest oil importer.”

The CPI print is expected to offer more cues on the world’s biggest fuel consumer, as it faces potential price increases from Trump’s tariffs.

Oil extended last week's losses in the Asian Open, owing to a combination of;

(i) A possibility of a Concessional deal struck at the expected meeting Truml and Putin and,

(ii) Flat Chinese inflation data that came in lower with CPI flat, and PPI shrinking more than expected.

A cooldown in the Ukraine conflict owing to talks between Trump and Putin, would as stated in our paper earlier, would heap supply pressures (as Russian Oil 🛢️ comes into the market), whilst a slowdown in China's industrial activity, with spending not reflecting on aggregate demand through prices, will soften demand volumes.

 

UK employers are cutting back hiring in response to higher labour costs and the threat of further tax increases, according to several gloomy business surveys²

“Recruitment activity remained close to a two-year low in July, with agencies reporting a further sharp slowdown in placements of both permanent and temporary staff” – FT

Last week it seemed like the unemployment situation was concentrated in the hospitality sectors however other sectors have joined in as well, notably public services and education, retail and care. – Zero Equilibrium 

“The index for permanent placements stood at 40 in July, only marginally up from the previous month’s two-year low of 39.1. Any reading below 50 shows that recruiters are, on balance, more likely to be seeing activity contract than improve.”

Tax and minimum wage increases had already tightened labour budgets, and businesses were “preparing for further cost exposure ahead of the Autumn Statement”

“The latest figures based on the Office for National Statistics’ (ONS) labour force survey suggest that both employment and unemployment have been rising, while the rate of economic inactivity — people who neither have nor want a job — has been coming down.”

This makes it difficult to read as the supply data according to BOE Governor Andrew Bailey, is “not as robust as we would like them to be”. However what's clear is that labor demand is softening. – Zero Equilibrium Commentary 

India consumer inflation slows for ninth straight month — hits lowest since 2017

India's reserve bank held rates steady at 5.5% last week, with CPI down “for a ninth straight month to 1.55%, below analysts’ estimates”. – CNBC

headline inflation rate fell on the back of declining growth in food prices, to its lowest level since June 2017, at -1.76% which was lower than the -1.06% June figures. 

“Tuesday’s CPI reading offer room for a looser monetary policy to shore up India’s economy as it grapples with trade tensions stirred by U.S. President Donald Trump’s aggressive tariff policy.”

This is despite facing a total of 50% tarrifs by the US at months end. However given the fact that Trump has extended the Chinese additional tariffs to November, the Zero Equilibrium view still holds that the tariffs are a negotiation tactics. But this time against Russia indirectly unlike China. – Zero Equilibrium Commentary 

“India’s economic growth came in better than expected for the quarter ended March, expanding 7.4% year on year and sharply higher than the 6.7% growth forecast by economists in a Reuters poll.” –CNBC

“The RBI forecasts GDP growth of 6.5% for the year ending March 2026. The central bank forecast inflation at 3.1% for the fiscal year.” – CNBC 

With strong growth, and a softer CPI, you have a strong consumer, and a resilient economy that might well beat expectations. – ZE Commentary 

US Consumer prices rise 2.7% annually in July, less than expected amid tariff worries ⁴

The US headline CPI “increased a seasonally adjusted 0.2% for the month and 2.7% on a 12-month basis, the Bureau of Labor Statistics reported Tuesday. That compared to the respective Dow Jones estimates for 0.2% and 2.8%.” – CNBC 

“Core CPI increased 0.3% for the month and 3.1% from a year ago, compared to the forecasts for 0.3% and 3%. Federal Reserve officials generally consider core inflation to be a better reading for longer-term trends.” – CNBC 

A “0.2% increase in shelter costs drove much of the rise in the index, while food prices were flat and energy fell 1.1%, the BLS said. Tariff-sensitive New vehicle prices also were unchanged though used cars and trucks saw a 0.5% jump. Transportation and medical care services both posted 0.8% moves higher.”

Key Market Moves Right After Release:

• Bond Market & YieldsU.S. 10-year Treasury yields dipped slightly, with the rate touching around 4.26% .

• Stock: U.S. equity futures advanced: Dow Jones up ~0.5%, S&P 500 +0.4%, Nasdaq +0.5% . As a favourable inflation print boosted hopes of a rate cut. All major indexes are up pre-market.

 

Commodities:

• Oil prices softened, with WTI crude retreating below $64 per barrel . And BRENT still below $67.

• Gold futures are flat on the news with Spot prices declining and futures #XAUUSD, in the green intraday.

This CPI came in softer than expected headline inflation, but core holding steady, and being the indicator the Federal Reserve watches the most is pretty sticky taking into account the fact that most of the additional tariffs hadn't been in play yet as Trump gave a grace period. 

The slowdown in monthly increases are modest but enough to reinforce a “cooling inflation” narrative, but core inflation shows some worry as it excludes food and energy– showing that the non-variable portions of the the index is still sticky and way above the Fed's target. – ZE Commentary 

Stocks rally, oil prices drop after modest US inflation data solidifies Fed rate cut expectations ⁵

The week saw, a rally in stocks not confined to the States, but globally as, “world shares rallied on Tuesday as U.S. consumer prices data failed to shake market expectations of an impending Federal Reserve interest rate cut in September,” — Reuters

“European stocks (.STOXX), opens new tab nudged higher, rising 0.19%. MSCI's gauge of stocks across the globe (.MIWD00000PUS), opens new tab rose 0.56% to 943.41.”

This and CPI, it was said, took worst case scenario off the table, with Reuters reporting that “traders are pricing in a 92% chance of a Fed cut in September, according to the CME”

“And trade war truce between Washington and Beijing helped buoy sentiment”, with additional tarrifs paused till earliy November.

This time it wasn't just tech driving gains it was “financials, communication services, energy, industrials and materials driving gains.”

Mixed Effect on Sovereigns:

“Short-term U.S. Treasury bond prices rallied moderately, with the yield on two-year notes, which track interest rate expectations, down 1.1 bps at 3.743%. Longer-dated bond prices were lower. The yield on benchmark U.S. 10-year notes rose 3.5 basis points to 4.308%.”

— Reuters.

Effects on FX Market:

”In currency markets, the dollar weakened 0.05% to 148.085 against the Japanese yen and was down 0.5% against the Swiss franc . The euro rose 0.43% against the dollar at $1.166550.”

“The pound rose 0.5% against the dollar to $1.34990 as traders anticipated the Bank of England lagging behind other non-U.S. central banks in implementing rate cuts.” This comes even as the Bank of England cut it's benchmark rate by 25bps last week. The "ten-year gilt yields rose by 5 bps to 4.624%."

Commodities:

“In commodities, spot gold prices were flat at $3,344.60 per ounce after dropping nearly 1.6% on Monday in response to Trump announcing there would be no tariffs on imported gold bars.”

A cautions profit taking move giving bears a look little headway. However the move is expected to bottom out at the $3,300 level.

Post the release Brent Crude traded marginally down to 0.14% to $66.55 a barrel, and WTI fell 0.53% to $63.62 a barrel. Oil is moved mainly by the anticipated Trump-Putin meeting set for Friday August 15. – ZE Commentary 

Stocks rise as S&P 500 and Nasdaq hit fresh record highs ⁶

The S&P 500 and Nasdaq Composite advanced 0.4% and 0.5%, respectively, reaching fresh record highs. The Dow Jones Industrial Average gained 186 points, or 0.4%.

 S&P at the time of this report traded at $6471.13, and NASDAQ 23,940.60

However “not all investors came away convinced by Tuesday’s strong moves. 3Fourteen Research co-founder Warren Pies said the moves in small-cap names may not be what they seem in this late-cycle environment.”

Pies said to CNBC that he felt there were  “some concerns in my mind about the labor market and the growth story and the market’s kind of glossing over them”

FMDQ confirms plans to launch equity market competing with NGX - Nairametrics ⁷

FMDQ Nigeria plans to launch it's equity market platform competing with the NGX. Prioritizing the activation of the FMDQ Equity Market, reaffirms the Group’s commitment to expanding its offerings and deepening Nigeria’s capital markets.

The launch will put FMDQ against the NGX which has been the sole equities market exchange for years. Attempts to launch competing exchanges have failed in the past.For example the Abuja Stock Exchanged launched in 2001 but was closed soon after by the government.

The NGX has experienced impressive traction in 2025 with market capitalization nearing N100 trillion mark.

FMDQ Exchange said it will focus on activating the repurchase agreement market for short-term funding, as well as launching its equity market and unsponsored depositary receipts market.

The Exchange also plans to separate FMDQ Academy into a standalone entity to strengthen its training and capacity-building efforts, maintain its central counterparty (CCP) services and continue working toward wider industry recognition, and incorporate equity market depository services.

FMDQ’s 2024 performance was supported mainly by a sharp increase in treasury income, which rose to N16.2 billion from N3.2 billion in 2023, and other income, which increased to N15.5 billion from N7.4 billion.

  “other income’ category, margin management fees contributed the largest share at N10.1 billion, followed by commercial paper quotation fees of N1.6 billion, processing fees of N1.2 billion, with the balance coming from other revenue streams.”

 

China’s growth stumbles in July as retail sales, industrial output miss forecasts ⁸

Retail sales last month rose 3.7% from a year earlier, sharply missing analysts’ estimates for a 4.6% growth.Industrial output rose 5.7% from a year ago in July, its weakest level since November last year.

 

“Fixed-asset investment expanded 1.6% this year as of July, slowing from 2.8% in the first six months. contraction in property investment worsened, slumping 12% in the first seven months, government data showed.”

The economy lost momentum in July, with growth faltering across the board, as weak domestic demand persisted.

Even though, the economy expanded 5.3% in the first half of the year, on track to meet [Beijing’s] growth target of 5%, economists warned that risks of full-year growth undershooting its target remain, and called for fresh policy support in the second half of the year. 

 

Japan's economy expands more than expected in second quarter despite U.S. tariff headwinds  ⁹

The GDP beat in Japan was mainly attributed to resilience in exports, which added 0.3 percentage points to GDP growth, compared to the 0.8% contraction in the first quarter of the year

“Japan was spared the 24% tariff that was announced on “Liberation Day,” but had to face 25% duties on its key automobile sector. Auto exports to the U.S. are a cornerstone of Japan’s economy, making up 28.3% of all shipments in 2024,”

 

Financial Media References:

¹ https://uk.investing.com/news/commodities-news/oil-prices-fall-with-usrussia-talks-inflation-in-focus-4211770

² https://www.ft.com/content/fdd5345f-1f81-469a-b0b8-961c4d84d21e

³ https://www.cnbc.com/2025/08/12/india-cpi-july-inflation.html?__source=androidappshare

⁴ https://www.cnbc.com/2025/08/12/cpi-inflation-report-july-2025.html?__source=androidappshare

⁵ https://www.reuters.com/world/china/global-markets-wrapup-1-2025-08-12/?taid=689aa7355c0e4800014f9941&utm_campaign=trueAnthem%3A+Trending+Content&utm

⁶ https://www.cnbc.com/2025/08/12/stock-market-today-live-updates.html?__source=androidappshare

⁷ https://nairametrics.com/2025/08/12/fmdq-confirms-plans-to-launch-equity-market-competing-with-ngx/

⁸ https://www.cnbc.com/2025/08/15/chinas-growth-stumbles-in-july-as-weak-demand-industrial-capacity-curbs-weigh.html?__source=a

⁹ https://www.cnbc.com/2025/08/15/japans-gdp-expands-more-than-expected-in-second-quarter-as-tariffs-take-hold.html?__source=androidappshare