Morning Brew September 17 2025

Nerves ahead of the US Rate decision

US Equities ended the day slightly lower yesterday in decent volumes as all eyes turn to the rate decision and Powell's speech tonight. The expectation is firmly for a 25 BPS cut with a probability of 97%, while the remaining 3% are in favor of a 50 BPS cut. The DAX lost 2% yesterday on little news, and the CAC 40 lost 1%, more than the US counterparts. The S&P lost 0.13%, the Nasdaq 0.07%, and the Dow 0.27%.

Interest rate traders see the year-end rate at just below three cuts this year, with the December rate 68 basis points below the current level. The USD Index fell to 96.71, with the EUR/USD at 1.1860, GBP/USD at 1.3644, and USD/JPY at 146.50. Gold and silver are lower overnight at 3678 and 42, respectively. Platinum fell to 1392, while Bitcoin is looking stronger at 117k.

Ten-year yields are at 4.02%, within a grasp of the 3% handle. US retail sales rose 0.6%, above expectations of 0.2%.

Here is the take of our strats team and what to expect

Fed rate cut playbook: Where markets could shine

Key points:

• The Fed is expected to cut rates this week, marking the start of an easing cycle after softer labor and inflation data. Equity leadership could broaden, with lower rates extending gains beyond mega-cap tech into small caps, utilities, financials, and emerging markets.
• Bonds and real assets regain their role, as medium-duration Treasuries and quality credit offer diversification while gold becomes more compelling with falling funding costs.
• Cash is no longer king. With money-market yields set to fade, idle cash risks underperforming. Investors can redeploy liquidity into bonds for yield, equities for growth, or real assets like gold and infrastructure for diversification.

John Hardy  on the USD: USD set for breakdown on new Fed easing cycle?

The US dollar has broken lower against several G10 currencies and looks on the verge of doing so against the euro single currency and the Japanese yen. There is no hawkish scenario tomorrow for the Fed, so what can stand in the way of dollar sellers?

After the Fed is before the Quadruple Witching Friday, here is Koen`s  

Open Interest Monitor - 16 Sep 2025 - SPX deep dive | Saxo

This monitor tracks how option market activity is clustering across US-listed stocks, ETFs, and indices. We highlight where open interest is growing, how skew and implied volatility shape sentiment, and which tickers show signs of institutional interest.

Each edition also features a deep dive on a single name showing unusual flows, rising implied volatility, or proximity to a key event. This week’s focus is on the S&P 500 Index (ticker SPX:xcbf), ahead of the Fed and quarterly expiry

Trade Safely

• Japan Trade,
• UK CPI
• EU HICP
• BoC Rate Decision
• US Rate Decision

  Thursday Sept 18

• Norway Rate decision
• UK Rate Decision
• US Philly Fed & Initial Jobless rate

Friday Sept 19

• Quadruple Witching Friday
• Trump Xi phonecall
• Japan CPI
• UK Retail Sales