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Morning Brew September 7 2026
Summary: Heading towards the third important Friday in a row
Good morning.
US markets are closed today, due to Labor Day
Markets start the week with a familiar mix of geopolitics, energy risk, central-bank decisions and one important U.S. inflation print ahead. The Middle East escalation is again the main macro risk, not only because of crude oil, but also because of gas, diesel, gasoline, shipping costs and the second-round inflation effects that follow.
Friday’s U.S. CPI will be the final major input before next week’s FOMC decision. It follows two already important Fridays: Jackson Hole first, then the nonfarm payrolls report. The Fed is now in its usual blackout period, so markets will have to trade the data without much help from central-bank communication.
Friday’s jobs report was stronger than expected, with payrolls rising by 162,000 in August versus an estimate of 55,000, while the unemployment rate held at 4.1%. June and July were revised higher by a combined 55,000. The data pushed rate-hike expectations higher again, with money markets pricing a more than 50% probability of a September hike. The 2-year Treasury yield rose 8 basis points to 4.416%, its highest level since January 2025.
U.S. politics remain firmly in focus. Donald Trump sent Jared Kushner and Steve Witkoff to Moscow and Ukraine to try to move the peace process forward. On Friday, he also threatened on social media to halt trade with countries running a trade surplus with the United States unless the Fed cuts rates. Markets largely ignored the comment, which probably tells us enough.
Central banks are moving back into focus. The ECB starts the September cycle on Thursday, with markets assigning a very high probability to a 25-basis-point hike as inflation remains too high. Oracle also reports on Thursday and will be watched as another read on the AI infrastructure and cloud spending cycle.
Asian technology shares rallied on Monday as the strong U.S. jobs report was taken as positive for global growth, even though it also narrowed the path toward lower rates. Oil edged higher after attacks on vessels in the Gulf raised fresh concerns about a prolonged supply disruption.
Oil remains the clearest transmission channel from geopolitics into inflation. Prices extended gains as tit-for-tat strikes between the U.S. and Iran on vessels near the Strait of Hormuz kept supply-risk premia alive. OPEC+ left its output policy unchanged for October at Sunday’s meeting.
In Germany, the AfD achieved a major win but missed an absolute majority with 44% of the vote. The political fallout will be closely watched, especially after the CDU lost roughly half of its voters.
Swiss Re warned that insured natural-catastrophe losses could reach around USD 320 billion globally this year in an extreme scenario, according to
U.S. equities were softer on Friday. The Dow fell 0.5%, the S&P 500 lost 0.4%, and the Nasdaq slipped 0.3%. Semiconductors were the clear outperformers, gaining 3.4%, although the sector remains sharply lower for the quarter. Software and services lagged, while Adobe fell after company-specific news and Lululemon tumbled after cutting its full-year profit and revenue outlook.
European equities posted their third weekly decline in four last week, with the Stoxx Europe 600 falling 0.8% — its worst weekly drop in nearly two months — as rising bond yields weighed on sentiment. The Euro Stoxx 50 ended the week 1.43% lower at 6,392.93. The DAX fell roughly 2% for the week, though Volkswagen was a standout gainer on Friday, rising 6.5%. The FTSE 100 was little changed on Friday at 10,831, with AstraZeneca and Experian (down 4.4%) among the laggards. ASML rose 3.1% on Friday, leading the Stoxx 600 higher on the day. The benchmark sits roughly 2% below its early-August record high.
FX is steady but sensitive to rate expectations. The yen is near 155.90 per dollar after last week’s strong rally. EUR/USD is around 1.1610, supported by expectations of another ECB hike, while GBP/USD is near 1.3515 and USD/CHF trades around 0.81. EUR/CHF is around 0.9410.
Precious metals had a weak Friday and are trading around 4,400 for gold and 65.75 for silver this morning.
Bottom line: The week is not short of catalysts. Middle East escalation keeps the inflation story alive through energy — even if not necessarily through crude oil alone. Friday’s U.S. CPI will be the last clean input before the Fed decision, and the ECB is likely to keep the European rate debate hawkish. Markets are still resilient, but the mix of higher energy prices, firmer payrolls and central-bank event risk argues against complacency.
Charu took a look at the next release of Open AI: GPT-6 Astra: What it means for the next leg of AI
- AI is moving from chatbots towards digital workers. GPT-6 Astra points to models doing more multi-step professional work across coding, research, software and cybersecurity. The opportunity is significant, but reliability, security, cost and governance remain important constraints.
- The infrastructure story is broadening beyond GPUs. More capable models and potentially wider adoption can increase demand for compute, memory, networking, storage and power, although the risk is that capacity and spending expand faster than end-demand or returns.
- The next phase is increasingly about AI economics. More capable models can also be more expensive to run. The market is likely to focus less on who spends the most and more on who can translate AI into revenue, productivity and better margins after accounting for the cost of AI itself.
Monday, 7 September 2026
Macro: Swiss unemployment, Germany industrial production, euro-area GDP; U.S. and Canada closed for Labor Day.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings: No major global large-cap focus.
Tuesday, 8 September 2026
Macro: Japan final Q2 GDP.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings: No major global large-cap focus.
Wednesday, 9 September 2026
Macro: China CPI and PPI.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings: No major global large-cap focus.
Thursday, 10 September 2026
Macro: Germany final CPI; U.S. PPI and initial jobless claims.
Central banks / speakers: ECB rate decision and press conference.
Corporate earnings: Oracle.
Friday, 11 September 2026
Macro: UK GDP; U.S. CPI; preliminary University of Michigan consumer sentiment.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings: No major global large-cap focus.