Market Summary (Sep 4, 2025)

We see mounting evidence of US labor‐market softness, with JOLTS and ISM‐services data underperforming and consensus now looking for sub‐60k NFP this Friday. That weakness is underpinning calls for the Fed to begin cutting rates starting at the Sep 16–17 meeting (25 bp), with at least one more cut by year-end. In this environment, we expect the US dollar to weaken further—yen strength should push USD/JPY into the mid-140s, while sterling is likely to underperform amid ongoing UK‐Europe policy uncertainty. Gold is positioned to benefit most: history shows a 6 % rally in the 60 days following the first Fed cut, which would take spot toward $3,700, while strategists see scope for $3,800 by year-end and even $4,000 over the longer term as central banks diversify away from dollar reserves.