UK
It wasn’t a great week for sterling or sentiment in London. The pound suffered its steepest weekly fall since July, slipping nearly 1% as doubts about the UK’s fiscal path were laid bare. Weak manufacturing and services data – alongside a disappointing debt auction – added fuel to investor anxiety.
The backdrop is a tricky one. Inflation remains elevated, and the OECD now predicts the UK will see the highest inflation among G7 countries in 2025 at ~3.5%. Meanwhile, growth is sluggish, and wage pressures, shrinking job vacancy numbers, and rising employer costs (e.g. National Insurance) are squeezing both households and businesses.
Monetary policy is caught in a bind. The Bank of England expects subdued underlying GDP growth and sees “slack” building in the labour market, suggesting limited room for stimulus. That said, with inflation still sticky and bond yields spiking, rate cuts look farther off than some had hoped.
On the political front, the stage is shifting. Labour’s cabinet reshuffle in early September – triggered by the resignation of Deputy PM Angela Rayner – continues to reverberate, with top-level changes in the Home and Foreign Offices. And the looming November budget is looking particularly painful: markets expect more tax rises or spending cuts as the government wrestles with credibility in bond markets.
To summarise the mood: uncertainty. The UK is under pressure from both macro realities and market discipline.
US
The U.S. continued to flex its economic muscle this week. A surprise draw in crude inventories sent oil prices jumping (we’ll discuss oil more in a minute). Q2 GDP data was revised upward, reinforcing the view that the economy is stronger than many expected.
That strength has consequences: it’s denting expectations that the Fed will cut rates soon. Gold, for instance, held steady rather than racing higher, as bond and equity markets adjusted to a more hawkish Fed stance.
Politically, tensions remain high. Trump continues to lean hard on policy, including pushing for bold trade action. And while the spotlight this week was more on macroeconomic data than Fed‑Chair pressure, the undercurrent is clear: any hints of Federal Reserve intervention or accommodation will be met with scrutiny. Markets are watching every word from Fed officials closely.
One more dimension: energy diplomacy. The U.S. reiterated that shrinking Russian gas exports to Europe is one of the most powerful levers to pressure Moscow amid the Ukraine conflict.
In short: the U.S. economy is holding up well, and every hawkish data point adds more weight to rate‑cut scepticism as we move toward year end.
EU
Brussels is gearing up for enforcement. One headline this week: the EU is considering tariffs of 25–50% on Chinese steel and related products – a response to cheap imports hitting European industries. That said, EU insiders suggest severe tariffs on India / China tied to Russian oil purchases are unlikely, despite pressure from the U.S. side.
Meanwhile, in the metals space, the G7/EU are mulling price floors or export taxes on rare earths, to counter China’s dominance in that critical supply chain.
The macro picture is mixed. Growth remains tentative, inflation still hovers, and investors are watching how European exporters will weather trade friction (especially with the U.S. pushing hard on tariff escalation).
In geopolitics, the EU is stuck between tightening energy sanctions on Russia and balancing reliance on energy imports. The leverage over Russia’s gas and oil flows is central to its strategic posture.
It’s a delicate balancing act: defending industry, managing inflation, and pushing on geopolitical fronts.
China
China was in the spotlight for its copper sector this week. The China Nonferrous Metals Industry Association announced that it is studying stricter regulation of copper smelting capacity, aimed at tempering excessive competition and addressing oversupply. Because processing fees are plunging, many smelters have been undercutting each other aggressively – even offering free processing in some cases.
In gold markets, things were muted domestically: Chinese dealers were offering large discounts to global prices (as much as $31–$71/oz), pointing to weaker local demand. That said, other Asian hubs – like India – continued to see stronger physical demand.
On the trade front, China remains in U.S. and EU crosshairs. The EU’s potential steel tariffs and G7 rare earth policy discussions could impact Chinese exports. And although the U.S. has called for tariffs on Russia‑oil purchasers like China and India, the EU is signalling restraint. Reuters+1
So, China is juggling weakening export margins, domestic commodity restructuring, and mounting external pressure.
India
India continues to navigate the geopolitical squeeze. With U.S. pressure mounting on countries buying Russian oil, India remains a key pivot. While tariffs have been floated as a stick, the EU appears hesitant to impose harsh measures on India, balancing strategic partnerships and energy needs.
Gold imports flagged strength: premiums in India held firm – among the highest in Asia – as domestic demand for coins and bars held up well.
Of course, India’s export position is tricky. The country is caught between the U.S. and China, with potential 50% tariffs looming on some goods. It must thread a fine line: maintain trade flows, but avoid being pressured into politically driven supply dependencies.
🪙 Metals — Gold & Copper
This week in metals, the story was one of resilience under pressure. Gold hovered steadily, with spot prices around $3,780/oz (at the time of writing), as stronger-than-expected U.S. GDP data cooled rate‑cut optimism. Gold is up ~1.9% on the week.
Copper is undergoing its own structural stress test. In China, regulators are eyeing tighter control on smelting capacity to curb what has become a cut‑throat oversupply race. That has kept copper prices under pressure even as supply-side concerns linger globally.
At the same time, the broader push by G7/EU to support critical minerals and rare-earth industries may reshape downstream dynamics.
So: gold remains a safe haven holding ground; copper is wrestling with internal supply imbalances and regulatory change.
🛢️ Oil
Oil was one of the week’s most volatile sectors. WTI Crude prices jumped ~3%, hitting a 7-week high, after a surprise draw in U.S. crude inventories reinforced tighter supply perceptions. However, prices are still down on the year, with WTI trading at $64.75 at the time of writing.
OPEC+ also looms large: although it raised its output target for September and October, analysts warn many members may not reach those increases. Some believe actual production gains will be much more modest – perhaps only a fraction of the target.
Overlaying all this is a geopolitical squeeze: Europe is intensifying its energy sanctions on Russia, and the U.S. remains focused on restricting gas flows to further pressure Moscow. The combination of tighter inventories, constrained flows, and geopolitical risk is keeping traders nervous.
In sum: oil is rallying, but it’s not guaranteed. Supply catch-up is uncertain, and demand risks from global slowdowns remain ever-present.
🧭 Quick Take
- Risk-on tone largely in place, but the data is proving more ambiguous: strength in U.S. growth, weakness in Europe/UK
- Sanctions and tariffs continue to dominate: Russia, China, India – all are focal points
- Metals and energy remain key battlegrounds for policy, geopolitics, and market positioning
