Economic News September 1, 2025: PMI Indices in Asia and Europe, Second Day of the SCO Summit, ECB President Christine Lagarde's Speech, Geopolitical Factors and Market Impact. Analysis for Investors.
The first trading day of September begins amidst a decline in global activity: the US and Canada are closed for Labor Day, resulting in lower trading volumes on global markets. However, investors are focusing on a series of important economic releases. This morning, PMI indices for manufacturing in key countries in Asia and Europe will be released, setting the tone for assessments of the global economy's state. The Eurozone will report unemployment figures during the day, reflecting labor market health, and in the evening, ECB President Christine Lagarde's speech is expected to shed light on future monetary policy plans. In geopolitics, attention is on the second day of the SCO summit in China, as well as the deadline for Ukraine's allies to Russia regarding the initiation of dialogue, which expires today. On the corporate front, following a busy earnings season, activity is quieter; while major announcements are sparse, investors continue to watch for any signals from companies and the dynamics of the S&P 500, Euro Stoxx 50, Nikkei 225, and the Moscow Exchange.
SCO Summit: Second Day of Negotiations in Tianjin
Today marks the conclusion of the Shanghai Cooperation Organization (SCO) summit in the Chinese city of Tianjin. The meeting of leaders from over 20 Eurasian countries, including China, Russia, India, and other SCO member and observer states, is on its second day. A package of joint documents comprising about 20 agreements, including the Tianjin Declaration and a new SCO Development Strategy until 2035, is expected to be approved. The focus is on enhancing economic cooperation, regional security, and the organization’s expansion (Iran and Belarus recently became full members). Investors will assess signals from this forum: if leaders announce measures to deepen trade ties, promote transactions in national currencies, or infrastructure projects, it could strengthen the positions of companies within the SCO region in the long term and reduce the region’s dependence on Western markets. Although the summit's decisions will not have an immediate impact on quotes today, the overall tone of statements—such as the emphasis on stability in Central Asia or energy coordination—will create a backdrop of confidence for investments in the region. The geopolitical consolidation in the East serves as a reminder of the shift in the center of economic power, considered by large international investors when assessing medium-term risks and opportunities.
Ukraine: Allies Await Russia's Response by September 1
Amidst the ongoing conflict in Ukraine, investors are focused on the approaching end of the informal deadline that Western allies set for Russia to demonstrate readiness for negotiations. Earlier, Ukrainian President Volodymyr Zelensky stated that Kyiv's partners agreed to wait until September 1 for signals from Moscow regarding a willingness for high-level bilateral meetings. With no peaceful initiatives from Russia observed by today's date, the likelihood of increased sanction pressure is rising. The EU discussed a new, 19th package of sanctions against Russia last week—its parameters (such as a potential embargo on Russian diamond exports or additional restrictions in the energy and financial sectors) may be adjusted considering the lack of diplomatic progress. The market's trajectory will follow one of several scenarios. If Western countries announce stringent measures today or in the coming days, this could negatively impact certain assets: commodities (oil, gas, metals) and companies linked to the Russian market might feel pressure due to expectations of supply disruptions and new trade barriers. European energy companies and currencies in Eastern Europe reliant on trade with Russia will be particularly sensitive. Conversely, if new severe sanctions do not follow and the rhetoric remains only warning, investors would perceive this with relief. The absence of escalating sanctions would support stability in the markets—European stock indices and currencies of emerging countries could recover part of their recent losses, and volatility could decrease. Overall, the expiration of the September 1 "ultimatum" is a significant geopolitical milestone: it could either lead to an intensification of pressure on Russia or signal that the West is willing to wait longer, temporarily reducing tension for global investors.
Asia: Manufacturing PMI in China, Japan, and India
Early this morning, a block of statistics on the industrial sector of Asian economies was released, setting the tone for the beginning of the month. The focus is on the Caixin manufacturing PMI index for China—an important leading indicator for the world's second-largest economy. It was expected that the August reading would hover around the 50-point line. The previous July index was 49.5, indicating a slight contraction in activity in Chinese factories. A new PMI reading close to or above 50 would signal a stabilization of Chinese industry by the end of summer, which would be a positive surprise, indicating a gradual revival in demand and the effectiveness of stimulus measures undertaken by Beijing. Such an outcome could support prices for industrial metals, oil, and stocks of Asian companies oriented toward domestic demand in China. If the index shows a decline again (deeper than 50), investors will heighten concerns about a slowdown in the Chinese economy. A weak PMI would highlight issues—from the real estate market slump to declining external demand—and could trigger short-term declines in commodity prices and currencies of emerging countries linked to China.
Japan has published the final S&P Global Manufacturing PMI reading for August. According to the preliminary estimate, the index stood at 49.9 compared to 48.9 in July, barely missing the neutral level. This means that the decline in Japanese manufacturing has virtually come to a halt—new orders and production have increased slightly compared to the previous month. From an investor's perspective, this signal is neutral to positive: stagnation is better than further deepening recession in the sector. Almost zero change in PMI indicates a stabilization of external demand (crucial for Japanese exporters) and a weakening of the negative impact from previous raw material price hikes. The Japanese Nikkei 225 may receive support if data confirms the absence of further decline—especially shares of machinery and electronics companies, sensitive to the global cycle. However, the index below 50 still indicates caution among companies, so it may be premature to talk about a robust factory activity growth in Japan.
Conversely, India demonstrates impressive dynamics. The morning release indicated that the Indian Manufacturing PMI for August remains significantly above the 50-point threshold—around 59-60 points. This is one of the highest figures in recent years, reflecting robust growth in the manufacturing sector. Indian factories are ramping up production thanks to solid domestic demand and active exports—the country is benefiting from the relocation of some productions from China and from governmental industrial incentives. For the markets, such a strong PMI is undoubtedly a positive factor: it underscores India's status as a growth driver among major economies. High business activity combined with record indices in the services sector (the Indian composite PMI exceeded 65) draws investor attention to the Indian stock market and the rupee. A potential side effect may be accelerated inflation, as such rapid production growth is associated with rising costs and prices, as evidenced by the increase in the producer price index. Nevertheless, trust in the Indian economy remains high for now, and strong statistics only reinforce market participants' sentiment.
Europe: Manufacturing PMIs and Unemployment Data
European investors received significant confirmations of the region's economic state today. At 10:55 Moscow time, final manufacturing PMI indices for Germany were announced, followed five minutes later by the combined figure for the entire Eurozone. Preliminary assessments published on August 21 provided a pleasant surprise: after a lengthy decline, the manufacturing sector began to show signs of life. Specifically, the Eurozone PMI indicator rose to approximately 50.5 points in August (up from 49.8 in July), exceeding the critical 50-mark and entering the expansion zone for the first time in 15 months. Final figures confirmed this trend—even if the increase in activity is minimal, the fact of stabilization in European manufacturing is evident. For markets, this is a notable event: factory revival reduces the risk of recession in Europe. Demand recovery is observed in industries such as automotive and durable goods manufacturing, thanks to the easing of supply chain issues and a moderate decrease in energy prices compared to last year. If PMI stabilizes above 50 in the coming months, investors will adjust their expectations toward a softer scenario for the EU economy—stocks of industrial companies and banks could receive an additional growth impetus, and the euro could strengthen amid growing confidence in the region.
However, the situation is heterogeneous. Germany, the locomotive of the European economy, while improving its figures (the German PMI also approached ~48-49 points), remains in the contraction zone. This indicates that German factories still lack orders—impacted by weak external markets (chiefly China) and high energy resource costs. In France and several Southern European countries, conditions are better, which has allowed the Eurozone as a whole to emerge onto a positive trajectory. The UK, which is outside the EU, continues to face challenges: its manufacturing PMI, released at 11:30 Moscow time, remained significantly below 50 (around 45 points). British factories struggle with post-Brexit trade barriers and an internal investment pause—this holds back the FTSE 100 index from more active growth and pressures the pound. Thus, the European picture in manufacturing is currently mixed: the Eurozone is beginning to emerge from the pit, while England and Germany are still in it, though the depth of the contraction is diminishing.
Complementing the overall economic mosaic, the Eurozone unemployment rate for July was released at 12:00 Moscow time. The labor market continues to surprise with its resilience. The unemployment rate remained around a record low of 6.2% (approximately the same level as in June). In fact, employment in Europe is close to its maximum in several decades, despite the past year of stringent monetary conditions and an energy crisis. For the ECB, this situation is a double-edged sword. On one hand, high employment supports household incomes and consumer expenditures, mitigating the impact of manufacturing downturn on GDP. This is a positive sign for investors: a strong labor market means that households have funds to spend, and therefore corporate revenue in the services and retail sectors is likely to remain stable. On the other hand, minimal unemployment heightens inflation risks through rising wages. Signs of accelerated wage growth are already being observed in several countries (Germany, France), causing concern for the ECB. If the labor market does not cool down, the European Central Bank will find it harder to declare an end to rate hikes—pressures from labor costs may necessitate further policy tightening to tame inflation. For the markets, these nuances are important: continued tightening (high for long) may stifle stock index growth and lead to an increase in bond yields. In the short term, however, today’s data is unlikely to significantly shake the markets—they largely aligned with expectations. Investors will likely focus on the speech of ECB President Lagarde later this evening, looking for clues on how the regulator interprets the combination of "robust labor market + revitalized manufacturing + declining inflation."
Russia: PMI Index to Indicate Industrial Dynamics
At 09:00 Moscow time, the August manufacturing PMI index for Russia (Russia Manufacturing PMI from S&P Global) was published. In recent months, Russian industry has shown worrying signs of cooling: the July PMI fell to 47.0 points (down from 47.5 in June), signaling a reduction in output for the third consecutive month. Reasons include a slowdown in new orders both domestically and abroad, component supply issues, and rising costs against the backdrop of volatile ruble exchange rates. August could bring some relief to the situation. Analysts estimate that the Russian PMI index may rise slightly but will likely remain below 50 points. Even a small increase (say, to 48-49) would be viewed positively: this would mean that the decline is slowing and the sector is nearing stabilization. In this case, it can be expected that enterprises will adapt to the new circumstances—import substitution and redirecting exports to friendly countries may partially offset the pressure from sanctions, and government orders will support capacity utilization in defense and infrastructure sectors. Investors in the Russian stock market will consider an improvement in the PMI: shares of companies in machinery, chemicals, or metallurgy may gain upward momentum if the statistics indicate increased production or new orders.
However, maintaining a PMI significantly below 50 (for example, around 47 points) would confirm a continuing downturn. In this case, the market's conclusion is clear: the Russian industry is going through a tough time, and a rapid turnaround is not currently happening. Weak output in manufacturing sectors could adversely affect related sectors—from transportation to banking (through reduced lending to enterprises). Nevertheless, there may not be an immediate reaction of indices to the PMI, given that the Russian stock market has recently been largely driven by global commodity prices and exchange rate factors. The Moscow Exchange index reached new local highs in August, primarily due to high oil prices and an influx of retail investor funds, and short-term retreated only moderately. Therefore, even weak macro statistics from the industrial sector are unlikely to spark a crash—rather, they would strengthen expectations that the government and the Central Bank of Russia will continue to stimulate the economy (for example, through government spending or easing regulatory restrictions on business). Overall, the publication of the Russian PMI will provide investors with an important benchmark regarding the state of the "real" economy sector at the beginning of autumn: any result will be analyzed for trends (deterioration or improvement) and compared with similar PMIs from other BRICS countries.
Stock Markets: Holiday in the US and Index Dynamics
Global exchanges are closing the summer with mixed results, and the beginning of September is influenced by several factors. On Monday, American markets are closed due to the holiday, meaning that global indices remain without a benchmark from Wall Street. This usually leads to a decrease in trading volumes in Europe and Asia: many investors prefer to maintain a wait-and-see position in the absence of American players. Additionally, a holiday also falls on Canada and several CIS markets (for example, Kazakhstan is not trading today in honor of Constitution Day), collectively reducing activity in the stock and currency markets.
The last session of August showed a prevalence of cautious sentiments. On Friday, major stock indices declined at the end of trading. The American S&P 500 dropped approximately 0.6%. The sell-off was attributed to a combination of factors: uncertainty surrounding EU sanctions, contradictory inflation data, and simply the desire to partially liquidate positions before the long weekend. Asian markets closed the week mixed. The Japanese Nikkei 225 fell slightly (by 0.3%) affected by profit-taking after a rally and caution before news from China. Meanwhile, Chinese markets (Shanghai Composite, Hang Seng) demonstrated slight growth (around +0.3% each), supported by expectations of new stimuli from the Chinese government. The Russian market also corrected downward: the Moscow Exchange index lost less than 1% in a day, yet remained close to annual maximums.
The absence of trading in New York today means that market movement will be determined by local news. European investors are responding to the PMI releases this morning: an improvement in manufacturing sentiments supports selected sectors (auto, equipment manufacturing), allowing the DAX to potentially recover some of Friday's losses. On the other hand, low liquidity and the approach of key events for the week (US factory orders data will be released tomorrow, followed by important corporate earnings) may keep indices within a narrow range. Morning trading in Asia proceeded without a unified dynamic: strong numbers from India and stability in Japan worked in favor of local indices, while weakness in the Chinese PMI (if confirmed) restrained growth on the Hong Kong Stock Exchange. The currency market also remains relatively calm—the dollar index is consolidating after recent strengthening, the euro is balancing around $1.08, reacting to data and awaiting Lagarde's speech. The ruble shows moderate strengthening in morning trading, benefiting from rising oil prices above $85 per barrel and tax payments at the end of the month, although the overall situation with the Russian currency remains volatile. In general, the beginning of September is marked by caution: investors are evaluating new macro information, but they are not making significant moves until key market players return after the holiday.
Corporate Reporting: Quiet Start to the Week
On the corporate front, Monday promises to be relatively calm. The main quarterly earnings season is now behind us, and with no trading in the US, large companies prefer not to release results. However, a few reports are still worth mentioning. Specifically, one of the largest jewelry retailers in the world—American Signet Jewelers—will present its financial results for the last quarter today. This company (owner of the Kay, Zales, and Jared brands) will indicate consumer demand for luxury goods in the US. Investors are awaiting signals regarding sales dynamics for jewelry: steady revenues will indicate American households' spending power even amid rising rates and inflation, while decreased demand could signal growing consumer caution. Signet's results will also provide benchmarks for the entire retail sector—impacting short-term dynamics of competing stocks and suppliers (for instance, diamond manufacturers).
In Europe and Asia, no major reports are scheduled today, so the impact of corporate news on the markets will be minimal. However, this calm is only temporary. Tomorrow and in the following days of the week, investors should expect a series of important publications from leading public companies. On Tuesday, reports will be released by the cybersecurity cloud service Zscaler and the Chinese electric vehicle manufacturer NIO—their results will set the tone for the technology and automotive sectors. On Wednesday, the baton will be passed to retail giant Dollar Tree and business software developer Salesforce.com, while Thursday's focus will be on the semiconductor leader Broadcom and luxury sportswear brand Lululemon. Each of these companies is among the indicators of their sectors, and their financial performance and forecasts could locally influence their respective market segments. For example, strong results from Salesforce would bolster confidence in demand for cloud technologies and support the entire IT sector, whereas any signs of weakness in Broadcom's sales could trigger sell-offs across the semiconductor sector worldwide.
Thus, Monday, September 1, serves as a transition day between the concluded earnings season and a new wave of corporate news. Investors are using this pause to reassess their positions: analyze the already released earnings data, verify the fairness of current company valuations, and prepare for upcoming releases. While today may not feature any big names, the overall picture—combining moderately positive macro statistics and the absence of negative surprises from businesses—creates a favorable backdrop for maintaining interest in risk assets. If any company unexpectedly releases results or important news during the day, the market reaction may be amplified due to the low news backdrop. For now, the lack of significant corporate events allows investors to focus on macroeconomic signals and geopolitical factors, shaping their strategies for the upcoming autumn.
Monetary Policy: ECB President Lagarde's Speech
The highlight of the day will be the evening speech by European Central Bank President Christine Lagarde, scheduled for 20:30 Moscow time. For market participants, this presents an opportunity to hear a firsthand assessment of the economic situation in the Eurozone and, potentially, hints about future steps from the regulator. In the last ECB meeting in July, the rate was raised to 4.25%, and there is currently an active discussion on whether the Central Bank will continue to tighten policy in the fall or pause amid declining inflation. Given the latest data (slowing price growth in several countries, stabilization in manufacturing, yet a still strong labor market), Lagarde's position may be balanced. If in her speech she emphasizes that inflation, although decreasing, remains above the 2% target and therefore the ECB "will act decisively until inflationary pressures are defeated," the markets will interpret this as a signal for possible further rate hikes. In such a scenario, one could expect rising Eurozone bond yields and a slight strengthening of the euro—investors would be pricing in a more hawkish scenario. Conversely, EU stock indices may react in a restrained-negative manner, as high borrowing costs stifle economic growth and corporate profits.
An alternative scenario could see Lagarde emphasizing signs of economic cooling and progress in the fight against inflation. For example, she may note that core inflation has begun to gradually decline, and the overall PMI index is returning to growth, indicating a balance of risks. In such a case, the rhetoric may tilt towards a softer approach: the ECB would be ready to "pull back on the brakes" less aggressively, closely monitoring further data. Investors would interpret such comments as a hint at a pause in rate hikes (at least at the next meeting). This could trigger a rally in the bond market (yields would go down on expectations of a relaxed ECB stance), and European stocks would receive support—especially interest-sensitive sectors like real estate and highly liquid technology companies. In this case, the euro may slightly weaken against the dollar, as the US-Europe interest rate differential would remain in favor of America longer.
In addition to Lagarde, other representatives of regulators will also speak throughout the day. ECB officials Isabel Schnabel and Piero Cipollone plan to provide comments—though their words typically carry less significance than those of the Bank President. Nevertheless, any divergences within the ECB (for instance, Schnabel's more hawkish rhetoric, known for her commitment to fighting inflation) could create short-term volatility in the euro bond market. Overall, investors are concluding the day in anticipation of signals from monetary authorities. The statements made will help them adjust their forecasts regarding rates and asset management strategies this fall. With just under two weeks remaining until the ECB's September meeting, every word from Lagarde is under close scrutiny—the interpretation of her comments will determine the direction of European markets in the coming days.
