TradFi Weekly Recap September 07 - September 11

PPI Surges 5.4% Year-on-Year as Inflationary Pressure Reaccelerates; Oil Breaks Above $100: Key Volatility Ahead for the Dollar, Yields and Gold

I. Weekly Market Summary

This week, market attention centered on the acceleration in the U.S. Producer Price Index (PPI) and the sharp rise in international oil prices driven by escalating geopolitical risks in the Middle East.

U.S. PPI increased 0.4% month-on-month in August, in line with market expectations. The annual growth rate rose to 5.4%, up from 4.8% in July, indicating a renewed increase in price pressures at the production and wholesale levels. By component, energy prices rose 4.2%, becoming the main driver of the PPI increase. Prices for goods produced rose 1.1%, food prices edged up 0.1%, and service prices increased 0.1%.

Following the PPI release, markets raised expectations that the Federal Reserve could maintain its restrictive policy stance or even deliver another rate hike. According to the CME FedWatch Tool, the probability that traders expect at least a 25-basis-point rate hike rose above 70%. The U.S. 2-year Treasury yield climbed to approximately 4.516%, its highest level since 2024, while the 10-year Treasury yield approached 4.92%, moving closer to the closely watched psychological threshold of 5%.

Overall, markets were influenced by two major forces this week: “reaccelerating inflation” and “heightened supply risks.” Rising yields and a stronger dollar pressured high-valuation technology stocks and gold. However, higher oil prices and geopolitical risks also increased demand for gold as a safe-haven asset. XAUUSD is therefore facing a tug-of-war between interest-rate pressure and safe-haven buying, and volatility could increase significantly going forward.

II. Key Market Themes This Week

August PPI Rises 5.4% Year-on-Year, with Energy Prices as the Main Driver

The most important signal from this PPI report was the increase in annual growth from 4.8% to 5.4%, indicating that price pressures at the U.S. production and wholesale levels are beginning to build again.

Indicator	August Data	Previous / Market Expectations	Market Significance
PPI month-on-month growth	0.40%	Expected 0.4%	In line with expectations
PPI year-on-year growth	5.40%	Previous: 4.8%	Inflationary pressure increased significantly
Energy prices	Up 4.20%	—	Main contributor to the PPI increase
Food prices	Up 0.10%	—	Relatively moderate price pressure
Producer prices for goods	Up 1.10%	—	Higher costs on the goods side
Service prices	Up 0.10%	—	No significant acceleration in service inflation yet

Higher energy prices may be passed through to consumer prices via transportation, manufacturing and service-related costs. In particular, the rapid increase in oil prices could further raise corporate costs and revive market expectations for future CPI and PCE inflation.

However, PPI does not mean that all production-side price pressures will be fully passed on to consumers. Companies may absorb part of the increase through lower profit margins, inventory adjustments or delayed price increases. Therefore, CPI, core PCE, wage growth and consumer spending data will remain important in determining whether inflation has become broad-based.

Assets to watch: DXY, US10Y, US02Y, US500, NAS100 and XAUUSD

Rate-Hike Expectations Rise as Treasury Yields Approach 5%

The stronger-than-expected annual PPI growth prompted markets to reassess the Federal Reserve’s policy path. If energy prices continue rising and inflation expectations pass through to consumers, the Fed may need to keep policy rates restrictive for longer or adopt an even more hawkish stance.

Treasury yields moved notably higher this week:

- The 2-year Treasury yield rose to approximately 4.516%;

- The 10-year Treasury yield approached 4.92%;

- Long-term yields moved closer to the psychological threshold of 5%;

- High-valuation technology and semiconductor stocks came under significant pressure.

Short-term yields primarily reflect expectations for the Fed’s policy rate, while long-term yields are also influenced by inflation expectations, fiscal supply, economic growth and the term premium. Therefore, even if the government uses measures such as Treasury buybacks to adjust market liquidity, these actions may not immediately reverse the upward trend in long-term yields.

If the 10-year yield breaks decisively above 5%, the discount rate applied to equities could rise further, putting pressure on high price-to-earnings multiples. Conversely, if profit-taking emerges around the 5% level, U.S. equities and gold could stage a technical rebound.

Assets to watch: US10Y, US02Y, DXY, NAS100, US500 and US30

Tanker Attacks Lift Safe-Haven Demand as Brent Crude Breaks Above $100

The oil market was driven higher this week by rising geopolitical risks in the Middle East and concerns over potential supply disruptions. Both Brent and WTI crude recorded daily gains of more than 6%.

The rise in oil prices mainly reflected the following factors:

1. Escalation of the Middle East conflict:Markets are concerned that the conflict could spread to additional oil-producing countries, ports or energy infrastructure.

2. Attacks on oil tankers and energy facilities:Attacks on vessels could force shipping companies to reroute, increasing insurance premiums, freight costs and delivery expenses.

3. Higher shipping risks in the Bab el-Mandeb Strait and the Red Sea:Disruptions to key shipping routes could extend transportation times and increase supply-chain uncertainty.

4. Increased Chinese crude oil purchases:If Chinese demand recovers while global crude inventories decline, the price impact of any supply disruption could be amplified.

5. Changes in Saudi oil production:If production recovers more slowly than expected, the amount of crude available for global exports could contract further.

Brent crude’s move back above $100 per barrel has important psychological and technical significance. If prices remain above $100, bulls may attempt to challenge the $107–$108 area. A decisive breakout could open the way toward $110, and potentially toward the previous wartime high near $126.

However, crude oil is a highly event-driven asset. If a ceasefire emerges, shipping conditions normalize or markets confirm that actual supply has not been materially affected, the geopolitical risk premium embedded in oil prices could unwind rapidly.

Assets to watch: UKOUSD, USOUSD, XAUUSD, US500 and DXY

XAUUSD Faces a Tug-of-War Between Yield Pressure and Safe-Haven Demand

Gold’s trading logic this week has been relatively complex. Higher PPI and oil prices lifted the dollar and Treasury yields, creating headwinds for gold. At the same time, rising geopolitical tensions and inflation concerns could increase demand for gold as a safe-haven and store-of-value asset.

Rising Yields Pressure Gold

Gold does not generate interest income. When U.S. nominal and real yields rise, the opportunity cost of holding gold increases, encouraging some capital to move toward the dollar and U.S. Treasuries.

If markets believe that higher PPI will pass through to CPI and PCE inflation and encourage the Fed to maintain high interest rates for longer, the dollar and yields could rise together, putting XAUUSD under correction pressure.

Inflation and Geopolitical Risks Support Safe-Haven Buying

On the other hand, higher oil prices may increase concerns about uncontrolled inflation, slower economic growth and stagflation. If the Middle East conflict continues to escalate, shipping security deteriorates or volatility across equity and bond markets increases, investors may increase their gold exposure. This could partially offset the pressure from higher interest rates.

Therefore, the key to gold’s outlook is not simply the direction of yields, but also the following signals:

- Whether the dollar rises in tandem with Treasury yields;

- Whether real yields continue to move higher;

- Whether geopolitical risks escalate further;

- Whether higher oil prices push up inflation expectations;

- Whether gold attracts buying interest near key support zones.

Assets to watch: XAUUSD, DXY, US10Y, UKOUSD and USOUSD

III. Major Asset Review and Trading Logic

Equity Index CFDs（US500 / NAS100 / US30）

U.S. equities were primarily pressured this week by the combination of “rising inflation” and “higher yields.”

NAS100 remains the most sensitive to interest-rate movements. If the 10-year Treasury yield approaches or breaks above 5%, the discount rate applied to high-valuation technology and semiconductor stocks will rise further, potentially leading to greater volatility and selling pressure in NAS100.

The performance of US500 will depend on whether declines in technology stocks can be offset by energy, financial and traditional industrial sectors. Higher oil prices are positive for the revenue outlook of energy companies, but if elevated energy costs push up inflation and weaken consumption, the broader corporate earnings outlook could still deteriorate.

US30 has greater exposure to value-oriented and traditional industries and is less rate-sensitive than NAS100 in the short term. However, if markets begin to worry that high oil prices will weigh on economic growth, industrial, consumer and transportation stocks could also come under pressure.

Trading focus:

- A break above 5% in the 10-year Treasury yield would be negative for NAS100;

- Rising oil prices combined with higher yields could increase equity-index volatility;

- Stronger energy stocks alongside weaker technology stocks could lead to internal rotation within US500;

- If yields retreat from elevated levels, NAS100 could stage a stronger technical rebound;

- During event-driven markets, traders should monitor the risk of gaps between U.S. equity futures and the cash-market open.

Foreign Exchange Market（DXY / USDJPY / EURUSD）

The rise in annual PPI growth and stronger rate-hike expectations are supportive of the dollar in the short term. If U.S. 2-year and 10-year yields continue to rise, DXY could remain supported, while EURUSD may face pressure from widening U.S.-European interest-rate differentials.

For USDJPY, Treasury yields and the U.S.-Japan rate differential remain the main drivers. If the dollar and U.S. yields rise together, USDJPY could extend its advance. However, if the exchange rate approaches elevated levels, traders should remain alert to potential policy responses from Japanese authorities to rapid depreciation and the possibility of sharp reversals caused by intervention risks.

If subsequent CPI or PCE data comes in below expectations, markets may reduce rate-hike bets and the dollar could face profit-taking. If geopolitical tensions cause global risk appetite to deteriorate, the dollar could nevertheless remain strong due to safe-haven and liquidity demand.

Trading focus:

- Strong PPI and rising yields: supportive of DXY and USDJPY;

- Cooler CPI or PCE: could weigh on the dollar and support EURUSD;

- A sharp rise in oil prices could lift U.S. inflation expectations and support dollar-rate trades;

- During periods of deteriorating risk sentiment, the dollar and gold may rise simultaneously in the short term;

- High-level USDJPY trading requires close attention to intervention and liquidity risks.

Commodities Market (XAUUSD / UKOUSD）

XAUUSD

If the dollar and real yields rise together, gold is likely to remain under short-term pressure. If markets begin pricing in stagflation, financial-market volatility or geopolitical safe-haven demand, gold could regain support.

Traders can monitor XAUUSD’s reaction around previous highs, major psychological levels and short- to medium-term moving averages. RSI, volatility and trading volume can also be used to assess whether a breakout has sufficient momentum to continue.

UKOUSD

Brent crude has moved back above $100, and short-term bullish momentum remains strong. If $100 changes from resistance into support, prices could challenge the $107–$108 area. A decisive breakout could open the way toward $110 and higher levels.

However, if geopolitical risks ease or markets confirm that supply has not been materially affected, oil prices could quickly give back their risk premium. The area below $100 remains an important level for monitoring the bullish structure.

IV. Conclusion

The core market theme this week was: U.S. PPI rose 5.4% year-on-year, energy prices increased sharply, and escalating geopolitical risks in the Middle East caused markets to become more alert to both rate-hike risks and potential supply disruptions.

August PPI rose 0.4% month-on-month and 5.4% year-on-year, while energy prices increased 4.2%, indicating a renewed acceleration in production-side inflation. Following the release, expectations for at least a 25-basis-point Fed rate hike increased. The U.S. 2-year Treasury yield rose to approximately 4.516%, while the 10-year yield approached 4.92%, moving progressively closer to the psychological threshold of 5%.

At the same time, tanker attacks and shipping risks around the Bab el-Mandeb Strait and the Red Sea pushed crude oil sharply higher. Brent crude rose to $107.63, while WTI crude climbed to $102.48, with both benchmarks breaking above $100 per barrel.

If the dollar and real yields rise together, gold could face correction pressure. If geopolitical risks continue to escalate, however, XAUUSD could find support from safe-haven demand. For crude oil, $100 will remain an important dividing line between bullish and bearish forces. The next phase of the market will depend on whether the conflict expands, whether shipping routes are disrupted, and how global supply, demand and inventories evolve.

💡 Capture Market Volatility in Inflation, Interest Rates and Energy

To follow market opportunities driven by PPI, CPI, PCE, Federal Reserve policy and geopolitical developments in the Middle East, visit Bitget CFD to monitor and trade XAUUSD, UKOUSD, USOUSD, equity indices and foreign exchange products.

During major economic releases, Federal Reserve officials’ speeches and geopolitical events, markets may experience sudden price spikes and declines, wider spreads, reduced liquidity and price gaps. CFDs are leveraged products, meaning both potential gains and losses may be amplified. Before trading, carefully assess margin levels, position size, stop-loss distance and overnight risk.

All trading education provided by Bitget is for educational purposes only and should not be considered financial advice. The strategies and examples shared are for reference only and may not reflect actual market conditions. CFD trading involves significant risk, including the potential loss of capital. Past performance does not guarantee future results. Please conduct thorough research and ensure that you understand the risks involved. Bitget is not responsible for any trading decisions made by users.