First Light News: Trump-Putin Meeting; US Retail Sales Data Eyed

The July US PPI inflation data (Producer Price Index) rose at both headline and core levels.

MM saw wholesale prices rise by 0.9% at the headline and core, after showing no change in June, respectively. YY, headline rose by 3.3%, up from an upwardly revised 2.4%, with YY core also rising by 3.7%, up from 2.6%.

Both the July CPI report (Consumer Price Index) released earlier this week – which came in largely as expected – and yesterday’s PPI numbers show that businesses are shouldering the majority of the tariff burden at the moment, rather than raising prices for the end consumer. Of note, both CPI and PPI numbers feed into PCE data (Personal Consumption Expenditures), which will be released later this month and is what the US Federal Reserve (Fed) targets for inflation.

The S&P 500 was largely unchanged (0.03%) yesterday to mark a fresh closing level of 6,468. However, the Nasdaq 100 dipped 16 points (0.1%) to 23,832, and the Dow Jones fell 11 points (0.02%) to 4,4911. Ultimately, I do not expect the latest PPI data to deter the Fed from easing policy. Still, I cannot imagine a 50 basis point (bp) cut materialising, something US Treasury Secretary Scott Bessent recently called for. Money markets show investors modestly trimmed Fed rate-cut bets following the wholesale inflation release; 57 basis points (bps) of easing continues to be priced in for the year-end, and 23 bps for next month’s meeting. So, we are still very much on track for a rate cut in September.

The July US retail sales figures will make the airwaves later today, along with consumer sentiment metrics from the University of Michigan for August, with the latter expected to hold relatively steady. Economists expect retail sales to rise by 0.5%, slightly lower than the 0.6% in June, though be aware that the forecast range spans a high of 1.4% and a low of 0.0%. Excluding autos, retail sales are expected to have risen by 0.3%, down from 0.5%.

UK GDP Data Shows the Economy Is Still Growing

The preliminary June UK GDP growth data (Gross Domestic Product) showed that the economy held up in Q2 2025, growing by 0.3% amid support from government consumption. However, despite a modest bid in the British +9 (GBP), the data were lower than markets had anticipated (0.1%) and marked a slowdown in economic activity from Q1 (0.7%).

Despite the recent data, the economy is still growing at this point, and price pressures recently rose to their highest since the beginning of 2024. Even with a loosening jobs market, I do not see the Bank of England (BoE) rushing to trim the bank rate again.

However, the issue in the UK right now is largely centred on fiscal concerns; the Autumn budget is nearing, with expectations of increased taxes/spending cuts to weigh on economic activity. Consequently, the outlook for economic growth at the tail end of this year is unlikely to be a pretty picture.

In Other News

US President Donald Trump is expected to meet with Russian President Vladimir Putin in Anchorage, Alaska, today in a bid to end the war between Russia and Ukraine. This is the first face-to-face meeting between Trump and Putin in six years.

Putin seeks international recognition and legitimacy, wanting to demonstrate that Western isolation efforts have failed while securing territorial gains in Ukraine – specifically keeping all occupied Ukrainian lands in the four regions Russia has seized. Trump, on the other hand, is looking for an opportunity to fulfil his campaign promise of being a peacemaker and potentially claim progress toward ending the conflict. However, his shifting positions make his exact goals unclear. Time will tell if this Alaska summit produces genuine progress.

As far as I am aware, Trump is expected to leave the White House at around midday today (GMT) for Alaska, and discussions are estimated to begin in the evening.

Written by FP Markets Chief Market Analyst Aaron Hill