The European Central Bank (ECB) announced its interest rate decision on Thursday at the conclusion of its September 10–11 meeting, leaving rates unchanged at 2.15% — the lowest level since October 2022 — in line with most global market expectations, marking a second consecutive hold.

Policymakers at the ECB believe there is no need for further rate cuts to achieve the 2% inflation target, despite new economic projections pointing to a decline in interest rates over the next two years.

This statement is considered “positive” for the euro.

US stock indexes climbed to fresh record highs on Thursday after the release of key inflation data, which, despite showing an increase, did not deter investors from expecting the Federal Reserve to cut rates this month.

Government data released in the United States today showed the consumer price index (CPI) rising by 0.4% in August, above forecasts of 0.3%. The annual reading came in at 2.9%, in line with expectations.

Excluding volatile items such as food and energy, core CPI rose by 0.3% month-on-month and 3.1% year-on-year, both consistent with forecasts.

This followed producer price index (PPI) data showing an unexpected 0.1% decline and a 2.6% year-on-year increase.

Additional data revealed that weekly jobless claims jumped by 27,000 last week to 263,000, exceeding expectations of 235,000.

Despite this data, market expectations remain that the Federal Reserve will cut interest rates by 25 basis points at its September 17 meeting, according to the CME FedWatch tool, while traders slightly raised bets on a larger 50-basis-point cut.

In trading, by 16:38 GMT, the Dow Jones Industrial Average jumped 1.3% (573 points) to 46,064. The broader S&P 500 index gained 0.8% (50 points) to 6,582, while the Nasdaq Composite rose 0.7% (148 points) to 22,034.

Nickel prices fell on Thursday despite a weaker US dollar against most major currencies, as bets on Federal Reserve interest rate cuts continued. The Russia-Ukraine war also weighed on metals markets, with Russia being one of the world’s largest producers of industrial metals.

The administration of US President Donald Trump is pressuring Russia by tightening economic sanctions in an effort to reach a ceasefire agreement in Ukraine.

Meanwhile, the dollar index fell 0.3% to 97.5 points by 16:19 GMT, after reaching a high of 98.09 and a low of 97.4.

Economic data came in mixed. The US consumer price index (CPI) for August rose 0.4% month-on-month, above forecasts of 0.3%, according to the Bureau of Labor Statistics. The annual rate was 2.9%, in line with economists’ expectations.

Core CPI, which excludes volatile food and energy prices, rose 0.3% on a monthly basis and 3.1% annually, both matching Dow Jones forecasts.

This report followed Wednesday’s producer price index (PPI) data, which showed an unexpected 0.1% monthly decline, while the annual rate was up 2.6%.

In other data on Thursday, weekly jobless claims posted a surprise jump, rising by 27,000 to 263,000 in the week ending September 6 after seasonal adjustments. That exceeded forecasts of 235,000.

Despite this data, traders still expect the Federal Reserve to cut rates by 25 basis points at its September 17 meeting, according to the CME FedWatch tool, while slightly increasing bets on a larger 50-basis-point cut.

In trading, spot nickel contracts fell 0.4% to $15,003 per ton as of 16:29 GMT.

Bitcoin rose on Thursday morning, breaking above $114,000, supported by weaker-than-expected US inflation data and stronger institutional inflows into spot exchange-traded funds (Spot ETFs).

The cryptocurrency jumped after the US Producer Price Index (PPI) showed wholesale inflation slowing in August, with prices down 0.1% month-on-month and easing to 2.6% year-on-year. This unexpected drop in PPI opened the door for risk assets, pushing Bitcoin firmly through the $113,000 level.

According to CoinGecko data, Bitcoin was trading at $114,100 at the time of writing, up more than 2% on Thursday.

The broader cryptocurrency market also advanced, with total market capitalization rising 1.5% to $4.06 trillion.

Ethereum (ETH-USD) followed Bitcoin higher, trading above $4,440 in early dealings, supported by investor appetite for ETFs and on-chain accumulation.

Timothy Messer, Head of Research at BRN, said: “The downside PPI surprise was a clear catalyst, sending Bitcoin to $114,000 and accelerating institutional inflows. The market is now at a crossroads: if CPI comes in weaker than expected, momentum is likely to continue with volatility compressing. But if CPI surprises to the upside, rapid risk-off moves will follow.”

Institutional flows into spot Bitcoin ETFs highlighted this sentiment shift. Bitcoin funds attracted $757 million in net inflows on September 10, marking a third consecutive day of gains, according to BRN data.

Ethereum funds also saw $172 million in inflows, while blockchain infrastructure firm Bitmine added 46,255 ETH (worth about $201 million) to its holdings, bringing its total to more than 2.1 million ETH ($9.24 billion).

In derivatives markets, traders showed greater risk appetite. Open interest in Bitcoin futures climbed to $84.86 billion, while forced liquidations fell to $37.96 million, mostly from short sellers. Total futures trading volume rose to about $53 billion, reflecting strong participation from both traditional investors and leveraged traders.

Focus on US CPI Data

Traders are now eyeing the US consumer price index (CPI) release on Thursday to test momentum. A second weak inflation print could reinforce bets on three Fed rate cuts between now and year-end. A stronger-than-expected reading, however, could flip Bitcoin ETF flows negative and renew pressure on risk assets.

Fed Decision Looms

Further deterioration in July and August labor market data has left the Fed under pressure to cut rates, while core inflation remains above 3%, conflicting with the central bank’s dual mandate.

As a result, investors expect the Fed to stimulate the economy with a larger-than-expected rate cut. While markets have already priced in a quarter-point cut, speculators are betting on a half-point move, which may explain the strong ETF inflows into Bitcoin, according to Stephen Gregory, founder of trading platform Vtrader.

The CME FedWatch tool shows a 92% probability of a 25-basis-point cut, versus just 8% for a 50-basis-point move. On Myriad, the prediction platform run by DASTAN (parent company of Decrypt), users put the probability of a 25-basis-point cut at 80%.