FILE PHOTO: The exterior of the Marriner S. Eccles Federal Reserve Board Building is seen in Washington, D.C., U.S., June 14, 2022. REUTERS/Sarah Silbiger/File Photo

By Mike Dolan

LONDON (Reuters) - What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial Markets, Reuters Open Interest

Global equities rose early on Wednesday as bets for a Federal Reserve rate cut next week solidified following more bad news on the U.S. jobs front. Traders’ attention will now turn to U.S. producer and consumer inflation data releases set for today and tomorrow. While hot prints could create some noise in rates market, few expect anything to significantly alter the Fed’s plans for next week.

* Markets are fully pricing in a 25-basis-point Fed cut onSept. 17, and the likelihood of a half-point move has risenafter the release of more gloomy employment data. The LaborDepartment on Tuesday said U.S. job growth was overstated by911,000 in the 12 months through March, which suggests thatlabor market momentum has been fading for longer than previouslythought. Two-year Treasury yields are hovering near 3.55%, while10-year yields ticked up to 4.09%. Gold hit a record high$3,673.95 per ounce on Tuesday before pulling back, though ithas been rising again early on Wednesday. * Europe’s STOXX 600 rose slightly early on Wednesday, ledby retailers after Spanish fast-fashion giant Inditex surged onnews of strong sales momentum ahead of the autumn quarter.Meanwhile, French bond yields held steady after French PresidentEmmanuel Macron named Sebastien Lecornu as prime minister. Theselection of Lecornu, a one-time conservative protege, suggestedthat Macron is seeking to press on with a minority governmentthat will not abandon his pro-business reform agenda. * Global oil benchmarks rose after Israel struck Hamasleadership in Qatar on Tuesday. Brent crude was trading shy of$67 early on Wednesday, while WTI was hovering above $63.However, events in the Middle East have had a limited impact onoil prices over the past two years, and there is little reasonto believe the latest move will be any different.

In today’s column, I explain why stablecoins could entrench U.S. dollar dominance and why that is worrying regulators.

Today's Market Minute

* Poland shot down drones that entered its airspace duringa widespread Russian attack in western Ukraine on Wednesday,with the NATO member calling the incursion "an act ofaggression" and marking the first time a member of the alliancehas fired shots in the war. * U.S. President Donald Trump urged EU officials on Tuesdayto hit China with tariffs of up to 100% as part of a strategy topressure Russian President Vladimir Putin, according to a U.S.official and an EU diplomat. * A federal judge on Tuesday temporarily blocked PresidentDonald Trump from removing Federal Reserve Governor Lisa Cook,an early setback for the White House in an unprecedented legalbattle that could upend the central bank's long-heldindependence. * The Federal Reserve is widely expected to cut interestrates next week even though inflation is still around 3%, a fullpercentage point above the official goal. This raises anuncomfortable question, writes ROI columnist Jamie McGeever: isthe central bank's 2% inflation target still viable? * Nearly four years after Europe’s energy crisis erupted inlate 2021, the continent has moved from emergency response tosystem redesign. But, writes the Center for the Study ofDemocracy’s Martin Vladimirov, the European Union is not out ofthe woods. Deep vulnerabilities persist, and progress towardclean, secure and affordable supply is highly uneven across thecontinent.

Chart of the day

Gold prices have risen almost 40% so far this year, following a 27% jump in 2024. This years’ spike has been driven by a weak dollar, strong central bank purchases, expectations of dovish monetary policy and rising geopolitical uncertainty. ROI markets columnist Jamie McGeever recently argued that central bank’s gold accumulation may be unstoppable.

Today's events to watch

* U.S. PPI (August) (8:30 AM ET) * U.S. Treasury auctions $39 billion of 10-year notes

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(By Mike Dolan)