InvestMacro

On Monday, the Dow Jones (US30) fell by 0.08%, and the S&P 500 (US500) dropped by 0.01%. The technology-focused Nasdaq (US100) closed slightly higher, up 0.01%. US equities showed mixed performance amid growing geopolitical concerns. European leaders and the President of Ukraine met with US President Trump in Washington to discuss potential terms for ending the Russian-Ukrainian war. The outcome could have significant macroeconomic consequences for tariffs and oil prices, and it could also profoundly affect European security.

European stock markets saw mixed movement on Monday. Germany’s DAX (DE40) declined by 0.18%, France’s CAC 40 (FR 40) was down by 0.50%, Spain’s IBEX35 (ES35) fell by 0.17%, and the UK’s FTSE 100 (UK100) closed up 0.21%.

European equities closed slightly lower overall as markets avoided risky assets in anticipation of a week of events that could shift the geopolitical landscape and the global rate outlook. Federal Reserve Chair Jerome Powell may offer guidance on the interest rate outlook at the Jackson Hole symposium, as softer labor market data has strengthened the position of dissenting voices within the FOMC. Meanwhile, Ukrainian President Zelenskyy and European leaders were scheduled to meet with US President Trump in Washington to discuss a potential peace agreement.

WTI crude oil prices rose by 1% to reach $63.4 a barrel on Monday following the Washington talks between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy, which took place after an inconclusive US-Russia summit in Alaska last Friday. Investors are closely monitoring the potential impact of the talks on global oil supply, including possible changes in sanctions or moves toward reconciliation. Concerns over energy flows were reignited after White House advisor Peter Navarro criticized India’s purchases of Russian oil.

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by 0.77%, China’s FTSE China A50 (CHA50) climbed 0.50%, Hong Kong’s Hang Seng (HK50) fell by 0.37%, and Australia’s ASX 200 (AU200) closed with a positive result of 0.23%.

On Tuesday, the New Zealand dollar fluctuated around the $0.593 mark, staying in a narrow range as traders awaited the RBNZ’s rate decision. Markets have already priced in a potential 25 basis point rate cut to 3%, which would extend the current easing cycle to 250 basis points. Supporting a further easing is a 0.6% quarter-over-quarter rise in producer prices in Q2, which fell short of the 1% growth expected and was down from a 2.1% increase in Q1. Analysts, however, note that policy settings are close to neutral, and the effects of previous cuts are still working their way through the economy.

The offshore yuan held near 7.19 per dollar on Tuesday, trading within a tight range as the market’s focus shifted to the US Federal Reserve’s Jackson Hole symposium later this week for clues on policy direction and potential impacts on global currencies. Markets were watching the dollar amid expectations of a Fed pivot, with the probability of a 25 basis point rate cut in September now at 84%, down from 98% last week following stronger US wholesale and retail trade data, which tempered hopes for a more significant move. In China, markets are now awaiting this week’s loan prime rate decision, with expectations leaning toward the rate remaining unchanged.

The Westpac-Melbourne Institute Australian Consumer Sentiment Index rose by 5.7% in August 2025 to 98.5, its highest level since February 2022. Sentiment was boosted by the Reserve Bank’s 75 basis point rate cut since January and a more optimistic policy tone. The head of Australian macro expectations said that a long period of consumer pessimism may be ending, though additional easing might be needed to maintain momentum. However, he noted that policymakers are not in urgent need of further cuts.

At the close on Tuesday, the Dow Jones Index (US30) fell by 0.02%. The S&P 500 Index (US500) gained 0.03%, and the tech-heavy Nasdaq (US100) closed down 0.07%. Higher-than-expected wholesale inflation data dampened optimism for a significant Federal Reserve rate cut in September. The July Producer Price Index surged 0.9% month-over-month, the biggest increase in three years, and was up 3.3% year-over-year, which was significantly higher than the 0.2% expectations. Despite the inflation surprise, markets were still pricing in an 85-91% probability of a September rate cut, though expectations for a 50-basis-point change disappeared.

The Trump administration is in talks with Intel about a potential US government acquisition of a stake in the struggling chipmaker. The talks followed a meeting this week between President Donald Trump and Intel CEO Lip-Bu Tan, which came just days after Trump publicly demanded that Tan resign over his investments in Chinese technology companies, some of which are linked to the Chinese military. Details on the size and price of the stake are still being negotiated. A deal could provide Intel with fresh capital to support its long-term turnaround efforts, as the former chipmaking leader has lost its dominant position in recent years. On Thursday, Intel stock rose by 7.4%.

The Mexican peso weakened to 18.8 per USD, near the month-low of 18.88 recorded earlier this month, amid a stronger US dollar combined with the Bank of Mexico’s recent policy easing and renewed tariff pressures. The sharp jump in US producer prices in July, the most significant in three years, reduced bets on an early Fed rate cut, which supported the dollar. Domestically, Banxico slowed its pace of easing but still cut rates by 25 basis points to 7.75% on August 7 in a split decision that acknowledged weak economic activity, currency volatility, and global trade risks. The move reduced the policy premium that had supported the peso and signaled that further small cuts could follow if disinflation continues.

European equity markets rallied strongly yesterday. The German DAX (DE40) rose by 0.79%, the French CAC 40 (FR40) closed up 0.84%, the Spanish IBEX35 (ES35) gained 1.24%, and the UK’s FTSE 100 (UK100) closed up 0.13%. Market sentiment was supported by favorable trade news and cautious optimism about an upcoming Trump-Putin summit, where a possible resolution to the situation in Ukraine is expected to be discussed. A European Commission spokesperson said today that it had received a “new text” from the US with proposals for a joint declaration on tariffs, which is expected to follow the main political agreement. Leading the gains were Rheinmetall (+2.8%), Airbus (+2.3%), and Allianz (+2.1%). Banks also showed solid growth, with Commerzbank and Deutsche Bank adding 1.8% and 1.6%, respectively.

WTI crude oil prices jumped 2.1% to close at $64 per barrel on Thursday, reaching a one-week high and snapping a two-day losing streak. The rise was driven by geopolitical tensions and expectations that a US interest rate cut next month could stimulate demand. Prices rose after President Trump warned of “serious consequences” if negotiations with Russian President Putin on Ukraine fail, adding a risk premium given Russia’s status as the world’s second-largest oil producer.

The US natural gas prices fell by 1.5% to $2.79/MMBtu, their lowest level since November 2024, after the EIA reported a significant increase in storage inventories. Utilities injected 56 billion cubic feet for the week ending August 8, bringing total storage to 3.186 trillion cubic feet, which is 6.6% above the five-year average and slightly higher than the expected 53 billion cubic feet increase.

Asian markets traded with mixed results yesterday. Japan’s Nikkei 225 (JP225) fell by 1.45%, China’s FTSE China A50 (CHA50) rose by 0.70%, Hong Kong’s Hang Seng (HK50) dropped 0.37%, and Australia’s ASX 200 (AU200) showed a positive result of 0.53%. Hong Kong stocks fell by 1.3% in early trading on Friday, extending losses for a second session, as most sectors declined, led by financials, technology, and consumer stocks. Sentiment weakened after July data from China showed that industrial production and retail sales growth missed expectations, highlighting slowing economic growth amid persistent external risks, weather-related disasters, and weak domestic demand. The surveyed unemployment rate also rose to a four-month high of 5.2%. Nevertheless, the Hang Seng is on track for its second consecutive weekly gain, currently up more than 1%, helped by the extension of the 90-day US-China trade truce this week.

The Dow Jones (US30) Index rose by 1.10% on Tuesday. The S&P 500 (US500) gained 1.13%. The tech-heavy Nasdaq (US100) closed up by 1.33%. Major Wall Street indices rallied on Tuesday, with the S&P 500 and Nasdaq hitting record highs, after July inflation data largely met expectations. The Consumer Price Index (CPI) rose by 0.2% month-over-month and 2.7% year-over-year, easing fears of rising prices amid ongoing trade tensions. This bolstered expectations for a Federal Reserve rate cut next month. Traders are pricing in an approximately 90% probability of a 25-basis-point rate cut in September. Investor sentiment was further boosted by the largest inflow into US stocks in two years and optimism ahead of the Jackson Hole Fed meeting later this month.

European stock markets traded with mixed performance yesterday. The German DAX (DE40) fell by 0.23%, the French CAC 40 (FR40) closed up by 0.71%, the Spanish IBEX35 (ES35) gained 0.02%, and the British FTSE 100 (UK100) closed up by 0.20%. The ZEW Economic Sentiment indicator for Germany declined for the first time in four months to 34.7 in August 2025, down from 52.7 in July, which was its highest reading since 2022, and below expectations of 40. The significant drop in the August 2025 ZEW indicator was partly due to the poor performance of the German economy in the second quarter of 2025.

WTI oil prices fell to $63.5 a barrel on Tuesday, close to the two-month low of $62.77 reached the previous week, as President Trump extended the US-China tariff truce for 90 days and investors awaited US-Russia talks on Ukraine. Trump downplayed hopes of a breakthrough, calling the meeting a chance to “test the waters” for peace, while Ukrainian President Zelenskyy rejected any talks of ceding territory. Separately, OPEC projected a tighter oil market for 2026, citing higher demand and slowing non-OPEC production growth. Attention will turn to the monthly reports from the US Department of Energy and the IEA for market insights.

The US natural gas prices (XNG/USD) fell below $2.9 per million British thermal units (mmBtu), their lowest since November 2024, pressured by near-record output, high storage levels, and expectations for milder weather. August production in the lower 48 states averaged 108.3 billion cubic feet per day (Bcf/d), up from the record July output of 107.9 Bcf/d. Despite a hotter-than-usual summer, the high supply has allowed for above-average injections into storage, and stockpiles are about 6% above the seasonal norm and are expected to continue rising.

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by 2.15%, China’s FTSE China A50 (CHA50) gained 0.88%, Hong Kong’s Hang Seng (HK50) was up 0.25%, and Australia’s ASX 200 (AU200) posted a positive result of 0.41%.

The Australian dollar weakened to $0.652 against the US dollar on Wednesday, giving up the previous session’s gains after a dovish rate cut by the Reserve Bank of Australia continued to weigh on the currency. On Tuesday, the central bank cut its official cash rate as expected and signaled that further easing may be needed to meet its inflation and employment goals amid a loss of economic momentum. It also lowered its 2025 GDP expectations to 1.7% from 2.1%, citing weak household demand at the start of the year that is unlikely to recover. Markets are now implying a slim 34% chance of another rate cut in September.

The Dow Jones Index (US30) rose by 0.47% on Friday (weekly gain +1.03%). The S&P 500 Index (US500) increased by 0.78% (weekly gain of +1.88%), while the Nasdaq (US100) finished the day 0.95% higher (weekly gain of +2.72%). Tech stocks led the rally, with Apple rising by 4.2% after announcing a $600 billion investment plan, which boosted the Nasdaq. Investor optimism was fueled by expectations of Federal Reserve rate cuts following President Trump’s nomination of Steven Mnuchin to the Fed Board, signaling a potential shift in monetary policy despite ongoing concerns about new tariffs on imports from several countries. Tesla shares rose by 2.3% despite the dissolution of its Dojo team, and Intel was up 0.9% after its CEO received board support following calls for his resignation from Trump.

Nvidia and AMD have agreed to a deal with the US government to share 15% of the revenue from certain chip sales to China in exchange for export licenses for Nvidia’s H20 and AMD’s MI308 chips. This unprecedented agreement reflects the White House’s strategic use of trade exceptions amid ongoing tariff pressure. President Trump’s recent threat to impose a 100% tariff on semiconductor imports unless companies “build in the United States” adds urgency to such agreements.

The Canadian dollar fell below $1.37 against the US dollar as weaker domestic employment data and looming trade factors undermined previous gains. A Statistics Canada report showing the country lost 41,000 jobs in July, far worse than the 13,500 gain analysts predicted, and a static unemployment rate of 6.9% heightened concerns about domestic demand and fueled expectations for a more dovish Bank of Canada. Meanwhile, President Trump’s decision to implement 35% tariffs on Canadian aluminum and impending duties on auto parts have added to the pressure on the trade-exposed Canadian economy.

European stock markets were mixed on Friday. Germany’s DAX (DE40) fell by 0.12% (weekly gain +2.72%), France’s CAC 40 (FR40) closed up 0.44% (weekly gain +2.11%), Spain’s IBEX35 (ES35) gained 0.91% (weekly gain +4.55%), and the UK’s FTSE 100 (UK100) closed down 0.06% (weekly gain +0.30%). European stocks ended the week with a strong rally, posting a sharp rise in the first week of August as markets continued to assess the outlook for the European economy amid uncertainty over US tariff levels and the ECB’s response. Banks continued to rise sharply, with BBVA, BNP Paribas, and UniCredit all gaining more than 2%. Siemens was up 2.2% after a volatile week, and Volkswagen, Mercedes-Benz, and Stellantis each added more than 2%, setting the pace for automakers. On the other hand, Rheinmetall lost 1.5% on reports that the US and Russia might agree on a ceasefire in Ukraine.

WTI crude oil prices were flat on Friday at $63.9 per barrel, holding near a two-month low and showing a weekly drop of more than 5% amid growing fears of higher US tariffs and a possible meeting between Presidents Trump and Putin. The recently implemented US tariffs, which took effect on Thursday, have intensified concerns about slowing economic growth and a potential decline in demand for crude oil. Meanwhile, news of a possible Trump-Putin summit raised hopes for a diplomatic resolution to the conflict in Ukraine, which could ease sanctions on Russia. However, analysts remain cautious, stressing that a breakthrough is unlikely as Putin is expected to demand territorial concessions while the US pushes for a ceasefire.

Silver fell to $38 per ounce on Monday, partially reversing last week’s gains, as investors took profits ahead of key US inflation data that could determine the Federal Reserve’s policy direction. Markets are increasingly betting on a Fed rate cut in September amid signs of a weakening labor market, with a possible subsequent move in December also being priced in. Fed official Michelle Bowman stated on Saturday that the latest weak jobs report reinforces her concerns about labor market volatility and strengthens her view that three rate cuts will likely be appropriate this year.

Asian markets were mostly higher last week. Japan’s Nikkei 225 (JP225) rose by 4.24%, China’s FTSE China A50 (CHA50) climbed 1.05%, Hong Kong’s Hang Seng (HK50) gained 1.75%, and Australia’s ASX 200 (AU200) posted a positive result of 1.68%.

In July 2025, consumer prices in China were unchanged year-on-year, defying market expectations for a 0.1% decline and following a 0.1% increase in the prior month. Core inflation, which excludes volatile food and fuel prices, rose to 0.8% y/y, the highest level in 17 months, after a 0.7% increase in June. On a monthly basis, the CPI rose by 0.4% in July, slightly above the 0.3% expectations and reversing a 0.1% decrease in June. This was the highest monthly inflation figure since January, partly attributed to recent extreme weather conditions, including heavy rainfall.

On Monday, the Australian dollar paused near the $0.652 mark as investors cautiously awaited the Reserve Bank of Australia’s monetary policy decision due on Tuesday. Markets broadly expect a 25-basis-point rate cut to 3.60% at the August meeting, following lower-than-expected second-quarter inflation and a rise in unemployment to a three-and-a-half-year high. This comes after the RBA’s unexpected decision in July to leave the cash rate unchanged at 3.85%, citing a more balanced assessment of inflation risks and persistent labor market resilience.