InvestMacro

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.

On Thursday, the Dow Jones Index (US30) fell by 0.51%. The S&P 500 Index (US500) declined by 0.08%. The tech-heavy Nasdaq index (US100) closed higher by 0.35%. The US indices came under pressure on Thursday, as early gains faded amid renewed trade tensions. The Nasdaq 100 posted a modest gain, initially supported by semiconductor stocks after Trump announced a 100% tariff on imported microchips, excluding US manufacturers. However, sentiment quickly deteriorated due to broader trade concerns. Investors also reacted to reports that Fed Governor Christopher Waller may be Trump’s pick to lead the Federal Reserve, fueling expectations of a rate cut in September.

The Mexican peso weakened to 18.6 per US dollar after Banxico cut the overnight rate to 7.75%, reducing some of the carry appeal that had recently supported the currency. The move followed a drop in annual inflation from 4.51% to 3.51% and somewhat stronger economic growth in Q2. However, the Central Bank maintained a cautious tone, citing global trade tensions and geopolitical risks as potential inflation triggers via peso depreciation, or as threats to growth momentum. Meanwhile, Washington imposed new tariffs (25% on steel and 10% on aluminum from Mexico, with additional tariffs on auto parts set to take effect next week),  posing further risks to export revenue and industrial output.

European stock markets mostly rose yesterday. Germany’s DAX (DE40) increased by 1.12%, France’s CAC 40 (FR40) closed up 0.97%, Spain’s IBEX 35 (ES35) rose by 1.06%, while the UK’s FTSE 100 (UK100) declined by 0.69%.

On Thursday, WTI crude oil prices fell to $63.90 per barrel, marking a sixth consecutive day of losses, as hopes for a diplomatic resolution to the war in Ukraine weighed on prices. The Kremlin confirmed that Russian President Vladimir Putin will meet US President Donald Trump in the coming days, their first summit since 2021, raising hopes for de-escalation. Meanwhile, Trump imposed new 25% tariffs on Indian goods over continued imports of Russian oil and signaled the possibility of further tariffs against China. Saudi Arabia also raised prices for September oil deliveries to Asian buyers for the second month in a row, citing tight supply and strong demand.

Asian markets mostly rose yesterday. Japan’s Nikkei 225 (JP225) gained 0.65%, China’s FTSE China A50 (CHA50) rose by 0.31%, Hong Kong’s Hang Seng (HK50) climbed 0.69%, while Australia’s ASX 200 (AU200) ended the day down 0.14%.

Japan’s services PMI rose to 45.2 in July 2025 from 45.0 in June, the highest reading since February and the third consecutive monthly increase, though it came in slightly below the market expectation of 45.5. Meanwhile, the Economic Outlook Index climbed to a six-month high of 47.3 from 45.9 in June, supported by signs of an economic rebound, including expectations of stronger consumer demand, despite ongoing concerns about cost pressures and US trade policy uncertainty.

On Friday, the New Zealand dollar held steady at USD 0.596, near a one-week high, supported by weakness in the US dollar. The greenback remained under pressure amid rising odds of a Federal Reserve rate cut in September and concerns about the impact of new tariffs on the US economy. The kiwi also drew support from still-strong trade data out of China, New Zealand’s largest trading partner, which showed July export growth exceeded expectations, offering some relief amid the fragile tariff truce between Beijing and Washington. However, domestic sentiment was dampened by recent labor market data indicating ongoing weakness, reinforcing expectations that the Reserve Bank of New Zealand may lower interest rates at its meeting later this month.

As of Wednesday, the Dow Jones Index (US30) rose by 0.18%. The S&P 500 Index (US500) gained 0.73%, and the tech-heavy Nasdaq Index (US100) closed up by 1.21%. The US stocks rose as investors reacted to strong corporate earnings and a major announcement from Apple, which pledged to invest an additional $100 billion in US manufacturing. Despite positive earnings reports from companies like Disney and Uber, some stocks, such as AMD, Snap, and Super Micro Computer, plunged due to disappointing results. Investor sentiment was supported by rising expectations of a Fed rate cut in September, with odds climbing to over 93% following soft labor market data. However, trade tensions flared again after President Trump imposed an additional 25% tariff on Indian goods due to continued imports of Russian oil, adding uncertainty.

European stock markets mostly rose yesterday. Germany’s DAX (DE40) increased by 0.33%, France’s CAC 40 (FR40) closed up 0.18%, Spain’s IBEX 35 (ES35) gained 0.90%, and the UK’s FTSE 100 (UK100) ended 0.24% higher. The Frankfurt DAX closed higher at 23,924, marking its third consecutive session of gains as traders weighed corporate earnings and looming US tariffs. President Trump is expected to impose broad tariffs on August 7 against countries that have not concluded trade deals. While the EU and US are finalizing their agreement, 15% tariffs on EU goods will take effect tomorrow, with Trump warning of a possible increase to 35% if the promised European investments are not fulfilled. He also confirmed plans to introduce tariffs on pharmaceutical imports “within the next week or so.”

WTI crude oil prices reversed earlier gains on Wednesday and fell by 1.2% to $64.30 per barrel, marking the fifth consecutive decline and hitting a new six-week low. Prices initially rose on supply concerns following President Trump’s decree imposing 25% tariffs on Indian goods due to Russian oil imports. Temporary support also came from a larger-than-expected US crude inventory draw of 3 million barrels. However, gains were dampened after US Secretary of State Marco Rubio stated that an announcement regarding potential sanctions against Russia could come later in the day, adding uncertainty to the market.

Asian markets mostly rose yesterday. Japan’s Nikkei 225 (JP225) climbed by 0.60%, China’s FTSE China A50 (CHA50) dipped by 0.07%, Hong Kong’s Hang Seng (HK50) edged up 0.03%, and Australia’s ASX 200 (AU200) closed with a solid 0.84% gain.

The Australian dollar strengthened to USD 0.648 on Wednesday, extending gains from the previous session, as rising expectations of a Fed rate cut in September boosted risk sentiment. Meanwhile, with little data expected this week, the Aussie may face headwinds as markets fully price in a 25 bp RBA rate cut to 3.60% on August 12.

The New Zealand dollar rose to USD 0.592 on Wednesday, rebounding from multi-week lows. However, the Kiwi’s upside may be limited by weaker-than-expected local employment data. New Zealand’s unemployment rate in Q2 rose to nearly a five-year high of 5.2%, slightly below expectations of 5.3%. This strengthened expectations that the Reserve Bank of New Zealand may cut rates at its upcoming August meeting. Markets currently price in a 90% chance of a 25 bp cut, with further easing to 2.75% expected by year-end or early next year. Additional concern comes from the Trump administration’s imposition of 15% tariffs on New Zealand exports starting August 7, which could place further pressure on the export-driven economy.

The offshore yuan remained stable around 7.18 per dollar on Thursday as investors digested the latest trade data. China’s trade surplus in July 2025 rose to $98.24 billion from $85.27 billion a year earlier. Export growth reached a three-month high of 7.2% year-over-year, significantly beating market expectations of 5.4%, mainly due to a temporary easing in tariff pressures ahead of the looming August deadline. Meanwhile, imports unexpectedly rose to an annual high, increasing 4.1% year-over-year, defying expectations for a 1.0% decline. In light of recent developments tied to a trade truce, President Donald Trump stated that the US and China are “very close” to extending the agreement set to expire on August 12.

As of Tuesday’s close, the Dow Jones Index (US30) declined by 0.14%. The S&P 500 Index (US500) fell by 0.49%, and the tech-heavy Nasdaq (US100) ended lower by 0.65%. The US stocks closed lower on Tuesday as investors grappled with disappointing economic data, escalating trade tensions, and mixed corporate earnings. Stagflation concerns resurfaced after the ISM Services Index showed activity stalled in July. Meanwhile, President Trump’s threats to impose steep tariffs of up to 250% on pharmaceutical imports, along with potential tariffs on semiconductors, heightened market anxiety amid ongoing trade uncertainty with India, Switzerland, and China. On the earnings front, Palantir rose by 7.8% after raising its revenue expectations, while Pfizer gained 5.2% following a strong quarterly report.

In June 2025, Canada’s trade deficit widened to CAD 5.9 billion (seasonally adjusted), up from the revised figure of CAD 5.5 billion in the previous month. Imports increased by 1.4% from a six-month low to CAD 67.6 billion, marking the first increase in four months. Exports to the US, subject to sectoral and country-specific tariffs, rose 3.1% from the previous month but remained 12.5% lower year-over-year.

European stock markets mostly rose yesterday. Germany’s DAX (DE40) gained 0.37%, France’s CAC 40 (FR40) closed down 0.14%, Spain’s IBEX35 (ES35) rose by 0.15%, and the UK’s FTSE 100 (UK100) closed up 0.16%. The DAX in Frankfurt gave up early gains and closed 0.4% higher on Tuesday as investors continued to monitor earnings season and trade developments, with US tariffs set to take effect on August 7. Under the US-EU deal, most EU exporters will face a unified 15% US tariff — half the 30% Trump had previously threatened. In return, the EU pledged to lower its own tariffs on certain goods and boost energy imports from the US by $750 billion over the remaining three and a half years of Trump’s presidency. However, Trump warned he could impose 35% tariffs on the EU if Brussels fails to meet its $600 billion investment commitment in US infrastructure.

WTI crude oil prices rose above $65 per barrel on Wednesday, snapping a four-day losing streak and rebounding from a five-week low amid supply disruption concerns. Investors assessed potential supply interruptions, as India may reduce imports of Russian oil in response to President Trump’s tariff threats over continued purchases. Trump warned of raising tariffs on Indian goods within 24 hours to pressure Russian President Vladimir Putin to end the war in Ukraine. Additional support for bulls came from API data showing a 4.2 million barrel drop in US crude inventories last week, exceeding market expectations of a 1.8 million barrel decline and signaling stronger-than-expected demand.

Silver held near $37.8 per ounce on Wednesday after rising for three straight sessions, supported by growing expectations of Federal Reserve rate cuts. The latest ISM Services PMI for July pointed to sluggish growth, a decline in employment, and persistent price pressures, reinforcing signs of labor market cooling after last week’s weaker-than-expected payroll report. Markets are now pricing in two Fed rate cuts by year-end, with the first potentially in September.

Asian markets mostly rose yesterday. Japan’s Nikkei 225 (JP225) gained 0.64%, China’s FTSE China A50 (CHA50) increased by 0.94%, Hong Kong’s Hang Seng (HK50) rose by 0.68%, and Australia’s ASX 200 (AU200) posted a strong performance, up 1.23%.

The Reserve Bank of India (RBI), at its August meeting, held the key repo rate steady at 5.50%, maintaining a neutral stance after cutting the rate by 50 basis points in June, more than usual and in line with expectations. The rate remains at its lowest level since August 2022. The decision came amid easing inflation and the recent US announcement of 25% tariffs on Indian imports. On the economic outlook, the RBI maintained its GDP growth expectations at 6.5% for the 2025/26 fiscal year and 6.6% for the following year. Meanwhile, inflation expectations were revised downward to 3.1% from 3.7%, remaining within the RBI’s target range of 2-6%.

Vietnam’s annual inflation rate fell to 3.19% in July 2025 from 3.57% in June, marking the lowest level in three months. Meanwhile, core inflation, excluding volatile items, slowed to 3.30% in July from 3.46% in June, also a three-month low. On a monthly basis, consumer prices rose by 0.11%, down from a 0.48% increase in the previous period.

In June 2025, the unemployment rate in New Zealand rose to 5.2%, which is slightly higher than the previous figure of 5.1% and in line with market expectations. The number of unemployed increased to 158,000 people compared to 156,000 in March, representing an annual increase of 16,000 people, or 11.1%. This data indicates growing slack in the labor market, putting pressure on policymakers as economic dynamics continue to weaken.

The Dow Jones Index (US30) rose by 1.34% by the end of Monday. The S&P 500 Index (US500) gained 1.47%, and the tech-heavy Nasdaq (US100) closed 1.95% higher. The indexes’ growth was fueled by renewed hopes for a September Fed rate cut following a weak July employment report and a downward revision of data from previous months. In response, President Trump fired the head of the Bureau of Labor Statistics and stated he would name a replacement this week. Meanwhile, updated tariffs ranging from 10% to 41% added additional pressure, although Switzerland and the EU signaled an openness to negotiations. Mega-cap tech stocks led the gains as traders focused on strong earnings, with 82% of S&P 500 companies reporting better-than-expected results so far. Palantir jumped 4.2% ahead of its post-market earnings release, Nvidia was up 3.5%, and Amazon gained 1.5%.

European stock markets were mostly higher yesterday. The German DAX (DE40) increased by 1.42%, the French CAC 40 (FR40) closed up 1.14%, the Spanish IBEX35 (ES35) gained 1.84%, and the British FTSE 100 (UK100) closed 0.66% higher on Monday. The FTSE 100’s Monday gains were driven by a sharp rise in British bank stocks after a favorable Supreme Court ruling on a motor finance case. Shares of Lloyds Banking Group surged over 8% to their highest level since 2015, while Barclays climbed 1.5%. HSBC and Standard Chartered also saw gains. The ruling overturned a lower court decision, easing fears of massive compensation payouts related to mis-selling car loans. The Financial Conduct Authority is now estimating a potential redress amount of £9 billion, significantly lower than earlier market fears of up to £30 billion. The ratings agency RBC upgraded Lloyds, the largest player in the UK car finance market, calling the court decision an “event that removes significant pressure on the stock.” BP shares also rose nearly 2% ahead of its earnings report as investors anticipate new insights into the company’s return to traditional energy sources.

The Swiss franc weakened to 0.81 against the US dollar as concerns about newly announced US tariffs overshadowed modest Swiss inflation growth. On August 1st, the Trump administration announced 39% tariffs on Swiss exports, higher than the 31% tariffs announced in April, with the measures taking effect on August 7th. If the tariffs remain in place, they are expected to intensify disinflationary pressure in Switzerland. Meanwhile, inflation in July grew slightly to 0.2% year-over-year, which was higher than the 0.1% expectation but still near zero. The subdued price growth, combined with rising external risks, suggests that the Swiss National Bank may resort to further negative interest rate cuts. The Swiss Manufacturing PMI fell to 48.8 in July from 49.6 in June, signaling a deeper downturn in the sector.

WTI crude oil prices fell to $66.3 per barrel on Monday as traders digested the OPEC+ decision to increase production and growing geopolitical uncertainty. The group confirmed a widely anticipated production increase of 547,000 barrels per day starting in September, completing the phased unwinding of voluntary cuts enacted in 2023. While the move was expected, it heightened expectations that global oil supply could outpace demand this year, potentially leading to a buildup in inventories. Traders are also monitoring potential US actions on Russian oil flows. President Trump has threatened to impose additional sanctions on countries buying Russian oil, specifically targeting India, with possible measures taking effect as early as August 8th.

The US natural gas prices fell below the $3/ 3/MMBtu mark, nearing a low not seen since November 2024, as production outpaces demand. According to LSEG, average output in the Lower 48 states reached 107.5 billion cubic feet per day in July, surpassing June’s record of 106.4 billion cubic feet per day. As a result, the latest EIA data showed a larger-than-expected injection into storage of 48 billion cubic feet for the week ending July 25th, exceeding forecasts of 38 billion cubic feet.

Asian markets were mostly higher yesterday. The Japanese Nikkei 225 (JP225) fell by 1.25%, the Chinese FTSE China A50 (CHA50) rose by 0.52%, the Hong Kong Hang Seng (HK50) gained 0.92%, and the Australian ASX 200 (AU200) had a positive result of 0.02% yesterday.

Hong Kong stocks dropped to 24,711 on Tuesday morning, reversing the previous session’s gains. Investors cautiously awaited China’s July trade data and upcoming inflation figures amid concerns over rising trade barriers and weak domestic demand. Consumer stocks fell while real estate, financial, and tech stocks saw modest gains. Further losses were contained by an overnight rally on Wall Street amid some bargain hunting after Friday’s decline and increased bets on a September rate cut. Meanwhile, according to a private survey, China’s services activity grew at its fastest pace in 14 months in July.

On Friday, the Dow Jones Index (US30) declined by 1.23% (-3.02% for the week). The S&P 500 Index (US500) dropped by 1.60% (-2.50% for the week), and the Nasdaq Tech Index (US100) closed down by 1.96% (-2.48% for the week). The US stocks fell on Friday as investors reacted to weak July employment data and a new round of tariffs announced by President Trump. Non-farm payrolls increased by just 73,000 in July, well below expectations, and sharp downward revisions to previous months’ data pointed to deeper labor market weakness. Treasury yields fell, and the probability of a Fed rate cut in September rose above 80%. Sentiment also soured after the US imposed new tariffs ranging from 10% to 41% on imports from key partners, including Canada, India, and Taiwan. On the corporate front, Amazon dropped nearly 8% due to disappointing cloud forecasts, dragging the broader market, while Apple fell 2.9% despite strong results. Exxon (-1.8%) and Chevron (-0.1%) beat expectations, Eli Lilly rose by 3% on hopes of drug coverage, while Moderna plunged 6.6% amid renewed vaccine concerns.

The Mexican peso fell to a one-month low, breaking through 18.80 per USD, despite broad dollar weakness, primarily reflecting domestic factors and tariff concerns weighing on the currency. The S&P Global Manufacturing PMI for July remained at 49.1 for the thirteenth consecutive month, while the business confidence index stayed below the 49.4 threshold, indicating falling export demand and reduced capital expenditures.

The Canadian dollar strengthened to 1.38 per USD, rebounding from a two-month low as the dollar weakened following the weak US non-farm payroll report showing just 73,000 new jobs vs. 110,000 expected, and a net downward revision of 258,000 positions. This boosted bets on a Fed rate cut in September. At the same time, Canada’s economy showed surprising resilience: after a 0.1% GDP contraction in May, a 0.1% increase is expected in June, with manufacturing output rising by 0.7%. This supports the Bank of Canada’s decision to hold rates steady at 2.75%, standing in sharp contrast to the Fed’s more dovish stance. Although President Trump’s surprise announcement of 35% tariffs briefly shook markets, Canadian exemptions under USMCA effectively cap export taxes at around 5%, softening any major impact on cross-border trade flows.

European stock markets mostly declined on Friday. Germany’s DAX (DE40) fell 2.66% (weekly: -4.09%), France’s CAC 40 (FR40) closed down 2.91% (weekly: -4.77%), Spain’s IBEX35 (ES35) dropped 1.88% (weekly: -1.68%), and the UK’s FTSE 100 (UK100) closed Friday 0.70% (weekly: -0.57%). European equities closed sharply lower on Friday, following a steep global market sell-off as the US government expanded the range of imports subject to tariffs. While the base tariff remained at 10%, rates were sharply increased for India (25%), Canada (35%), and Switzerland (39%). Overall, the average US tariff rate will rise to 15%, compared to roughly 2% in 2024. Additionally, banks and industrial giants fell sharply following the pessimistic US labor report: Siemens, Intesa Sanpaolo, ING, BNP Paribas, and Schneider dropped more than 4%.

WTI crude oil prices fell by 2.7% to $67.3 per barrel on Friday amid reports that OPEC and its allies may soon agree to raise output. Market sentiment also deteriorated following newly signed tariffs by President Trump on imports from dozens of countries, including Canada, India, and Taiwan, which will take effect on August 7.

Silver hovered around $37 per ounce on Monday after rising nearly 1% in the previous session, supported by rising expectations of a Fed rate cut following the weak July jobs report. A falling dollar and lower Treasury yields further boosted silver’s appeal.

Asian markets mostly declined last week. Japan’s Nikkei 225 (JP225) dropped by 1.73%, China’s FTSE China A50 (CHA50) fell by 2.19%, Hong Kong’s Hang Seng (HK50) declined by 3.74%, while Australia’s ASX 200 (AU200) posted a slight weekly loss of 0.06%.

On Monday, the offshore yuan held its recent gains at 7.19 per USD after the People’s Bank of China announced the formation of a new committee on macroprudential and financial stability. The central bank reaffirmed its accommodative stance, pledging to manage key financial risks and maintain ample liquidity in H2 with an “appropriately loose” monetary policy. Lending to strategic sectors such as technology and green development has surged, reflecting policy priorities. Meanwhile, investors are watching the key October policy plenum, where officials are expected to present countermeasures to persistent deflationary pressure, excess industrial capacity, and the ongoing real estate downturn. Recent signals from the Politburo point to more stimulus through bond issuance and demand-boosting measures.

By the end of Wednesday, the Dow Jones Index (US30) declined by 0.38%. The S&P 500 Index (US500) fell by 0.12%, while the tech-heavy Nasdaq Index (US100) closed higher by 0.15%. The US stocks ended mostly lower on Wednesday after the Federal Reserve kept interest rates unchanged at its July meeting, as investors digested a wave of earnings reports. Fed Chair Jerome Powell noted that the Fed is still assessing the impact of Trump-era tariffs on inflation, which tempered expectations for near-term rate cuts. The decision was not unanimous: Fed governors Michelle Bowman and Christopher Waller supported a 25-basis-point rate cut.

Investors also evaluated corporate earnings: Humana, Kraft Heinz, and Visa gained on strong results, while Starbucks dropped over 1% despite higher revenue. Meanwhile, trade tensions escalated as President Trump announced 25% tariffs on Indian goods and 50% tariffs on Brazilian imports.

The Canadian dollar fell to 1.38 per US dollar, its weakest level in two months, pressured by a stronger US dollar, while Canada’s monetary and economic environment had little impact on the Loonie. The Bank of Canada’s decision to keep its key rate at 2.75%, the third pause after seven cuts. This highlighted policymakers’ caution amid ongoing tariff uncertainty, an expected GDP slowdown in Q2 (after exporters front-loaded shipments in Q1), and projections that CPI inflation will remain close to the 2% target in the medium term.

European stock markets were mostly up yesterday. Germany’s DAX (DE40) gained 0.19%, France’s CAC 40 (FR40) closed up by 0.06%, Spain’s IBEX35 (ES35) added 0.23%, and the UK’s FTSE 100 (UK100) ended slightly higher by 0.01%. Investors evaluated a range of regional economic data and fresh corporate earnings while keeping an eye on trade talks. Germany’s economy contracted by 0.1% in Q2, reversing a 0.4% growth in Q1. Meanwhile, the German cabinet approved a draft 2026 budget featuring a record €126.7 billion in investments and €174 billion in planned borrowing.

On the corporate front, Siemens Healthineers rose around 2% on strong Q3 results and updated expectations, and Porsche AG gained 1.7% as investors welcomed its strategic restructuring despite a projection cut due to €400 million in tariff-related losses. Among decliners, Adidas plunged over 11% after missing revenue targets, and Mercedes-Benz dropped 3.4% after H1 profit halved and its full-year revenue outlook was lowered.

WTI crude oil prices climbed above $70 per barrel on Wednesday, holding at a five-week high, driven by concerns over supply after President Donald Trump pressured Russia to shorten the timeline for ending the war in Ukraine. Trump gave Moscow a 10-day ultimatum to propose a satisfactory resolution or face consequences, including 100% secondary tariffs on countries continuing trade with Russia. These measures could significantly disrupt oil markets, as key US trading partners, major buyers of Russian oil, might reduce or halt purchases.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) declined by 0.05%, China’s FTSE China A50 (CHA50) rose by 0.17%, Hong Kong’s Hang Seng (HK50) dropped by 1.36%, and Australia’s ASX 200 (AU200) ended the day with a gain of 0.60%.

Official PMI data from China indicated a slowdown in July, with the composite PMI falling to a three-month low of 50.2 from June’s 50.7. Manufacturing activity remained in contraction, slipping to 49.3 from 49.7, while the services PMI declined to 50.1 — the weakest in eight months — from 50.5. Despite weak data, sentiment found some support from Wednesday’s Politburo meeting.

At its July meeting, the Bank of Japan left its short-term policy rate unchanged at 0.5%, maintaining borrowing costs at their highest level since 2008, in line with market expectations. The decision was unanimous, reflecting the Central Bank’s cautious stance on policy normalization. In its quarterly outlook, the BoJ raised its core inflation expectations for fiscal year 2025 to 2.7%, up from April’s 2.2%, while expecting it to drop to 1.8% in FY2026 and rise again to 2.0% in FY2027. The GDP growth estimate for FY2025 was slightly raised to 0.6% from 0.5%, while the FY2026 growth projection remained unchanged at 0.7%.

As of Tuesday, the Dow Jones Index (US30) fell by 0.46%. The S&P 500 Index (US500) declined by 0.30%, and the tech-heavy Nasdaq Index (US100) closed lower by 0.21%. The three major US indexes ended Tuesday in the red as mixed corporate earnings reports and caution ahead of the Federal Reserve’s monetary policy decision weighed on investor sentiment. Weak results from UnitedHealth (-7.5%), Boeing (-4.4%), and Merck (-1.7%) dragged the market down, while United Parcel Service and Whirlpool also slumped more than 10% following disappointing earnings and expectations. Investors also reacted to a decline in job openings and hiring in June, although consumer confidence in July came in higher than expected. Meanwhile, trade talks between the US and China ended without a final agreement, leaving hopes alive for an extension of the current tariff truce.

The Fed is expected to leave interest rates unchanged today, but markets are closely watching for signals on the future direction of policy amid signs of slowing inflation.

The Bank of Canada will also hold its policy meeting today. It is expected to keep interest rates unchanged at 2.75%, but the tone of the statement and the follow-up press conference will be key for markets. Recent data points to economic weakness: GDP is expected to contract for the third consecutive month, increasing the likelihood of a rate cut by year-end. With slowing inflation and weakening domestic demand, the Bank of Canada may lean toward a more dovish outlook.

The IMF expects global economic growth at 3.0% in 2025 and 3.1% in 2026, slightly above its April 2025 projections. The upgrade — by 0.2 percentage points for 2025 and 0.1 percentage points for 2026 — reflects stronger-than-expected economic activity, lower-than-expected US tariff rates, improved financial conditions (partly due to a weaker US dollar), and expanded fiscal policies in several major economies. Despite the slightly improved outlook, the IMF warns that risks remain tilted to the downside. Growth projections for key economies include the US at 1.9% in 2025 and 2.0% in 2026, the Eurozone at 1.0% and 1.2%, and the UK at 1.2% and 1.4%. China’s growth was revised upward to 4.8% and 4.2%, while Japan is expected to grow at a more modest pace of 0.7% and 0.5%.

European stock markets mostly rose yesterday. Germany’s DAX (DE40) gained 1.03%, France’s CAC 40 (FR40) closed up 0.72%, Spain’s IBEX35 (ES35) rose by 0.90%, and the UK’s FTSE 100 (UK100) ended up 0.60%. The FTSE 100 climbed over 0.5% to a new record high, supported by strong corporate earnings and improved sentiment around the UK economy. Shares of AstraZeneca jumped 3.5% following strong Q2 results, driven by high cancer drug sales and reaffirmed guidance. Barclays also rose by 2.5% despite a mixed earnings report, as its investment banking division posted solid results, benefiting from market volatility. Optimism was further boosted by the IMF’s projection that the UK’s economic growth this year and next will outpace other major European economies.

WTI crude oil prices rose by 3.7% to close at $69.20 per barrel on Tuesday, reaching a five-week high and extending Monday’s 2.4% gain, as easing trade tensions and rising geopolitical risks fueled supply concerns. Additional support came from former President Trump, who increased pressure on Russia by setting a shorter deadline for progress in ending the war in Ukraine and threatening new sanctions.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) fell by 0.79%, China’s FTSE China A50 (CHA50) rose by 0.01%, Hong Kong’s Hang Seng Index (HK50) declined by 0.15%, while Australia’s ASX 200 (AU200) posted a modest gain of 0.08%.

The Australian dollar rose above the $0.651 level on Wednesday, snapping a four-day losing streak, as a weaker US dollar outweighed weak domestic inflation data. In Australia, consumer prices rose at the slowest pace in over four years in Q2: the headline CPI was 0.7% quarter-over-quarter and 2.1% year-over-year, while core inflation fell to a three-year low of 2.7% year-over-year. Both figures came in below expectations and within the Reserve Bank of Australia’s 2–3% target range. The soft inflation data strengthened expectations for policy easing, with markets now fully pricing in a 25-basis-point rate cut at the RBA’s August meeting.