Market and Macro Overview for the Week (8th - 15th August 2025)

by Aubrey Hayward

Aug 17, 2025

Macro Trends

Equities extended gains last week, with Wall Street hitting new highs despite mixed U.S. inflation data. Softer CPI readings early in the week reinforced expectations for a September Fed cut, though a surprise PPI spike tempered enthusiasm. The Fed’s path remains uncertain, but signs of labour-market softness are tilting sentiment toward easing, focusing now on Powell’s Jackson Hole speech on 22nd August. Risk appetite was also supported by the extension of the U.S.-China tariff truce, while the dollar traded on yield sensitivity and global peers reacted to central bank signals.

Stock Markets

Global equities pushed higher last week, with Wall Street extending gains even as inflation worries clouded the Fed’s outlook. The Dow Jones led (+1.74%) as cyclical sectors such as industrials, financials, and energy outperformed, while the S&P 500 (+0.94%) and Nasdaq (+0.81%) also advanced. Small caps stood out, with the Russell 2000 posting its strongest outperformance versus the S&P 500 since April, reflecting renewed interest in domestic growth-sensitive stocks. In Europe, easing trade tensions boosted sentiment, driving the EuroSTOXX 50 up 1.89%. France’s CAC 40 (+2.33%) and Italy’s FTSE MIB (+2.47%) outperformed, helped by financials and consumer staples, while Germany’s DAX (+0.81%) and the UK’s FTSE 100 (+0.47%) lagged somewhat on energy weakness. Japan’s markets surged in Asia, with the Nikkei 225 up 3.73% and TOPIX up 2.76% to fresh record highs. Gains were broad-based but strongest in auto and tech exporters, buoyed by better-than-expected Q2 GDP and optimism over the new U.S.–Japan trade deal.

Fixed Income and STIRs

UK bonds sold off as BoE easing bets were pushed back, with data showing private wage growth near 5% and GDP beating expectations, supporting hawks who argue policy should stay tight. In the U.S., talk of a jumbo 50bp September Fed cut faded after strong PPI data, though traders still price two cuts this year, with odds at 55% for October and nearly 87% for December. Elsewhere, Norway’s central bank held its key rate at 4.25%, leaving the door open for further easing later this year, while in Japan, the 10-year JGB yield rose to 1.57% from 1.49% on expectations the BoJ could begin lifting short-term rates late 2025 or early 2026 after stronger-than-expected GDP data.

FOREX Markets

Sterling topped the FX leaderboard last week, buoyed by resilient UK data that reinforced expectations that the BoE would keep policy tighter for longer. The euro and yen followed with modest gains, helped by supportive economic signals and a cautious risk backdrop. On the other hand, the Kiwi, loonie, and Aussie underperformed, pressured by soft domestic indicators and lingering headwinds from China. The dollar and Swiss franc traded mid-pack, reflecting a balance of safe-haven demand and shifting Fed expectations.

Cryptocurrency

Bitcoin (BTC) hit a new record above $124,500 midweek before easing back below $120,000 by Friday. Attention, however, shifted to Ethereum (ETH), which climbed 11% on the week and is edging toward its $4,800 all-time high from late 2021. ETH’s surge, up nearly 190% since April, was fuelled by Peter Thiel’s investment in ETHZilla, the commercial arm of 180 Life Sciences, which holds over 82,000 ETH. Plans to deploy these holdings into DeFi for yield generation sparked comparisons to MicroStrategy’s bitcoin treasury model, highlighting Ethereum’s growing institutional traction. The broader market rallied in tandem, with total crypto market capitalisation now above $3.7 trillion, within reach of its late-2024 peak.

Commodities & Energy

Oil prices stayed under pressure, with Brent briefly dipping below $65, down about 7% this month. The IEA’s bearish forecasts of oversupply into 2026, weak Chinese data, and uncertainty over possible sanctions relief for Russia weighed on sentiment. A potential Trump-Putin ceasefire deal could further increase Russian supply, increasing global market concerns. In metals, copper was little changed, constrained by a weaker dollar, Chinese demand worries, and tariff uncertainty. Still, miner Antofagasta posted a 60% profit jump, underscoring the benefit of vastly elevated prices. Gold held steady, supported by safe-haven demand even after stronger U.S. PPI data.

What to watch next week

MONDAY - No Tier 1 Events TUESDAY - US Building Permits & Housing Starts, Canadian CPI / Earnings: Home Depot WEDNESDAY - UK CPI, RBNZ Policy Announcement, PBoC LPR, Riksbank Policy Announcement & FOMC Minutes / Speakers: Fed’s Bostic, RBA’s Jones, ECB’s Lagarde THURSDAY - Global Flash PMIs, UK PSNB, US Weekly/Continued Claims, Jackson Hole (21st-23rd) / Speakers: Fed’sBostic / Earnings: Walmart FRIDAY - Japanese CPI, Jackson Hole (21st-23rd) / Speakers: Fed’s Powell, BoE’s Bailey