Market and Macro Overview for the Week (11th - 18th July 2025)

by Aubrey Hayward

Jul 19, 2025

Macro Trends

Markets showed surprising composure last week as the second-quarter earnings season got underway. Despite renewed political tensions, including threats against Fed Chair Jerome Powell, and lingering uncertainty over U.S. trade policy, the S&P 500 and Nasdaq closed at fresh all-time highs. Broader equity indexes ended the week roughly flat as investors weighed early earnings reactions against macro risk. Strong U.S. economic data continued to underpin sentiment, helping the dollar top FX performance rankings and offering support to crypto markets. While headline risks remain, especially around tariffs set to take effect in August, markets appear content to wait for further clarity.

Stock Markets

U.S. equity markets extended their climb, with the S&P 500 and Nasdaq Composite hitting new all-time highs, driven by upbeat earnings and steady economic data. Early Q2 results from major banks, including JPMorgan Chase and Citigroup, topped forecasts, while PepsiCo, United Airlines, and Netflix added to the positive tone later in the week. The Russell 2000 posted gains, but the Dow Jones Industrial Average and S&P Midcap 400 finished slightly lower. NVIDIA shares rallied after the chip giant confirmed it had secured U.S. government approval to sell advanced AI chips to China, lifting sentiment in the tech sector. The company also crossed the $4 trillion market cap threshold earlier this month, reinforcing its market leadership. The EuroSTOXX 50 ended marginally lower in Europe as investors remained cautious amid ongoing U.S.-EU trade talks. Italy’s FTSE MIB and the UK’s FTSE 100 posted modest gains, benefiting from a weaker pound. Germany’s DAX and France’s CAC 40 were little changed. Japanese equities saw modest gains, with the Nikkei 225 up 0.63% and the TOPIX advancing 0.40%. However, political uncertainty ahead of Japan’s July 20 Upper House election limited upside as investors assess the stability of Prime Minister Ishiba’s ruling coalition.

Fixed Income and STIRs

Following hotter-than-expected U.S. CPI data, markets have effectively ruled out a July 30 Fed rate cut, with the odds of a move in September now down to 54%. Futures are pricing in a slower pace of easing, with only one or two cuts expected by year-end. While Fed Governor Waller reiterated his call for a July cut, most policymakers pointed to tariff-driven inflation risks. June’s CPI report showed headline inflation accelerating to 2.7%, with core CPI at 2.9%, confirming that higher input costs are beginning to reach consumers. Similar sentiment is emerging in Canada, where no rate cuts are anticipated in 2025. Global bond yields moved higher, led by a renewed test of the 5% level on the U.S. 30-year Treasury. Japanese yields also climbed, with the 10-year JGB yield rising to 1.53%, amid expectations of increased fiscal spending after the upcoming elections.

FOREX Markets

Last week, the U.S. dollar topped the FX leaderboard, buoyed by resilient economic data and rising Treasury yields. While the greenback maintained a firm grip on global currency markets, the euro and sterling held their ground, supported by domestic data surprises and relative strength versus weaker peers. In the Eurozone, a strong rebound in Germany’s ZEW Economic Sentiment index lifted the euro, though looming U.S. tariff threats continue to cast a shadow over the region. Sterling also saw modest gains after UK inflation came in hotter than expected, with core CPI rising to 3.7% and goods inflation hinting at tariff-linked pressures ahead. At the other end of the spectrum, the Australian dollar finished the week as the worst-performing major, dragged down by a dismal June jobs report. With only 2,000 jobs added and unemployment ticking up to 4.3%, markets swiftly priced in an August rate cut from the RBA. The AUD’s underperformance stood in stark contrast to local equities, as the ASX 200 hit record highs. The Japanese yen weakened ahead of national elections, while the New Zealand dollar also struggled amid global dollar strength. The Swiss franc held steady in the middle of the pack, lacking a clear domestic driver.

Cryptocurrency

Bitcoin broke new records last week, briefly surpassing $123,000 on Monday before settling around $118,000. Spot Bitcoin ETFs continued to attract robust institutional interest, pulling in over $2 billion in net inflows since Monday. These vehicles now hold more than 6.5% of all BTC in circulation, with assets under management reaching a record $154 billion. Ether (ETH) delivered a standout performance, surging 20% on the week to $3,550, though it remains below its 2021 high of $4,100. Broader crypto sentiment was buoyed by progress on U.S. regulation: the House of Representatives passed three major crypto bills, the GENIUS Act (focused on stablecoins), the CLARITY Act (defining asset classifications), and the Anti-CBDC Act (blocking a U.S. digital dollar). While not yet law, the moves mark a significant shift in political tone and reinforce growing institutional confidence in the space.

Commodities & Energy

Oil prices edged lower last week as geopolitical risks and shifting supply dynamics weighed on sentiment. Drone attacks in Iraq’s Kurdistan region disrupted output, while U.S. crude inventories fell by 3.9 million barrels, exceeding expectations. Diesel stocks hit their lowest since January 2024 in Europe, underscoring tightness in the middle distillates market. Looking ahead, OPEC+ continues its phased reintroduction of 2.2 million barrels per day through September, offering a potential rebalancing signal for the second half of the year. Copper held steady, buoyed by upbeat U.S. retail data and renewed optimism around U.S.-China trade talks. Beijing’s latest pledges to support industrial growth and stabilise trade relations have helped shore up demand expectations. Meanwhile, gold softened slightly despite a late-week bounce, as strong U.S. economic data and reduced concern over Fed independence tempered safe-haven demand.

What to watch next week

MONDAY - Canadian Producer Prices, US Leading Index Change, Chinese LPR; BoC SCE; NZ Trade Balance / Earnings: Ryanair, Sabadell, NXP Semiconductors, Verizon, Domino's Pizza, Cleveland Cliffs TUESDAY - US Richmond Fed Index, NBH Policy Announcement / Speakers: Fed Chair Powell, Bowman; ECB’s Lagarde Earnings: Akzo Nobel, ASM International, Dassault Aviation, Julius Baer, Lindt, SAP, Intuitive, Capital One, Baker Hughes, Coca Cola, Lockheed Martin, Philip Morris, RTX, DR Horton, Northop Gruman, Danaher, MSCI, Pulte WEDNESDAY - EU Consumer Confidence, US Existing Home Sales / Speakers: BoJ’s Uchida / Earnings: VAT, Lonza, Equinor, Thales, Tesla, Alphabet, Google, ServiceNow, IBM, Chipotle, GE Vernova, Freeport, AT&T, Thermo Fisher Scientific, Lamb Weston, Infosys, Moody's, CME, Hilton THURSDAY - Global PMIs, German GfK Consumer Sentiment, US Jobless Claims, Canadian Retail Sales, ECB & CBRT Policy Announcement / Speakers: RBNZ’s Conway; RBA’s Bullock; ECB President Lagarde / Earnings: LVMH, BNP Paribas, TotalEnergies, STMicroelectronics, Dassault Systemes, Carrefour, Michelin, BE Semiconductor, Richemont, Nestle, Roche MTU Aero, Deutsche Bank, Lloyds, IG, Reckitt Intel, American Airlines, Blackstone, Dow Chemical, Nasdaq, Union Pacific, Honeywell, Keurig Dr Pepper FRIDAY - Japanese Tokyo CPI, UK Retail Sales, German Ifo Business Climate, US Durable Goods, Atlanta Fed GDPNow / Earnings: SGS, Rightmove, NatWest, Volkswagen, Eni, Centene, AutoNation, AON