Market Quick Take – 30 June 2025

Market drivers and catalysts

• Equities: New highs, trade optimism, rate cut hopes, tech and consumer lead
• Volatility: VIX low, hedges rolled, cheap downside protection
• Digital assets: Bitcoin steady, strong ETF inflows (IBIT, ETHA), liquidity focus
• Fixed Income: European long yields hit highest level in over a month
• Currencies: USD weakens in Asian session, with JPY the largest gainer
• Commodities: Gold consolidation continues. Grains sector await key reports
• Macro events: UK May Mortgage Approvals & Germany June CPI

Macro data and headlines

• US President Trump's extensive tax cut and spending bill passed a vote to allow further debate in the US Senate on Saturday with a 51-49 vote, with one Republican Senator against the bill announcing he will not run for re-election. President Trump hailed the Senate's vote as a great victory, referring to the bill as the "great big, beautiful bill." Votes on amendments to the bill continue today.
• Canada announced late yesterday that it would cancel a planned digital services tax that was set to go into effect today and caused Trump to suspend trade talks with the country. The digital services tax would have mostly hit large US tech companies, taxing 3 percent of revenues for the largest internet services providers, many of which are large US companies like Meta, Netflix and Amazon. Prime Minister Carney said that eliminating the tax "will support a resumption of negotiations" on trade.
• US President Trump said Sunday that he was considering keeping the 25% tariffs on Japan’s cars, citing the imbalances in the number of cars that Japan purchases relative to the number they sell into the US.
• US May Core PCE inflation, released Friday, saw core prices rising 0.2% MoM and 2.7% YoY, higher than the 0.1%/2.6% expected and vs. a revised 2.6% YoY (From 2.5%) in April..

Macro calendar highlights (times in GMT)

0830 – UK May Mortgage Approvals
1200 – Germany June CPI
1430 – Dallas Fed Manufacturing Activity
1600 – USDA Quarterly Stocks and Acreage Planted reports

Earnings events

• Tuesday: Constellation brands

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• US: US stocks closed at fresh record highs Friday, lifted by optimism over new trade deals and possible Fed rate cuts. The S&P 500 rose 0.5% to a new peak, Nasdaq 100 gained 0.5%, and the Dow added 432 points. Positive earnings (Nike +15%), easing inflation, and a US-China trade framework fueled gains. Markets rallied as tariffs were scaled back and consumer sentiment improved, with core PCE inflation rising only 0.2%. Tech and consumer stocks led, while energy lagged on lower oil prices.
• Europe: European equities surged, following global optimism on softer US tariff threats. The STOXX 50 jumped 1.5%, DAX +1.6%, and CAC 40 +1.8%, led by industrials and autos like Siemens (+6.5%) and BMW (+5.3%). A US-China trade deal and ECB’s ongoing rate cut path supported the move. France and Spain saw higher-than-expected inflation, but not enough to disrupt the ECB’s stance. Hopes for a new EU-US trade agreement added momentum, while German job data signaled ongoing hiring caution.
• UK: The FTSE 100 rose 0.7% Friday, finishing the week modestly higher and tracking gains in global markets. JD Sports (+6.6%) led after a positive Nike update. Defensive names like Unilever and AstraZeneca posted steady gains, while energy and miners slipped. UK auto production remains weak, but optimism is building on improved trade relations with the US and EU. The FTSE remains just below its all-time high.
• Asia: Asia’s markets were mixed but are set for monthly gains. Japan’s Nikkei surged 1.6% to a one-year high, up 8% in June, driven by tech and a weaker yen. China’s markets were flat; manufacturing PMI showed contraction but less severe than expected. Hong Kong slipped 0.4% as property stocks dragged. South Korea’s KOSPI gained 0.8%, buoyed by digital currency news. Overall sentiment remains positive as the US-China truce and tariff delay calm nerves.

Volatility

Volatility stayed low as markets rallied. The VIX closed at 16.3 (-1.6%), with short-term event risk measures (VIX1D) fading to 8 after a brief spike. S&P 500 realized volatility hit a new YTD low. Demand for downside protection remains modest, with most investors rolling existing hedges, rather than buying new ones. With multiple Fed speakers and key US jobs data ahead, low implied volatility offers investors a window to top up protection at relatively low cost.

Digital Assets

Crypto markets opened the week steady. Bitcoin hovered near $108,000, holding above key levels. US spot Bitcoin ETFs, led by BlackRock’s IBIT ($74bn AUM), saw $2bn in inflows last week. Ethereum ETFs also saw strong demand, with ETHA managing $4.2bn. ETH traded at $2,500. Most altcoins underperformed, with liquidity now concentrated in Bitcoin and select meme coins. Growing ETF adoption is making crypto exposure easier and more transparent for investors.

Fixed Income

• US Treasury yields rose slightly on Friday after the hotter than expected May PCE inflation reading, with the US 2-year treasury benchmark up three basis points near 3.75% and the 10-year benchmark up four basis points at 4.28% after the multi-week low posted Thursday. yesterday all along the curve before bouncing back slightly in the overnight session, with the 10-year treasury yield benchmark at 4.26% after a seven-week low of 4.24% yesterday. The 2-year benchmark, so heavily impacted yesterday by speculation that Trump would be very early to nominate a dovish Fed Chair to replace Fed Chair Powell next May bounced back to 3.74% after trading as low as 3.71% yesterday.
• Germany’s 10-year Bund yield rose two basis points on Friday to close at its highest level in over a month as Germany warms up its enormous fiscal expansion.

Commodities

• Crude prices trade steadily following last week’s 11% tumble, with focus on the potential for trade deals being announced this week, and whether a fragile Middle East ceasefire can hold. Against these developments, traders also must weigh the prospect of another 411,000 b/d OPEC+ production increase from August being announced on 6 July.
• Gold trades higher after finding support ahead of USD 3,245 and following a 2.8% correction last week as Middle East tensions eased, and strong risk sentiment across global equity markets extended a ten-week period of consolidation. Focus on Trump’s fiscal debt-swelling tax bill, trade talks, and their impacts on the US dollar and Treasury yields.
• The grains sector, which fell 4.5% last week, will be watching key acreage, stock, and crop progress reports from the USDA later today. All three major crops have been losing ground recently due to pressure from expectations of ample global supplies amid ideal growing conditions around the world.

Currencies

• The US dollar fell broadly in the Asian session overnight, with the Japanese yen the biggest gainer in Asian hours, rising sharply across the board as USDJPY was crushed well back below 144.00 after a Friday close of 144.65.
• After a volatile Friday on US President Trump’s suspensions of trade talks over Canada’s threatened digital services tax that would have impacted US companies hardest and Canada’s suspension of that tax at the weekend, USDCAD only pushed a bit lower in the overnight session to 1.3665 versus a Friday close of 1.3689, although the intraday high on Friday was 1.3759.