Market Quick Take – 22 August 2025
Market drivers and catalysts
- Equities: U.S. extended losses into Jackson Hole; Europe flat with pockets of earnings dispersion; Asia softer with Hong Kong and Japan lower; UK eked a record close.
- Volatility: VIX 16.6, VIX1D 18.2, Sep VIX future 18.6; mild contango; options imply a 66.6-point SPX move, or 1.0%
- Digital Assets: BTC $112,746 (+0.3%), ETH $4,280 (+1.4%) on the 00:00 UTC cut
- Fixed Income: Globally, long yields on rise again, with Japan’s yields pressing on cycle highs all along the JGB yield curve.
- Currencies: USD strong across the board, with multi-month highs versus commodity dollars
- Commodities: Crude gains as peace hope fade; coffee, corn and cattle lift agriculture
- Macro events: Fed Chair Powell’s speech at Jackson Hole
Macro headlines
- In a speech today at Jackson Hole, Fed Chair Powell is expected to unveil the Fed’s new policy framework — the strategy it’ll employ to achieve its inflation and employment goals. Minutes of the late July FOMC meeting showed most Fed officials see inflation risks outweighing concerns over the labor market, as tariffs fueled a growing divide within the central bank’s rate-setting committee.
- Japan’s core CPI increased 3.1% in July 2025, slightly below June's 3.3% but above expectations. This rate exceeds the BOJ's 2% target, raising speculation about further rate hikes amid inflation pressure and weak wage growth, though Governor Ueda remains cautious on underlying inflation.
- US initial jobless claims increased by 11,000 to 235,000 in mid-August, exceeding expectations. Outstanding claims rose by 30,000 to 1,972,000, the highest since late 2021, signaling a labor market slowdown amid muted hiring.
- S&P Global US Composite PMI rose to 55.4 in August 2025 from 55.1 in July, indicating ongoing growth for 31 consecutive months and the strongest expansion this year. Services growth held steady, while manufacturing rebounded to 53.3, its highest since May 2022.
- The EU and US agreed on a trade deal covering secure supply chains, including tariff rate-quota solutions, and will tackle "unjustified digital trade barriers." The EU won't impose network usage fees and will collaborate on domestic steel and aluminum markets. EU firms plan to invest an extra $600 billion in US sectors by 2028, with the EU purchasing $750 billion in US energy products and $40 billion in AI chips.
Macro calendar highlights (times in GMT)
1400 – Fed’s Powell speaks at Jackson Hole
US Fed’s Jackson Hole Economic Policy Symposium (ends Saturday)
Earnings events
Note: earnings announcement dates can change with little notice. Consult other sources to confirm earnings releases as they approach.
Next week:
- Wednesday: Nvidia , Crowdstrike, Snowflake
- Thursday: Dell, Marvell Technologies, Autodesk
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA
U.S. stocks fell for a fifth day as traders stayed cautious ahead of Powell’s Jackson Hole remarks. The S&P 500 slipped 0.4% and the Nasdaq 100 lost 0.5%, while the Dow fell 0.3%. Walmart sank 4.5% after its first earnings miss since 2022 refocused attention on consumer margins, while Hewlett Packard Enterprise rose 3.7% after a Morgan Stanley upgrade citing networking upside. Tesla eased 1.2% as a new NHTSA audit and reports of a fire at its German plant kept headline risk elevated. Focus turns to Powell’s speech for guidance on the September path.
Europe
Europe finished muted as macro prints steadied but stock specifics drove rotation. The Euro Stoxx 50 fell 0.2% and the STOXX 600 was flat, while Germany’s DAX edged up 0.1%. Novonesis dropped 7% after guidance and margin disappointment, contrasting with Aker BP’s 2.6% gain on a North Sea discovery that supported energy. With Jackson Hole in view, investors stuck to idiosyncratic catalysts and waited for the next policy cue.
Asia
Asia’s tone was weak on the prior close set, with tech and consumption names lagging. Japan’s Nikkei 225 fell 0.6% and Hong Kong’s Hang Seng slipped 0.2%, while China’s CSI 300 rose 0.4% as onshore sentiment improved. Baidu fell 2.6% after a revenue miss, and Meituan dropped 3.1% with consumer internet under pressure; Xiaomi slid 2.3% on softer handset expectations. Policy events and Jackson Hole kept risk tight across the region.
UK
The FTSE 100 edged up 0.2% to a record close as defensives offset single-name shocks. WH Smith plunged 40.0% after uncovering an accounting error and withdrawing guidance, while AstraZeneca gained 0.6% amid healthcare strength and BP added 0.1% as oil steadied. The index’s new high masked unusually wide single-stock dispersion, leaving positioning sensitive to upcoming U.S. policy signals.
Digital Assets
Bitcoin closed at $112,746 (+0.3%) and Ether at $4,280 (+1.4%) on the official 00:00 UTC marks. U.S. spot BTC ETFs recorded about $194m in net outflows, while U.S. spot ETH ETFs drew roughly $288m in net inflows, led by BlackRock’s ETHA (+$234m).
Volatility
The curve sits in contango with spot VIX below the Sep future. Short-dated vol (VIX1D) moved up into event risk while 1-month term premium held near 2 points over spot, keeping hedges affordable relative to realized. Using VIX 16.6 and the SPX 6,370.17 close, the VIX-based daily move is ~66.6 points, or 1.0%.
Fixed Income
- Global sovereign bond yields rose yesterday, with US benchmark 10-year and 30-year yields still within recent ranges while German and UK long yields are pushing at the top side of the range, and in the UK’s case, the top of the multi-year range for the benchmark 30-year Gilt yield.
- Japanese government bonds teased the cycle- and multi-year highs at the long end of the yield curve as the benchmark 10-year JGB rose to touch the 1.62% high and the benchmark 30-year yield likewise rose to threaten the highs above 3.2%.
Commodities - The Bloomberg Commodity Index is heading for a small weekly gain, with strong gains across the agriculture sector—led by coffee, corn, and cattle—and a recovering energy sector (excluding natural gas) offsetting broad weakness across industrial metals, while the precious metals trade mixed.
- Crude oil prices look set for a weekly rebound, supported by short covering after WTI and Brent found support near USD 62 and USD 65, respectively. While an oil-negative OPEC+ production hike remains, prospects for a Russia–Ukraine peace deal have faded. Instead, attention has returned to a price-positive expansion of US secondary sanctions against buyers of Russian oil—especially India, which accounts for 37% of Russia’s oil exports.
- Gold is gearing up for a breakout from its narrowing range—determined by the 50- and 100-day moving averages, today at USD 3,346 and USD 3,316. The direction may be determined by today’s speech from Fed Chair Powell, as the market seeks clarity about rate cuts, the expected pace of which has slowed this week—allowing the dollar to gain strength, thereby weighing on prices.
- Arabica coffee futures are trading up 24% this month, supported by weather risks in top grower Brazil and a reduced flow of beans to the US—where the futures contract is traded—from Brazil amid Trump tariffs on imports.
Currencies
- The US dollar rose to new local highs against several currencies yesterday as treasury yields rose. USDJPY pulled back above 148.50 for the first time in almost three weeks and EURUSD punched below 1.1600.
- AUD, NZD and CAD all dipped to new lows versus the stronger US dollar, with USDCAD clearing 1.3900 for the first time in three months and NZDUSD the first G10 USD pair to drop below its 200-day moving average.
For a global look at markets – go to Inspiration.
