Erik Schafhauser Zürich

Morning Brew July 31 2025

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Good morning,

The data spree is underway with one day down and two to go, and the market moves have been spectacular. Despite strong GDP figures and somewhat hawkish comments from Fed Chair Jerome Powell, equities closed a bit lower yesterday. However, strong earnings from Microsoft and Meta helped mitigate losses.

Powell stated it was too soon to determine whether the central bank would cut rates at its next meeting in September, noting that current policy is modestly restrictive but not holding back the economy. Futures traders have adjusted their expectations, now pricing in a 46% probability of a rate cut by September, down from about 65% a day earlier. The projected year-end rate is 10 basis points higher than yesterday. Donald Trump will not be happy, he wants rates to be lowered faster. For the first time since the 1990s, two members formally dissented with the rate decision and wanted to cut rates. Looking at the headline data, there is no reason for a cut, inflation remains firmly above the 2% target and unemployment low. 

Meta and Microsoft added half a trillion dollars in market capitalization, causing Nasdaq futures to rise 1.2% and the S&P 500 to increase by 0.8%. Meta gained more than 10% after hours, while Microsoft rose by 8.5%.

Charu commented on Meta’s strong quarter: "Meta’s blowout quarter: AI payoff fueling bigger bets." Key points include:

  • Strong Q2 beat: Meta experienced 22% revenue growth and a 36% jump in profits, driven by AI-enhanced ad targeting and increased engagement across Reels and WhatsApp Business.
  • Evolving AI strategy: Meta is transitioning from open-source models to a more closed, consumer-first approach with its “personal superintelligence” vision, setting itself apart from enterprise AI competitors.
  • Rising capex, rising stakes: With annual AI infrastructure spending projected to reach $105 billion, Meta’s execution will be closely watched—particularly if economic headwinds slow ad revenue growth.

China's cyberspace regulator has requested U.S. semiconductor maker Nvidia to explain whether its H20 artificial intelligence chips have any backdoor security risks. Meanwhile, Renault reported a loss of €11 billion, driven by a first-half net loss attributable to the group of €11.19 billion.

Current market data:

  • The US 500 is trading at 4423, the US tech 100 is at 23,655, the GER40 stands at 24,300.

The U.S. dollar surged higher yesterday, with the USD Index testing the 100 level before reverting to 99.70. EURUSD fell to 1.1430, GBPUSD to 1.3266, and USDJPY is at 148.80 following the Bank of Japan's rate decision.

Metals sold off due to the strong USD and upcoming 50% tariffs on semi-finished goods in copper, set to take effect tomorrow. Refined Copper was exempt, causing the US price to revert to the London one. Gold is trading just below 3300, having found buyers at the 3250 support yesterday. Silver is at 37.20, 2 Dollars down from the high, Platinum at 1327, and copper futures fell sharply from above 560 to 443.

Today, we anticipate a plethora of data, with the PCE deflator being the highlight—this is the Fed's key inflation measurement. Economists expect a reading of 2.4%, with the core seen at 2.7%. French and German CPI would need a massive surprise to impact markets significantly.

After the bell, we expect earnings releases from Apple, Amazon, Coinbase, Reddit, Roku, and Cloudflare. Also, tomorrow marks the effect of Trump's tariffs against several trading partners: 25% tariffs against India, 50% against Brazil, and 15% against Korea, which may significantly shift local markets.

Finally, please note that tomorrow is the Swiss National Holiday, so there will be no updates from my side.

Have two great days ahead and trade safely!

 

Thursday, July 31, 2025

  • Swiss retail Sales-

Bank of Japan Interest Rate Decision & JGB Purchases: Critical for yen and global bond markets

- Chinese PMI (July): Update on manufacturing activity in the world’s second-largest economy

European CPI`s and EU Unemployment rate

- US PCE Price Index (June): The Fed’s preferred inflation metric

- Key Earnings: Apple, Mastercard, Amazon.com AbbVie, , Comcast, Roku, Reddit, Coinbase

 

Friday, August 1, 2025

- Swiss National Holiday

- US Nonfarm Payrolls (July): Flagship labor market report, forecast to show slowdown in hiring

- Japan Rate Decision

- US Unemployment Rate (July): Expected at 4.2%

- Average Hourly Earnings (July): Monitoring wage growth pressures

- US ISM Manufacturing PMI (July): Vital for near-term growth signals

- Eurozone Consumer Price Inflation (July): Crucial inflation readout

- Chinese Manufacturing PMI (July): Health of the world’s manufacturing engine

- Key Earnings: Chevron, Exxon Mobil, Colgate-Palmolive, Linde,

Quarterly Outlook

01 /

  • Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally

    Quarterly Outlook

    Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity

    Quarterly Outlook

    Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity

    John J. Hardy

    Global Head of Macro Strategy

    After the chaos of Q2, the quarter ahead should get a bit more clarity on how Trump 2.0 is impacting...
  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

The information on or via the website is provided to you by Saxo Bank (Switzerland) Ltd. (“Saxo Bank”) for educational and information purposes only. The information should not be construed as an offer or recommendation to enter into any transaction or any particular service, nor should the contents be construed as advice of any other kind, for example of a tax or legal nature.

All trading carries risk. Loses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money.

Saxo Bank does not guarantee the accuracy, completeness, or usefulness of any information provided and shall not be responsible for any errors or omissions or for any losses or damages resulting from the use of such information.

The content of this website represents marketing material and is not the result of financial analysis or research. It has therefore not been prepared in accordance with directives designed to promote the independence of financial/investment research and is not subject to any prohibition on dealing ahead of the dissemination of financial/investment research.

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.