Market Quick Take – 8 July 2025

Q3-2025 Macro Outlook: Less chaos, and hopefully a bit more clarity

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Market drivers and catalysts

• Equities: Trump tariffs shake markets; Tesla tumbles; banks and German data lift EU stocks
• Volatility: VIX jumps; short-dated vol signals near-term jitters; SPX move seen at ±0.51%
• Digital assets: Bitcoin flat; strong ETF inflows continue; ETHA assets climb above $4.5B
• Fixed Income: US Treasury yields climb on tariff threats and ahead of key auctions
• Currencies: Aussie dollar jumps as RBA hold rates steady
• Commodities: Crude shrugs off OPEC hike amid tight fundamentals; range-bound gold finds support on tariff risk
• Macro events: US 3-year Note Auction

Macro data and headlines

• President Donald Trump unveiled letters that threaten to impose a 25% tariff rate on key trading partners, including Japan and South Korea, with a deadline of at least 1 August. However, in usual TACO style, he said he was open to additional negotiations and that the deadline was "not 100% firm", indicating he would look favourably on countries offering concessions. Additional tariffs of 25%–40% were imposed on 14 countries, including South Africa and Thailand. Treasury Secretary Bessent indicated upcoming trade announcements before Wednesday's deadline.
• The Reserve Bank of Australia (RBA) surprised the market by keeping interest rates unchanged at 3.85%, saying it was waiting for “a little more information to confirm that inflation remains on track to reach 2.5 per cent on a sustainable basis amid uncertainties about US tariff plans and their impact.

Macro calendar highlights (times in GMT)

0600 – Germany May Trade Balance
0645 – France May Trade Balance
1700 – U.S. to Sell USD 58 billion 3-year Notes
1900 – US May Consumer Credit

Earnings events

Thursday: The Progressive Corporation, Fast Retailing, Cintas Corporation, Kongsberg, Delta Airlines

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

Q3-2025 Investor Outlook: Beyond American shores – why diversification is your strongest ally

Equities

• US: US stocks dropped as Trump reignited tariff tensions, announcing new levies on 14 nations with rates up to 40%, set to begin August 1. The S&P 500 fell 0.79%, the Dow -0.94%, and the Nasdaq -0.91%, led by losses in consumer discretionary and tech. Tesla sank 6.8% after Elon Musk launched a political party, unnerving investors. While traders had hoped tariff risk was behind us, markets are reassessing the economic impact of escalating trade actions, particularly on companies like Apple, AMD, and Toyota.
• Europe: European stocks were mixed Monday as gains in banks and upbeat German industrial data offset trade concerns. The DAX rose 1.2%, helped by Siemens Energy and Rheinmetall, while the CAC 40 added 0.35% as SocGen (+3.6%) and Safran (+2.0%) led gains. However, Shell (-1.6%) and Capgemini (-5.8%) dragged on sentiment. EU-US trade talks continue amid fears of blanket US tariffs. The Stoxx 600 finished 0.4% higher, but caution prevails heading into earnings season.
• UK: The FTSE 100 dipped 0.2%, pressured by Shell (-2.85%) after a weak Q2 update and falling oil prices. BP also declined 2%. Broader uncertainty over Trump’s trade deadline weighed, as the UK seeks to avoid a 50% tariff on steel exports. Miners underperformed on lower copper and gold prices, despite Halifax housing data showing stabilisation. Investors remain focused on finalising a trade deal with the US before the August 1 tariff implementation.
• Asia: Asian equities shrugged off tariff anxiety, buoyed by hopes Trump might remain open to negotiations. South Korea’s KOSPI jumped 1.77%, led by SK Hynix (+4.6%), while the Nikkei added 0.3%. Australia’s ASX 200 lagged (-0.2%) after the RBA left rates unchanged. Hong Kong’s Hang Seng bounced 0.6% following a three-day slide, with Xiaomi and Kuaishou gaining. China markets edged higher, while Malaysia and Indonesia underperformed on direct tariff risk.

Volatility

Volatility crept up Monday, with the VIX rising to 17.79 (+1.77%)—a clear, though not dramatic, uptick from last week’s levels near 16. Short-dated vol surged, with the VIX9D jumping 22.26%, reflecting near-term tariff unease. Still, ultra-short fear remains contained: the VIX1D fell nearly 20%. Traders seem alert, not panicked. Today’s SPX options imply an expected move of ±31.7 points (≈0.51%), suggesting investors are bracing for choppy sessions but not full-blown chaos.

Digital Assets

Bitcoin held steady around $108,015 (-0.24%) and Ethereum at $2,546 (+0.16%) despite rising macro tensions. Notably, BlackRock’s IBIT fell 1.27% to $61.40 but now commands $75B in AUM. ETHA slipped 1.18% to $19.26, though recorded a strong $52M inflow, pushing AUM above $4.5B. The data suggests institutions are using these ETFs to build long-term exposure, even during flat price days. Crypto-related stocks underperformed: MicroStrategy -2.06%, Marathon -5.1%, CleanSpark -7.5%.

Fixed Income

• US Treasuries fell ahead of upcoming supply, starting today with the sale of 3-year Notes, Trump's trade letters, and the FOMC Minutes. US 2- and 10-year Notes trades near 2-week highs at 3.90% and 4.40% respectively, having risen by 10 and 20 basis points from their recent lows.
• Japan’s super-long bonds extended their recent declines Tuesday, pushing the yield on 30-year securities toward a record high above 3% as political risks continue to cast a shadow over the nation’s financial markets.
• Australia’s 10-year yield rose 9 basis points to near a one-month high at 4.27% on the no-change decision from the RBA

Commodities

• Crude prices rallied strongly on Monday after traders concluded that current market conditions could absorb the bigger-than-expected OPEC+ production increase, with increased compliance from overproducers limiting the actual impact. Brent rose near USD 70, supported by surging gas oil futures amid a very tight diesel market, before suffering a mild setback on renewed tariff concerns.
• Gold’s 12-week consolidation period continues after prices once again bounced from USD 3,300 support – ahead of another key level below at USD 3,245 - after Trump’s tariff threats helped offset the negative impact of a stronger dollar and rising bond yields.

Currencies

• The AUD spiked higher, reaching 0.6558 overnight after the RBA surprised investors by keeping interest rates unchanged, thereby retracing most of Monday’s losses, for now leaving it stuck in a relatively tight range below 0.66 resistance.
• The USD received a bid as Trump stepped up his tariff attack, only to soften again as the door was kept open for negotiations ahead of the new 1 August deadline. Overall, the BBG DXY trades up 0.4% on the week, with gains being led against JPY, as political and tariff uncertainty see USDJPY above 146 for a second day.

For a global look at markets – go to Inspiration.