Market Quick Take – 18 August 2025

Market drivers and catalysts

Macro headlines

• Trump’s unsuccessful meeting with Putin in Alaska saw him walk back on his own call for a ceasefire while reportedly endorsing a Russian demand for Ukraine to cede the Donbas region, including territory currently controlled by Ukraine forces. He will meet Zelenskiy and European leaders Monday to address Europe's deadliest war in 80 years. Trump also postponed immediate tariffs on nations buying Russian oil, such as China, but may consider them soon.
• The annual Economic Policy Symposium will kick off Thursday evening in Jackson Hole, Wyoming, where Chair Jerome Powell is expected to unveil the Fed's new policy framework. Powell's speech could give Fed watchers a fresh update on how much support there is to lower rates in September, as policymakers have become divided on when to resume rate cuts.
• University of Michigan's US consumer sentiment dropped to 58.6 in August 2025 from 61.7 in July, below the expected 62, driven by inflation concerns and poor buying conditions for durable goods. Despite slight improvement in future personal finances, inflation and unemployment worries persist.
• US retail sales increased 0.5% in July 2025, matching forecasts after a 0.9% rise in June. Leading gains were motor vehicle & parts dealers (1.6%) and furniture stores (1.4%), with other increases in sporting goods, nonstore retailers, clothing stores, and gasoline stations.
• US industrial production fell 0.1% in July 2025, missing expectations of a flat result, after a revised 0.4% rise in June. Manufacturing output, comprising 78% of total production, rose 0.1% after a 0.3% increase in June.  

Macro calendar highlights (times in GMT)

Zelenskiy and European leaders to meet Trump in Washington
1215 – Canada Jul. Housing Starts
1400 – US Aug. NAHB Housing Market Index
1645 – US Fed’s Bowman to speak

Earnings events

Note: earnings announcement dates can change with little notice. Consult other sources to confirm earnings releases as they approach.

Next Week:

• Mon: Palo Alto Networks, BHP
• Tue: Home Depot, Medtronic
• Wed: TJX Companies, Lowe’s, Analog Devices, Estee Lauder, Target
• Thu: Walmart, Intuit, Ross Stores, Workday

Equities

USA: U.S. stocks ended mixed on Friday. The S&P 500 fell by 0.3%, while the Nasdaq dipped 0.4%, driven by weakness in chipmakers. AMAT -14% on weak guide; Intel rose 3% on report of possible U.S. stake. The Dow gained 35 points, supported by a 12% rise in UnitedHealth following Berkshire Hathaway's stake disclosure. Retail sales for July were up 0.5%, in line with expectations, but consumer sentiment dropped to 58.6 (from 61.7) amid inflation concerns. For the week, the S&P 500 gained 0.9%, the Nasdaq 0.8%, and the Dow 1.7%.

Europe: European stocks posted modest gains on Friday, extending a fourth consecutive day of advances. The Stoxx 50 and Stoxx 600 edged higher as investors remained hopeful about potential progress at the upcoming Trump-Putin summit. Pandora dropped 18% after reporting a 15% decline in Chinese sales but maintained its 2025 growth and margin outlook. European equities marked a second weekly gain, though optimism for U.S. rate cuts waned following a sharp rise in July's PPI data.

Asia: Mixed performance in Asia. Japan and Taiwan saw gains, while Hong Kong’s Hang Seng dropped by 1% due to weak Chinese economic data. NetEase fell 3.5% after disappointing earnings. Beijing introduced measures to support consumer demand and assist the struggling property market. Singapore's STI declined by 0.6%, with UOB and DBS going ex-dividend on Friday.

UK: The FTSE 100 closed lower on Friday, August 15, 2025, but remained near recent record highs. While Admiral and Aviva both posted declines, they had seen strong performances earlier in the week. Centrica announced an agreement to buy 50% of National Grid’s Grain LNG terminal in a £1.5B joint venture. Despite the Friday decline, the UK index continued to be supported by its strong recent run, with investor caution lingering amid broader market trends.

Volatility

Digital Assets

Fixed Income

• US Treasury yields rose again on Friday, perhaps in part on the preliminary August University of Michigan survey showing that short and long-term inflation expectations are sharply higher. The benchmark 2-year treasury yield backed up a couple of basis points to 3.75% while the benchmark 10-year US treasury yield briefly rose to a new two week high at 4.33% before easing back lower in Monday’s Asian session to start the week.
• Japan’s government bond yields rose to new local highs overnight and are close to threatening the highs for the cycle in the case of the benchmark 10-year JGB yield, which rose to 1.59%, just two basis points below the cycle- and post-2008 high. Later in the session, the yield dipped back below 1.58%.

Commodities

• Crude prices are steady after the Trump–Putin summit failed to deliver a breakthrough and Trump postponed immediate tariffs on nations buying Russian oil, including China. Market focus now shifts to today’s Washington meeting for signs of a deal that could eventually boost crude and gas supply. Meanwhile, in the week to August 12, speculators held the first-ever combined net short position in WTI (CME & ICE), leaving prices exposed to any upside surprises.
• Gold remains stuck around USD 3,350, near the midpoint of the range that has prevailed for months, as traders await the next trigger—potentially a U.S. rate cut or renewed focus on rising U.S. debt supporting demand for tangible and alternative assets. Attention is also on the annual Jackson Hole summit starting Thursday, as well as today’s meeting in Washington.

Currencies

• The JPY weakened overnight across the board, perhaps as risk sentiment remains steady after the Trump-Putin in summit very late on Friday and as US treasury yields closed the week higher. USDJPY bobbed higher to 147.50+ overnight before easing back after closing last week at 147.19.
• AUD and NZD were the strongest currencies overnight, as AUDUSD remained pinned above 0.6500 after the steep sell-off from a 0.6569 high last Thursday. 

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