Market Quick Take – 1 July 2025

Market drivers and catalysts

• Equities: US record highs; tariff deadline looms; tech leads; EU cautious; UK trade deal relief; Asia mixed
• Volatility: VIX low; nerves calmed; payrolls and earnings in focus
• Digital assets: Bitcoin steady; IBIT inflows; ETHA stable; Solana ETF debut; crypto stocks rise
• Fixed Income: US long treasury yields dip to almost two-month low
• Currencies: USD weakness continues as EURUSD touched 1.1800 overnight
• Commodities: Dollar weakness lift gold and silver. Crude challenged by OPEC+ production focus
• Macro events: Germany unemployment, US ISM Manufacturing & May JOLTS Job Openings

Macro data and headlines

• US Senate Republicans are scrounging around for votes to pass their version of the USD 3.3 trillion “big, beautiful bill”, with eight Republicans still said to be holding out, when they only hold a three-vote majority. As of early European hours, the Senate is still in session and will vote on amendments of the controversial healthcare cuts and anaggressive clean energy phase out schedule
• China’s Caixin manufacturing PMI rebounded in June to 50.4 from 48.3 in May, suggesting relief after a trade-war truce with the US led to a recovery in both supply and demand.
• Germany’s annual consumer price inflation fell to 2.0% in June 2025, below May's 2.1% and market expectations of 2.2%. This is the lowest since October 2024 and aligns with the European Central Bank’s target for the first time since then.
• EU is willing to accept the 10% universal tariffs but wishes for lower rates on key sectors like automobiles, car parts, steel and aluminium.
• Bank of Japan’s index for large manufacturers increased to 13 in Q2 2025 from 12 in Q4, surpassing market forecasts of 10, amid rising U.S. tariffs.
• The Dallas Fed’s Texas manufacturing index improved to -12.7 in June 2025 from -15.3 in May, indicating a fifth month of contraction but with easing signs. Output remained flat, with the production index steady at 1.3.

Macro calendar highlights (times in GMT)

• 0755 – Germany June Unemployment Change
• 0800 – Eurozone June Manufacturing PMI (final)
• 0830 – UK June Manufacturing PMI (final)
• 0900 – Eurozone Flash June CPI
• 1345 – US June Manufacturing PMI (final)
• 1400 – US June ISM Manufacturing
• 1400 – US May JOLTS Job Openings, Construction Spending

Earnings events

• Today: Constellation brands

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

Equities

• US: US stocks closed out the month and quarter at record highs, with the S&P 500 and Nasdaq both up 0.5% and the Dow rising 0.6%. Big Tech, including Microsoft and Meta, led the rally; Apple climbed 2% on AI partnership news. Optimism was fueled by trade deal progress, especially after Canada scrapped its digital services tax, and expectations for Fed rate cuts as Treasury yields fell. Investors remain focused on President Trump’s July 9 tariff deadline and upcoming jobs data, while most sectors stayed positive with financials and tech outperforming.
• Europe: European markets started the week lower, with the STOXX 50 and STOXX 600 both down 0.4%. Caution prevailed ahead of US tariff deadlines, even as trade negotiations made headway and Canada dropped its digital tax. Inflation in Germany slowed to 2%, matching ECB targets, while mixed corporate results saw L’Oréal rise 2.3% and Siemens decline. For the month, the STOXX 50 slipped 0.9%, weighed by trade uncertainty and modest economic data.
• UK: The FTSE 100 slipped 0.4% Monday despite confirmed Q1 GDP growth of 0.7%. The new UK-US trade deal provided some relief, reducing tariffs on autos and aerospace. Sector performance was mixed, with Rolls-Royce and Auto Trader gaining, while homebuilders lagged. Mortgage approvals beat expectations, suggesting underlying economic resilience, but inflation concerns linger. The FTSE 100 ended the quarter up 2.1%, with year-to-date gains over 7%.
• Asia: Asian equities posted mixed results as Wall Street’s record highs buoyed sentiment but Japan’s Nikkei dropped 1% on renewed US tariff threats. South Korea’s KOSPI led regional gains, up 1.6% as Samsung rallied. China’s markets edged higher after a positive manufacturing PMI, while Hong Kong remained closed for a holiday. Mainland money continues to flow into Hong Kong stocks, driving a 21% rally for H1 2025, with investors seeking value and yield.

Volatility

Market volatility remains subdued, with the VIX closing at 16.73—well below recent stress levels—while the short-term VIX1D fell to 10.17. This suggests investor nerves have eased after a choppy second quarter. The 3-month VIX sits near its post-pandemic average, indicating only moderate swings expected ahead. For long-term investors, calmer markets provide a breather as attention shifts to Friday’s US payrolls and Q2 earnings.

Digital Assets

Bitcoin holds steady near $107,000, and Ethereum trades around $2,455, both at the high end of June’s range. BlackRock’s IBIT ETF continues to attract inflows, supporting prices and giving mainstream investors a steady on-ramp; IBIT’s NAV is up 14% year-to-date. ETHA (Ethereum ETF) remains in focus after recent outflows but still offers institutional exposure. Crypto-related stocks like MicroStrategy and mining firms posted strong gains. The first US staked crypto ETF (focused on Solana) launches this week, reflecting growing market innovation.

Fixed Income

• US Treasury yields slumped to new cycle lows at the long end of the yield curve, with the 10-year treasury benchmark hitting 4.2% for the first time since May 2. At the short end of the curve, the move was less pronounced as the 2-year benchmark pushed toward the recent cycle low of 3.70% ahead of key US data, especially the June US jobs report up on Thursday (because US markets are closed on Friday).
• Germany’s 10-year Bund yield continues to ignore the US Treasury market, with the benchmark rising marginally to close near 2.61%. This narrowed the yield differential between US and German debt to -160 basis points, the narrowest since the March-April time frame, when the market was absorbing the German intent to launch a vast fiscal expansion. The cycle high of that yield spread was -138 basis points.

Commodities

• The Bloomberg Commodity Index TR fell 2.8% in Q2, leaving the index, which tracks 24 major commodities, up 5.9% on the year. The weakness was led by a 10% drop in energy, and a 3.8% fall in agriculture prices, while industrial metals traded close to flat, and precious metals traded higher by 4.6%. It is worth noting that cocoa and platinum, the two highflyers with 23% and 34% gains respectively, are not included in the index.
• Oil prices trade near a one-month low, falling for a second day amid focus on OPEC+'s upcoming output quota increase, where the group may agree to another 411,000-barrel-per-day hike for August, for now only partly offset by potential trade deals improving the demand outlook.
• Gold and silver both bounced yesterday after finding support ahead of their recent lows, in gold at USD 3,245 and silver from the USD 35.30–40 area, while platinum continues to consolidate following last month's 30% rally, with support so far being found at USD 1,325. The continued dollar weakness, down almost 11% in the first six months, as well as rate cut expectations in the second half, remain two key sources of support.
• The grains sector trades lower for a second day after the USDA reported larger-than-expected soybean and wheat stocks. In addition, corn futures are pressured by strong crop conditions and adequate supplies, while wheat is being weighed down by seasonal harvest pressure

Currencies

• The euro-heavy US dollar index fell to new cycle lows yesterday as EURUSD briefly teased above 1.1800 overnight before dropping back slightly and USDCHF closed south of 0.8000 yesterday, hitting 0.7920 overnight as EURCHF also fell. USDCHF has only ever posted a weekly close below 0.8000 in an episode in late 2011 during the Eurozone sovereign debt crisis.
• Choppy USDJPY fell back toward 143.50 overnight after backing up yesterday to 144.50, but remains embedded in the range to the low 142.00’s and the bigger range toward 140.00.
• AUDUSD managed to clear recent range highs of 0.6565, but has posted several new highs since first clearing 0.6400 back in late April without notable upward trending, perhaps in part as concerns about China’s economy weigh.

For a global look at markets – go to Inspiration.