Market Quick Take - 3 July 2025
Q3-2025 Macro Outlook: Less chaos, and hopefully a bit more clarity
Market Drivers and Catalysts
- Equities: US tech rally, tariff relief, UK political stress, Asia mixed.
- Volatility: VIX stays low, SPX expected move ±33pts, jobs data ahead.
- Digital Assets: Bitcoin, Ethereum, IBIT, ETHA higher; Ripple, COIN, MSTR in focus.
- Fixed Income: Gilts-led weakness across global bond markets.
- Currencies: Broad but limited dollar gain led by GBP slump.
- Commodities: Gold trades higher ahead of jobs report; copper market tightness.
Macro Events
Key macro events include the US June Nonfarm Payrolls and Unemployment Rate, which are highly anticipated by the market.
Macro Data and Headlines
In June 2025, US ADP private businesses lost 33K jobs, marking the first decline since March 2023, falling short of the forecasted 95K job gain. Former President Trump criticized Federal Reserve Chair Jerome Powell, calling for his resignation due to delayed interest rate cuts. Trump also announced a new trade agreement with Vietnam, reducing tariffs significantly.
In the UK, political uncertainty arose as Prime Minister Keir Starmer failed to support Chancellor Rachel Reeves, leading to market slumps.
Market Overview
Equities
US stocks reached record highs, with the S&P 500 rising 0.5% and the Nasdaq jumping 0.8%, driven by tech leaders like Apple and Nvidia. European markets also closed higher, with the DAX and CAC 40 gaining, while UK stocks lagged due to political jitters.
Volatility
Market volatility remains subdued, with the VIX closing at 16.64. The expected move for the S&P 500 is ±33 points, indicating a calm trading environment.
Digital Assets
Crypto markets regained momentum, with Bitcoin and Ethereum showing gains. Institutional demand remains strong, with notable increases in ETFs related to these digital assets.
Fixed Income
Treasuries faced losses ahead of the US jobs report, with a global bond selloff led by UK gilts. Speculation about political changes in the UK contributed to rising yields.
Commodities
Crude prices rose initially but faced downward pressure due to increased supply. Copper prices surged due to tight supplies, while gold traded higher amid fiscal concerns.
Currencies
The USD experienced modest gains, particularly against the GBP, which faced political uncertainty. The EUR remained stable after recent highs.
Upcoming Earnings Events
Next week, notable earnings reports are expected from companies such as The Progressive Corporation, Delta Airlines, and others.
Conclusion
The market outlook for Q3-2025 suggests a focus on diversification and careful monitoring of macroeconomic indicators as investors navigate through political and economic uncertainties.