Market Quick Take - 11 July 2025

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

Market Drivers and Catalysts

• Equities: New highs in the US; escalating tariffs; technology and travel sectors lead; hopes for EU deals boost Europe.
• Volatility: VIX near March lows; short-term volatility decreases; SPX priced for small movements.
• Digital Assets: Bitcoin up 1.74%; Ethereum breaks $3K; ETF inflows surge; shorts liquidated.
• Fixed Income: US Treasuries remain steady post-government sales.
• Currencies: Tariff concerns support a slight weekly gain for the USD.
• Commodities: Weekly gains in copper and silver offset broad losses in agriculture.

Macro Events

Key macroeconomic data includes UK trade and production figures and Canada's unemployment rate. Notably, Trump has threatened a 35% tariff on certain Canadian goods effective August 1, indicating a potential escalation in trade tensions.

Macro Data and Headlines

Initial jobless claims in the US fell by 5,000 to 227,000, marking a fourth consecutive decline, although ongoing claims rose to 1,965,000, the highest since 2021, raising concerns about hiring trends.

Market Overview

Equities

US markets saw the S&P 500 and Nasdaq reach new highs despite tariff escalations. Nvidia and Tesla stocks rose significantly, while Delta Air Lines surged on strong quarterly results.

Europe

European equities experienced slight gains, but caution looms due to potential tariff hikes from the US. The STOXX 600 index rose, led by luxury and mining stocks.

UK

The FTSE 100 reached an all-time high, driven by mining stocks reacting to tariff news. Trade deals with Japan and France provided additional support.

Asia

Asian markets were mixed, with Hong Kong's Hang Seng index rising significantly, while other markets like the KOSPI and Nikkei faced declines due to trade fears.

Volatility

Volatility remained low, with the VIX at its lowest since March. Investors appear comfortable holding risk ahead of the upcoming earnings season.

Digital Assets

Bitcoin surged past $118,000, with significant ETF inflows. Ethereum also saw gains, and altcoins followed suit, indicating strong market momentum.

Fixed Income

The 10-year US Treasury yield stabilized at 4.35%, with expectations of potential rate cuts from the Fed later this year.

Commodities

The Bloomberg Commodity Index remained flat, with gains in metals offset by losses in agriculture. Crude oil prices fell due to oversupply concerns.

Currencies

The USD is poised for its first weekly gain in three weeks, supported by tariff concerns affecting major currencies.

Conclusion

The market outlook for Q3-2025 suggests a need for diversification as geopolitical tensions and trade policies continue to shape economic conditions.