Market Quick Take – 29 August 2025

Market drivers and catalysts

• Equities: U.S. stocks climbed as GDP growth was revised to 3.3% and labor data eased worries on recession; Europe slipped; Asia weakened, led by Japan’s gain offset by Hong Kong’s near 1% drop
• Volatility: VIX dropped to about 14.43, mildly lower; curve appears in slight contango, signaling calm. Options suggest c. 1 % SPX swing
• Digital Assets: BTC and ETH slight up. U.S. spot ETH ETFs and BTC ETFs both drew net inflows
• Fixed Income: Modest US yield curve flattening as 10-year yield drops
• Currencies: USD weaker, especially against smaller G10 currencies, CNH
• Commodities: Weekly gain led by crude, natgas, copper and gold
• Macro events: US July Personal Income Spending & August Uni of Michigan Sentiment

Macro headlines

• Federal Reserve Governor Christopher Waller signaled support for rate cuts, saying he backs a reduction in September and expects further easing over the next three to six months, guided by incoming data. He warned that risks of an undesirable weakening in the labor market have risen, arguing the FOMC should begin cutting rates now.
• Japan's retail sales rose 0.3% year-on-year in July 2025, markedly slower than June's revised 1.9% and below the expected 1.8% rise. It was the slowest growth since February 2022 yet marked the 40th consecutive increase.
• Tokyo's core consumer prices rose 2.5% year-on-year in August 2025, above the BOJ’s 2% target. Governor Ueda expects wage increases amid a tight labor market, hinting at possible rate hikes. The BOJ paused hikes in July due to U.S. tariff concerns but raised its inflation outlook.
• Japan's industrial production dropped 1.6% in July 2025, reversing June's 2.1% rise and exceeding the expected 1.0% decline. It was the steepest fall since November 2024, impacted by U.S. trade uncertainty, weak demand, and pressure on autos and steel industries.
• Japan's unemployment rate fell to 2.3% in July 2025, below the expected 2.5% and the lowest since December 2019. Unemployment dropped by 80 thousand to 1.64 million. Employment decreased by 10 thousand to 68.31 million, and the labor force shrank by 110 thousand to 69.93 million.
• The U.S. economy grew at an annual rate of 3.3% in Q2 2025, rebounding from a 0.5% contraction in Q1. Revised figures showed higher investment (5.7%) and consumer spending (1.6%), offset by lower government spending (-0.2%) and revised imports (-29.8%).
• U.S. pending home sales decreased by 0.4% in July 2025, following a 0.8% drop in June, marking the first consecutive decline since January. Sales fell in the Northeast (-0.6%), Midwest (-4.0%), and South (-0.1%), compensating for a 3.7% rise in the West.
• U.S. initial jobless claims dropped by 5,000 to 229,000 in the week ending August 23, slightly below expectations. Continuing claims fell by 7,000 to 1,954,000. While not signaling rapid labor market deterioration, concerns about hiring slowdown persist.

Macro calendar highlights (times in GMT)

• August CPIs from France (0645), Spain (0700), Italy (0900) & Germany (1200)
• 1230 – Canada 2Q GDP
• 1230 – US July PCE Inflation
• 1230 – US July Advance Goods Trade Balance
• 1400 – US Final August University of Michigan Sentiment

Earnings events

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

Earnings next week

• Tue: Alimentation Couche-Tard, ZScaler
• Wed: Salesforce, Figma, Hewlett Packard, Dollar Tree,
• Thu: Broadcom, Copart, Lululemon
• Fri: Kroger

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

Equities

USA
U.S. stocks gained Thursday on renewed optimism from a second quarter GDP upward revision to 3.3% and muted jobless claims, which fed expectations of sustained economic strength. The S&P 500 rose 0.3% to 6,501.86, marking its 20th record close of the year, while the Nasdaq added 0.6% and the Dow gained 0.2%. Nvidia beat on earnings but guidance excluding China weighed on shares; nevertheless, tech leaders including Broadcom, Amazon and Alphabet helped offset weakness. CrowdStrike jumped 4.6%, HP 1.9%, and Snowflake surged 20% on earnings, reinforcing investor confidence amid AI themes. Attention shifts to Friday’s PCE inflation data as markets assess Fed policy trajectory.

Europe
European stocks gained on Thursday. Pernod Ricard gained 1.4% after solid quarterly results, while Nvidia's results alleviated AI demand concerns. The STOXX 600 rose 0.3% to 553.7, with France’s CAC 40 climbing around 0.2%. FTSE indices fell for a third straight day. The FTSE 100 declined approximately 0.4% to 9,216.8, weighed down by tech and utilities. Luxury peers LVMH and Remy Cointreau advanced on the back of Pernod Ricard’s performance. Semiconductor names were mixed: Infineon and ASM International up about 1%, ASML flat to down. Focus shifts to political risks in France ahead of a confidence vote.

Asia
Asian markets slipped. The MSCI Asia‑Pacific ex‑Japan index declined 0.2% amid investor caution after Nvidia's earnings beat came with weak China-related guidance. Japanese shares edged higher, with the Nikkei 225 up 0.7%, despite disruptions in trade talks. South Korea’s market rose 0.3% after the Bank of Korea held rates at 2.5%. Hong Kong’s Hang Seng index fell almost 1% to close at 24,999—its third consecutive decline—led by a 13% plunge in Meituan after its Q2 profit dropped and fears of rising food delivery competition.

Digital Assets

Bitcoin trades near $112,526, up roughly 1.2% on the day Ethereum holds around $4,508–$4,510, up slightly. Spot Ethereum ETFs attracted approximately $307 million in net inflows, significantly outpacing Bitcoin ETFs’ $179 million.

Volatility

The VIX index sits near 14.43, down around 2.8%. Mild contango persists between spot and front-month VIX futures, implying continued low volatility. SPX options suggest an expected daily move of roughly 1%.

Fixed Income

• US Treasury yields were steady to slightly higher at the front end of the yield curve, while longer yields pushed lower toward the lows of the recent range in a yield curve flattening move. The 10-year benchmark treasury yield closed near 4.20%.
• The Germany-France 10-year yield spreads tightened slightly to 78 basis points as France’s long yields reversed lower yesterday. French Finance Minister Lombard dismissed concerns of a financial crisis in the country, claiming that deficit reduction targets are on track this
• Japan’s government bond yield curve flattened slightly as 2-year JGB yields rebounded and the 10-year yield fell slightly to 1.615% after briefly touching new multi-year highs yesterday above 1.64%.

Commodities

• The Bloomberg Commodity Index is on track for a second consecutive weekly gain and its second-highest monthly close in three years. Strength was led by energy, with WTI, Brent and natural gas advancing, alongside gains in copper and gold. Together, these five contracts make up 43% of the index, enough to outweigh broad losses across the agricultural sector.
• Gold holds a weekly gain, trading above USD 3,400, with traders focusing on today’s PCE inflation print, Fed’s Waller calling for several rate cuts, and continued worries over Fed independence.
• Silver meanwhile trades near unchanged on the week as it struggles to gain a foothold above USD 39, partly driven by selling pressure from the expiring September futures contract as traders unwind instead of paying 50 cents to roll into the December contract.
• Crude prices remain range-bound, with geopolitical tensions being more than offset by expectations for an oversupplied market into the final quarter and beyond, as eight OPEC+ producers take aim at their raised production targets.

Currencies

• The US dollar traded weaker yesterday, falling against the Euro as EURUSD remains stuck in the range between 1.1600 and 1.1700 and USDJPY in the 146.50-148.00+ range. But against commodity currencies and the smaller G10 currencies, the greenback weakened more sharply, with AUDUSD posting a 10-day high (and AUD perhaps in part inspired by CNH strength) and USDCAD close to range lows since late July.
• China set the fixing rate stronger yesterday and USDCNH dropped the most in a single session since early May and to a new low since November of last year, a sign that China is allowing its currency to reflect more of the broader USD weakness since the beginning of the year.

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