Market Quick Take – 5 August 2025

Market drivers and catalysts

• Equities: Fed cut hopes lift global stocks; strong earnings; Lloyds, Palantir, Meta shine
• Volatility: VIX tumbles to 17.5; expected SPX move ±70pts today, ±115pts by Friday
• Digital assets: ETHA +4.7%; IBIT rebounds; ETH activity surges; MSTR, COIN, CIFR rally
• Fixed Income: Market quiet after Friday’s shock drop in US treasury yields. 3-year US treasury auction today.
• Currencies: Japanese yen rallies further, USD sideways
• Commodities: Rising supply weighing on crude; Metals supported by US rate cut hopes
• Macro events: US June Trade Balance & July ISM Services

Macro headlines

• U.S. markets rallied Monday, reversing most of Friday’s weak US-data driven slump amid increased rate cut hopes, while Berkshire Hathaway warned that Trump’s proposed tariffs—especially those targeting India over Russian oil—could hurt both its business and U.S.-India trade
• US manufactured goods orders fell 4.8% in June 2025, nearly matching expectations, marking the largest decline since April 2020. Transportation equipment orders dropped 22.4%, civilian aircraft orders fell 51.8%, and ship and boat orders decreased 20.0%, reversing large gains from May.
• Trump threatens a substantial tariff hike on India for buying Russian oil and selling it for large profits. The US is threatening secondary sanctions on countries that purchase Russian energy, with Matt Whitaker, the US ambassador to NATO, saying such sanctions are an "obvious next step" to try to bring the war in Ukraine to an end
• The Swiss government stated it isn't contemplating countermeasures against the US right now and is prepared to present a more appealing offer.
• A Japanese Labour Ministry panel suggested a 63 yen, or 6.0%, increase in the average minimum hourly wage for this fiscal year, the largest since at least 2002, compared to last year's 50-yen hike.
• US Treasury Secretary Bessent said Washington is hopeful for a deal with China after trade talks in Stockholm. Meanwhile, China's leaders pledged economic support and to curb "disorderly competition." Beijing announced its fourth plenum in October, likely addressing the next five-year plan.
• A chorus of stock market prognosticators at some of Wall Street’s biggest firms is warning clients to prepare for a pullback as sky-high equity valuations slam into souring economic data. Despite the near-term concerns, the warnings come with a big bullish caveat: In the event of a dip, buy it, with strategists emphasizing that the long-term bull market in stocks is still intact. (Bloomberg)

Macro calendar highlights (times in GMT)

• 0645 – France June Industrial Production
• 0800 – Eurozone July (Final) Services, Composite PMIs
• 0830 – UK July (Final) Services, Composite PMIs
• 0900 – Eurozone June PPI
• 1230 – US June Trade Balance
• 1345 – US July (Final) Services, Composite PMIs
• 1400 – US July ISM Services
• 1700 – US to Sell USD 58 Billion 3-year Notes

Earnings events

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

• Today: AMD, Caterpillar, Amgen, Eaton, Arista Networks, Pfizer, Transdigm, Supermicro
• Wednesday: Novo Nordisk, McDonalds, Disney, Uber, Shopify, AppLovin, DoorDash
• Thursday: Eli Lilly, Toyota, Siemens, Deutsche Telekom, Allianz, Sony, Gilead, Conoco Philips, Softbank Group, Constellation Energy, Rheinmetall

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

Equities

• US: Wall Street snapped a four-day losing streak on Monday, with the S&P 500 +1.47%, Nasdaq +1.95%, and Dow +1.34%. Gains were driven by rate cut optimism after July’s jobs data missed forecasts and past months were revised down. Bargain hunting dominated, particularly in tech and small caps (Russell 2000 +2.1%). Communication Services (+2.6%) and Tech (+2.2%) led sector gains, while Energy lagged. Palantir surged pre- and post-earnings, while Amazon dipped. Futures edged higher as investors looked ahead to today’s earnings from AMD, Pfizer, and Yum! Brands.
• Europe: European stocks rallied Monday, recovering from last week’s tariff-induced slump. STOXX 50 +1.5%, DAX +1.42%, and CAC 40 +1.06% as banks and insurers rebounded on bond strength and tighter spreads. UniCredit, BBVA, and Allianz gained over 3%. Swiss markets underperformed amid fresh US tariffs, but EU sentiment improved after a six-month suspension of countermeasures. UK’s FTSE 100 +0.66%, led by Lloyds (+8.4%) after a favorable court ruling on auto finance. BP climbed ahead of earnings and after a major oil discovery offshore Brazil.
• UK: London’s FTSE 100 rose 0.66% Monday, powered by banking stocks. Lloyds Banking Group +8.4%, NatWest +2.3%, and Close Brothers +23% after the Supreme Court eased fears over massive redress linked to car financing. The FCA now estimates a much smaller industry-wide liability than feared. BP gained 1.8% after unveiling its largest oil find in 25 years, and ahead of earnings. The pound firmed to $1.3287. Markets await Diageo and Fresnillo results, and possible Bank of England guidance later this week.
• Asia: Asian equities climbed on Tuesday, following Wall Street’s lead. KOSPI +1.59%, Taiwan’s TAIEX hit a 5-month high, and China’s CSI 300 rose after upbeat services PMI. Vietnam’s VNINDEX +2.5% hit a record. Rate cut bets surged after soft US labor data pushed the chance of a Fed move in September to 94%. South Korea led gains, with chip and EV battery makers like Samsung SDI (+10.2%) rebounding. China tech and property stocks also lifted sentiment, though tariff concerns continue to cast a shadow.

Volatility

• Volatility dropped sharply Monday as fears eased. The VIX fell 14% to 17.52, the biggest drop in 12 weeks. The ultra-short-term VIX1D plunged 44% to 11.15, reflecting calming nerves after last week’s tariff spike. The term structure is back in contango, and credit markets remain steady. Options pricing implies a ±70-point move for SPX today (~1.1%), and ±115 points (~1.9%) by Friday, suggesting moderate expectations ahead of ISM and CPI data later this week.

Digital Assets

• Crypto markets were mixed, with Bitcoin at $114,379 (-0.59%) and Ether at $3,663 (-1.55%). Yet institutional demand remains strong: BlackRock’s IBIT +1.53% recovered despite recent outflows, and ETHA +4.68% saw heavy buying on Monday. Ethereum sentiment remains upbeat as BitMine’s ETH treasury crossed $3B, reflecting rising confidence. Daily transactions hit a yearly high, supported by active address growth. Altcoins traded slightly lower, but crypto stocks like MSTR +6.17%, COIN +1.11%, and CIFR +5.27% rallied on bullish flows.

Fixed Income

• The rally in US Treasuries in the wake of the weak US jobs report Friday eased yesterday, although consolidation has been shallow, as the benchmark US2-year treasury yield backfilled to 3.73% before trading in a narrow range near 3.70%. The benchmark 10-year treasury yield traded somewhat differently, backfilling to 4.25% from the 4.20% low on Friday but sliding lower again to post marginal new lows overnight below 4.20%. The US ISM Services will point to the status of the Services sector.
• US high yield bond spreads tightened after Friday’s sharp widening, with the Bloomberg measure of High Yield bond spreads to US treasuries we track tightening eight basis points to 293 basis points.

Commodities

• Crude oil fell further on Monday as traders digested another bumper production increase from a group of OPEC+ producers. With the 2023 voluntary cut of 2.2 mb/d now fully reversed, traders ponder what the wider group might do with a 1.66 mb/d cut that was also implemented that year. Focus on renewed geopolitical pressures that may curb supply from Russia and help offset tariff-related economic growth concerns. In Brent, key resistance has now been established around USD 70.
• Stabilising copper prices, supported by new supply issues following a mining accident in Chile, helped underpin prices for both silver and platinum, allowing both to recoup some lost ground against gold, which is holding onto last week’s gains after the dismal US jobs report saw bond yields and the US dollar drop, while raising the prospect of a September rate cut.

Currencies

• The Japanese yen remained firm, with EURJPY testing 170.00, near the lows of last week, and USDJPY hitting new local lows of 146.62 overnight before rebounding as the US dollar firmed broadly overnight, consolidating some of the steep losses from Friday. EURUSD traded to 1.1550 after a high of 1.1588.
• Ahead of the Bank of England meeting this Thursday, expected to bring a 25 basis rate cut, sterling weakened on the bout of weak risk sentiment late last week, but has stabilized near 0.8700 in EURGBP.

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