2025 W33 Global DM Recap

As global markets rally on rate cut hopes, are conflicting inflation and growth signals painting a more complex picture for the economic outlook?

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by Jason & Jarvis
2025 W33 Global DM Recap
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Markets Narratives

Macro Overview

  • U.S. inflation data showed mixed signals in July: CPI cooled to 0.2% MoM (from 0.3%), but core CPI accelerated to 0.3% MoM (from 0.2%), pushing YoY to 3.1%. PPI reaccelerated to 0.9% MoM (vs. est. 0.2%).
  • U.S. retail sales rose 0.5% MoM in July (June revised to 0.9%). Consumer sentiment unexpectedly dropped to 58.6 in August (from 61.7), driven by rising inflation worries, with year-ahead inflation expectations at 4.9%.
  • UK GDP expanded 0.4% sequentially in June (May contracted 0.1%). Q2 GDP growth was 0.3%. Labor market cooled at a slower pace: payrolled employees fell by 8,000 in July (June revised to 26,000), unemployment rate remained at 4.7%, and average weekly earnings slowed to 4.6%.
  • Eurozone industrial production shrank 1.3% MoM in June (vs. est. 0.9% drop). German ZEW Economic Sentiment Index fell to 34.7 in August (from 52.7).
  • Japan’s Q2 GDP grew 1.0% QoQ annualized (vs. est. 0.4%). Yen strengthened to JPY 146.9 against USD.
  • China’s CPI was flat YoY in July. PPI declined 3.6% YoY, matching June’s lowest level since July 2023. Retail sales rose 3.7% YoY (down from 4.8%), industrial output 5.7% YoY (down from 6.8%), and fixed asset investment 1.6% (vs. 2.7%).

Policy Developments

  • U.S. and China agreed to extend the deadline for higher tariffs for another 90 days.
  • Speculation for a September Fed rate cut fluctuated based on inflation data.
  • Norges Bank (Norway’s central bank) kept its key interest rate at 4.25%, signaling potential further easing this year.
  • Bank of Japan (BoJ) rate hike speculation increased following comments from U.S. Treasury Secretary Scott Bessent.
Jason & Jarvis profile image
by Jason & Jarvis

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