2025 W45 Global DM Recap
With U.S. job cuts reaching a 20-year high and Consumer Sentiment plunging to its lowest level since June 2022, is the prolonged U.S. government shutdown the primary catalyst driving investor confidence and global risk appetite lower in Week 45?
Markets Narratives
Macro Overview
In Week 45, global macroeconomic sentiment was largely influenced by concerns over elevated valuations in the tech sector and the prolonged U.S. federal government shutdown. These factors contributed to a risk-off environment, impacting equity markets. Investors closely monitored private-sector data releases due to limited government data, while also assessing the potential impact of geopolitical developments and central bank stances on inflation and growth.
Policy Insights
Monetary policy remained a key focus, with the Bank of England holding rates steady but signaling openness to future cuts, aligning with market expectations. The Swedish and Norwegian central banks also maintained their rates, citing persistent inflation concerns. In Japan, the central bank is expected to continue tightening, driven by wage outlooks, despite the new Prime Minister's fiscal spending plans. The U.S. government shutdown's impact on economic data and potential fiscal measures remained a significant policy discussion point, influencing market sentiment and investor confidence.
