The UK inflation rate rose to 3.8% in July 2025, marking its highest level since January 2024. This was up from 3.6% in June and slightly above market forecasts of 3.7%, according to the Office for National Statistics (ONS).
The main driver of the increase came from the transport sector, where prices climbed 3.2% compared to 1.7% in June. Airfares surged by a sharp 30.2%, largely influenced by the timing of the school summer holidays. Higher motor fuel costs, sea fares, and roadside recovery services also pushed transport inflation higher.
Other notable contributors included restaurants and hotels, where prices rose 3.4% versus 2.6% in June, largely due to more expensive overnight hotel stays. Food and non-alcoholic beverages also accelerated, rising 4.9% compared to 4.5% the previous month.
On the other hand, housing and household services eased slightly, providing some relief. Inflation in this category dropped to 6.2% from 6.7%, reflecting softer growth in owner-occupiers’ housing costs and rents.
On a monthly basis, the Consumer Price Index (CPI) increased 0.1% in July, defying expectations of a 0.1% decline. However, this was slower than June’s 0.3% rise. Core inflation, which excludes energy, food, alcohol, and tobacco, also edged up to 3.8% from 3.7%. source: Office for National Statistics
US stocks saw limited movements on Monday, with major indexes holding near their record highs from last week. The S&P 500, Nasdaq 100, and Dow Jones Industrial Average all traded flat as investors awaited fresh catalysts, particularly from:
The Federal Reserve’s FOMC meeting minutes
The Jackson Hole Symposium later this week
Both are expected to offer hints on the Fed’s interest rate outlook.
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Equities remain supported by growing bets on multiple rate cuts this year, as markets respond to signs of a softening labor market and disinflation pressures.
Key Market Highlights:
Chipmakers and AI-exposed stocks climbed, with Nvidia (+0.5%) staying near record highs despite recent US export controls.
Retail stocks were mixed ahead of upcoming quarterly earnings reports.
Geopolitical backdrop: EU leaders prepared to meet Ukraine’s President Zelensky following US President Trump’s summit with Russian President Putin.
NAHB Housing Market Index – August 2025
The NAHB/Wells Fargo Housing Market Index (HMI) slipped to 32 in August 2025, down from 33 in July and below expectations of 34, signaling persistent challenges in the housing sector.
Breakdown of Housing Data:
Current sales conditions: fell one point to 35
Sales expectations (next 6 months): steady at 43
Buyer traffic: rose two points to 22, still at historically low levels
Builder Incentives & Pricing Trends:
37% of builders cut prices in August (down from 38% in July)
Average price reduction remained at 5% for the tenth straight month
66% of builders used sales incentives, the highest post-Covid level, up from 62% in July
This data reflects ongoing affordability concerns, limited buyer demand, and sustained reliance on incentives to stimulate sales. source: National Association of Home Builders
Stock Market: Investors remain cautious but optimistic, balancing AI-driven growth and monetary policy expectations.
Housing Market: Persistent weakness in builder confidence highlights the impact of affordability challenges, even as incentives expand.
📊 Both markets remain heavily influenced by Federal Reserve policy signals, making this week’s Jackson Hole Symposium a pivotal event for investors and analysts.
Frequently Asked Questions (FAQ)
1. What is the current United States Stock Market Index level in August 2025?
In August 2025, the S&P 500, Nasdaq 100, and Dow Jones remain near record highs after a strong rally earlier in the month. Markets are currently trading flat as investors await signals from the Federal Reserve’s policy outlook.
2. Why are US stocks trading flat despite strong AI and chipmaker performance?
While AI-related stocks like Nvidia continue to perform strongly, overall market movement is subdued due to uncertainty over the Federal Reserve’s interest rate decisions. Investors are waiting for clarity from the Jackson Hole Symposium and FOMC meeting minutes.
3. What does the NAHB Housing Market Index measure?
The NAHB/Wells Fargo Housing Market Index (HMI) measures builder confidence in the housing market, covering current sales, buyer traffic, and future sales expectations. A reading above 50 indicates optimism, while below 50 reflects weakness.
4. Why did the NAHB Housing Market Index fall in August 2025?
The index fell to 32 in August 2025 due to weak buyer demand, affordability challenges, and higher reliance on sales incentives and price cuts by builders.
5. Are US home builders offering more incentives in 2025?
Yes. In August 2025, 66% of builders reported using sales incentives, the highest since the post-Covid period. Price cuts remain common, with an average reduction of 5% per home.
Technical Analysis: S&P 500 – August 2025
The S&P 500 continues to hover near record highs after its sharp rally this summer. Momentum remains strong, but the index is showing signs of consolidation as traders await policy signals from the Federal Reserve.
Key Technical Levels
Resistance Zone: 5,650 – 5,700 → The index is struggling to break above this level, marking a potential short-term ceiling.
Support Levels:
5,500 (near-term support) – A break below could invite short-term selling.
5,350 (major support) – A key level to watch, aligning with the 50-day moving average (50-DMA).
Moving Averages
50-Day Moving Average (50-DMA): ~5,350 – Currently acting as strong dynamic support.
200-Day Moving Average (200-DMA): ~4,950 – Well below current levels, confirming a longer-term bullish trend.
Momentum Indicators
RSI (Relative Strength Index): Hovering around 64, just below the overbought threshold (70). This suggests the index is consolidating but not yet in danger of a deep correction.
MACD (Moving Average Convergence Divergence): Still in positive territory, though momentum is flattening, pointing to a possible range-bound movement in the short term.
Chart Outlook
The S&P 500 remains bullish in the medium to long term, supported by AI-driven growth and easing inflation expectations. However, short-term consolidation is likely until traders get more clarity from Fed policy announcements.
Trading Strategy (Not Financial Advice):
Bullish bias above 5,500 support
Watch for a breakout above 5,700 for continuation toward new record highs
Caution: A sustained break below 5,350 could trigger deeper pullbacks
The US Producer Price Index (PPI) for July 2025 surged 0.9% month-over-month, marking the sharpest increase since June 2022. This rebound from June’s flat reading easily beat market forecasts of a 0.2% rise, highlighting stronger-than-expected inflation pressures.
Services costs led the gain, climbing 1.1% in July. The biggest driver was a 3.8% jump in margins for machinery and equipment wholesaling, with additional increases in portfolio management, securities brokerage, investment advisory services, traveler accommodations, automobile retailing, and truck freight transportation.
Goods prices also rose 0.7%, fueled by a staggering 38.9% surge in fresh and dry vegetable prices. Other contributors included higher costs for meats, diesel fuel, jet fuel, nonferrous scrap, and eggs, partially offset by a 1.8% drop in gasoline.
The core Producer Price Index—excluding food and energy—also climbed 0.9%, far above the expected 0.2%.
On a yearly basis, headline producer inflation accelerated to 3.3%, the highest in five months, while core PPI jumped to 3.7% from 2.6% in June. Both figures came in well above analyst expectations, potentially complicating the Federal Reserve’s path toward interest rate cuts later this year. Source: U.S. Bureau of Labor Statistics
Economic Calendar Displaying todays PPI data and Jobs data.
📉 US Jobless Claims Fall More Than Expected
U.S. initial jobless claims slipped to 224,000 in early July 2025, down 3,000 from the prior week and below forecasts of 228,000. Continued claims eased by 15,000 to 1.953 million, retreating from a three-year high.
The labor market remains solid despite signs of slowing, with hiring cooling and payroll figures recently revised lower. Federal government employee claims—closely watched after DOGE layoffs—fell by 71 to 637. source: U.S. Department of Labor
All this points to a stronger USD. But we think it will retrace pretty quickly. Get ready for some “whipsaw” action later in todays trading session and coming days.
Australian Dollar Leads Gains, Asian Currencies Slip
The foreign exchange market saw notable movement today, with the Australian Dollar (AUD) emerging as the top gainer, while several Asian currencies faced pressure. Here’s a breakdown of the latest action:
🔼 Top Currency Gainers
🇦🇺 Australian Dollar (AUD) – +0.30%
The AUD surged on the back of robust trade data and stronger commodity prices, outpacing its peers in today’s session.
💵 Dollar Index (DXY) – +0.02%
The U.S. Dollar index posted a modest gain as traders remain cautious ahead of upcoming U.S. labor market reports later this week.
🔽 Top Currency Losers
🇰🇷 South Korean Won (KRW) – -0.26%
The KRW dropped the most among major currencies due to export concerns and regional geopolitical uncertainty.
🇯🇵 Japanese Yen (JPY) – -0.18%
The JPY weakened as the Bank of Japan stays committed to its ultra-loose monetary stance.
🇬🇧 British Pound (GBP) – -0.10%
The GBP slipped after soft inflation data led traders to price in a more dovish outlook from the Bank of England.
🇪🇺 Euro (EUR) – -0.03%
The Euro edged slightly lower amid mixed eurozone data and cautious signals from the European Central Bank (ECB).
📊 FX Performance Summary
Currency
Change (%)
Movement
🇦🇺 AUD
+0.30%
Strong Gain
💵 DXY
+0.02%
Mild Upside
🇪🇺 EUR
-0.03%
Slight Decline
🇬🇧 GBP
-0.10%
Weakening
🇯🇵 JPY
-0.18%
Under Pressure
🇰🇷 KRW
-0.26%
Sharp Decline
💬 Market Outlook
With commodity markets holding firm and economic data rolling in, traders will continue watching central bank policy cues and geopolitical developments. The AUD’s strength may persist if risk sentiment remains positive, while Asian currencies may stay under pressure without regional economic improvement.
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Excerpt: The CBI’s retail sales index rose slightly in July 2025 but stayed weaker than expected, showing UK retailers are still battling tough economic conditions. Meanwhile, Hong Kong’s import growth slowed in June as demand shifted across sectors and trading partners.
📉 UK Retail Sales: Modest Improvement in July
The Confederation of British Industry’s (CBI) latest monthly retail sales gauge brought a hint of relief for UK retailers. The index climbed to -34 in July, improving from June’s 17-month low of -46. However, this figure still missed analysts’ expectations of -26, underlining how high prices and ongoing economic uncertainty continue to drag on consumer spending.
Retail sales volumes have now fallen for ten consecutive months, reflecting the squeeze on household budgets. Looking ahead, retailers are slightly more optimistic about August, with the measure of expected sales rising to -31, compared to -49 a month earlier.
🌏 Hong Kong Imports: Growth Cools in June
Hong Kong’s imports climbed 11.1% year-on-year to $476.7 billion in June 2025, according to the Census and Statistics Department. While this marks another month of growth, it was the slowest rate in five months, down from May’s sharp 18.9% rise.
Imports surged from Vietnam (+50.6%), the United Kingdom (+44.7%), mainland China (+17.3%), Thailand (+15.9%) and the United States (+3.9%). However, imports from South Korea saw a sharp decline (-27.1%).
By product category, there were broad gains in key sectors:
Electrical machinery, apparatus and parts rose 14.6% (vs 23.7% in May)
Telecommunications equipment increased 17.7%
Office machines and data processing equipment rose 9.8%
Miscellaneous manufactured articles grew 12.6%
Power-generating machinery jumped 38.7%
In contrast, declines were recorded for non-metallic mineral manufactures (-15.6%), professional and scientific instruments (-9.4%) and petroleum-related products (-10.5%).
Mortgage Applications See Strongest Weekly Rise in a Month
In the first week of July 2025, the volume of U.S. mortgage applications soared by 9.4% from the previous week — the largest increase in a month, according to data from the Mortgage Bankers Association. This marks the third consecutive weekly gain, the longest streak since December 2024, as benchmark mortgage rates dipped to their lowest since April.
Refinancing activity, which tends to respond quickly to changes in short-term rates, jumped 9% week-over-week and surged 56% compared to the same period in 2024. Similarly, purchase applications rose 9% on the week and were up 25% year-over-year, highlighting renewed strength in the housing market. source: Mortgage Bankers Association of America
Markets Edge Higher on Trade Announcements and Fed Speculation
U.S. equities closed higher on Wednesday as traders digested updates on trade policy and awaited the Federal Reserve’s next moves. The S&P 500 gained 0.5%, the Nasdaq climbed 0.7%, and the Dow Jones rose by nearly 200 points.
President Trump signaled that major trade announcements would be made, including a planned 50% tariff on copper imports and potential 200% tariffs on pharmaceuticals, though implementation is delayed by 12–18 months to give industries time to adapt.
Market participants are closely watching for the FOMC minutes release, which may offer insights into the timing of potential interest rate cuts. Expectations remain strong for two 25 basis point cuts before year-end.
Technology stocks led gains, with Nvidia up 2.2% and Microsoft rising 1.2%. Apple shares were flat, following a statement by White House Trade Counselor Peter Navarro suggesting the company considers itself “too big to tariff.”
Mexico’s Inflation Slows but Core Pressures Rise
Mexico’s annual inflation rate eased to 4.32% in June 2025, down slightly from 4.42% in May, aligning closely with market expectations of 4.31%, according to the national statistics agency INEGI.
Price growth moderated in agriculture (5.04% vs 6.76%) and energy (3.56% vs 3.93%), while accelerating for goods, food, beverages, and services. Notably, core inflation ticked up to 4.24%, suggesting that underlying price pressures remain sticky.
With falling mortgage rates energizing the U.S. housing market, equity markets buoyed by trade policy hints, and inflation trends in Mexico showing mixed signals, July 2025 is shaping up to be a pivotal month for both investors and policymakers.
Stay tuned for more updates on monetary policy, inflation data, and global economic trends.
Trade Tensions Return: The July 9th deadline marks the end of the US tariff pause. Only partial deals (UK, Vietnam, China framework) are in place. Markets are bracing for possible escalations and their impact on global trade flows.
Fed Watch: Investors await the FOMC minutes and several Fed speeches to gauge the outlook for interest rates. Chair Powell maintains a cautious tone, but markets want more clues on the path for policy in H2.
Central Bank Decisions: Policy meetings in Australia, South Korea, Malaysia, and New Zealand could signal regional divergence amid slowing global growth and easing inflation.
🇺🇸 United States
Tariff Deadline: High stakes around the July 9th expiration of tariff relief. Key sectors may face higher import costs unless further agreements are reached.
Fed & Data:
FOMC minutes and Fed speeches in focus.
Data includes: Weekly jobless claims, consumer credit, NFIB Small Business Index, and budget statement.
Earnings Season Kickoff:
Watch Delta Air Lines and Conagra Brands earnings on Thursday for early corporate sentiment.
🇨🇦 Canada
June Jobs Report and Ivey PMI will shape expectations around Bank of Canada’s next move.
🇲🇽 Mexico & 🇧🇷 Brazil
Mexico: June inflation report will guide Banxico’s next rate decision.
Brazil: Updates on inflation, retail sales, and business confidence are due.
🇪🇺 Europe
Germany: Expected second monthly industrial production decline, plus trade, wholesale prices, and final inflation data.
Eurozone: First dip in retail sales in 5 months.
UK: Key data on monthly GDP, industrial output, trade balance, and Halifax house prices.
Italy & France: Final inflation and industrial figures.
Others: Switzerland (consumer confidence), Turkey (IP), Russia (inflation).
🌏 Asia-Pacific
China:
CPI likely flat; PPI deflation to ease (still -3.2% y/y).
Japan:
Full slate of data: wages, current account, machine orders, producer prices.
📊 Germany Stock Market Index (DE40) Falls Amid Economic Uncertainty
The Germany Stock Market Index (DE40)—which tracks the performance of 40 top German blue-chip stocks—closed down 0.5% at 23,910 on Monday, breaking a two-day winning streak. The decline comes amid mixed domestic economic data and renewed trade concerns.
🇩🇪 Key Economic Indicators in Germany
✅ Inflation Cools in June
German inflation surprised markets by dropping to 2.0% year-on-year in June, down from 2.1% in May and below the 2.2% forecast. This signals easing price pressure, potentially giving the European Central Bank (ECB) more flexibility on interest rates.
❌ Retail Sales Point to Weak Consumer Demand
Germany’s retail sales fell 1.6% in May, following a 0.6% drop in April. This back-to-back decline underlines sluggish domestic consumption, a key factor limiting broader economic recovery in Europe’s largest economy.
🌐 Trade Tensions Add Market Pressure
Global trade uncertainty continues to weigh on the German stock market. U.S. President Trump confirmed that trade negotiations are ongoing but won’t extend the current 90-day tariff pause beyond July 9. This raises risks for Germany’s export-heavy economy, especially sectors like automotive and chemicals.
🔻 Biggest DAX Losers: Symrise and Bayer
Symrise AG led the market declines with a sharp 7% drop, likely due to sector sentiment or earnings-related concerns.
Bayer AG tumbled 5.4% after the U.S. Supreme Court requested the government’s opinion on Monsanto weedkiller litigation, reigniting legal uncertainty for the pharma and agrochemical giant.
📆 DE40 Monthly Performance
Despite occasional gains, the DAX (DE40) ended June with a modest 0.4% loss, reflecting ongoing macroeconomic headwinds and market caution.
📌 What to Watch Next
July 9 Trade Deadline: Markets will closely monitor whether new tariffs are imposed.
Upcoming ECB Decisions: Slower inflation may influence monetary policy.
Euro Area Economic Sentiment Indicator Falls to 94 in June 2025
The Economic Sentiment Indicator (ESI) for the Euro Area dropped to 94 in June 2025, down from 94.8 in May and well below market expectations of 95.1, according to the latest data from the European Commission.
📉 Key Drivers of the Decline
The drop in sentiment was largely driven by the industrial sector, where confidence slipped to -12 from -10.4 in the previous month. The decline reflects:
Lower order book assessments
Higher stocks of finished products
Weaker production expectations
Additional declines were observed in:
Retail confidence: -7.5 (vs -7.2 in May)
Consumer confidence: -15.3 (vs -15.1)
📈 Sectors Showing Improvement
Despite the overall downturn, two sectors posted gains:
Services: Confidence improved to 2.9 (from 1.8)
Construction: Rebounded slightly to -2.8 (from -3.5)
🌍 Country-Level Highlights
Biggest Declines:
France: 89.6 (down from 93)
Spain: 102 (down from 103.4)
Germany: 90.7 (down from 91.5)
Stable or Improving:
Poland: 101.4 (up from 100.4)
Italy: 98.9 (vs 98.7)
Netherlands: 97.1 (vs 96.9)
🔎 What It Means for the Eurozone
The data suggest ongoing economic weakness across the Eurozone, particularly in manufacturing and retail sectors. While services and construction offer some support, the overall picture points to fragile business and consumer confidence as the region navigates 2025.
This divergence between countries—particularly the downturn in France and Germany—highlights uneven recovery dynamics within the EU bloc. source: European Commission
Stay tuned for more updates on EU economic indicators and what they mean for markets and policy.
WTI crude oil, gold prices, and the US dollar index all moved significantly on Thursday as geopolitical developments, Fed policy signals, and economic data shaped market sentiment.
Crude Oil Prices Rise Ahead of US–Iran Talks and OPEC+ Meeting
WTI crude oil futures climbed above $65 per barrel on Thursday, building on recent gains and recovering from earlier losses in the week. The rally comes as investors await high-stakes talks between the US and Iran scheduled for next week. These discussions aim to reduce tensions in the Middle East and limit Tehran’s nuclear ambitions.
The move follows President Trump’s reaffirmation of the maximum pressure campaign, including restrictions on Iranian oil exports. However, he also hinted at possible enforcement leniency to support Iran’s reconstruction, suggesting China may continue importing Iranian crude.
In a sign of strong demand, US crude inventories dropped by 5.8 million barrels, reaching an 11-year seasonal low. Cushing stockpiles also fell to the lowest since February.
Markets are now turning their focus to the upcoming OPEC+ meeting on July 6, where the group will set its production policy for August. Russia may support a supply increase if conditions warrant it.
Gold Prices Edge Higher on Weaker Dollar, Geopolitical Relief
Gold prices rose toward $3,340 per ounce, extending gains from the previous session. The weaker US dollar and falling Treasury yields provided support, while easing geopolitical tensions added a further boost.
Next week’s US–Iran talks have sparked cautious optimism in markets. While the ceasefire between Iran and Israel is holding, concerns about its durability remain.
Meanwhile, Fed Chair Jerome Powell, in his second day of testimony, maintained a balanced stance—acknowledging inflation risks from tariffs but holding off on immediate rate cuts. Nonetheless, weak consumer confidence in June raised fresh concerns about the labor market and trade uncertainty, potentially strengthening the case for future easing.
Markets are now closely watching key data, including Thursday’s final Q1 GDP reading and initial jobless claims, followed by PCE price data on Friday.
US Dollar Slides to Three-Year Low Amid Rate Cut Expectations
The US dollar index fell to around 97.5, marking its lowest level in over three years. The decline reflects a mix of easing geopolitical tensions, growing fiscal worries, and expectations of Federal Reserve rate cuts.
With the ceasefire between Iran and Israel seemingly stable and US–Iran negotiations on the horizon, risk sentiment improved. On the policy front, Chair Powell reiterated a cautious stance, stating that while tariffs may drive inflation, the Fed would likely continue easing absent those pressures.
Traders are now pricing in over 60 basis points of rate cuts by year-end, with the next move anticipated in September. Attention is also turning to US trade negotiations ahead of President Trump’s July 9 deadline, and efforts in Congress to finalize a tax and spending package around the same period.
Looking Ahead
Markets are poised for more volatility as geopolitical, economic, and policy developments continue to unfold. Investors should watch closely for:
US–Iran nuclear talks next week
July 6 OPEC+ meeting outcomes
Upcoming US economic data (GDP, jobless claims, PCE)
Fed policy signals amid global trade uncertainty
Stay tuned for further updates as these stories evolve.
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