Under the Surface: Fragile Growth and Silent Signals

Ahmad Mortazavi
Sep 10, 2025
4 min read

🌍 Big Picture

Markets traded with caution during the third week of July as sentiment wavered between optimism over central bank policy support and concern over mixed economic signals. U.S. equities posted moderate gains, led by tech and healthcare, while European markets underperformed on disappointing PMI figures. Asian markets, particularly China, rebounded after fresh government pledges to support the property and infrastructure sectors.

The Federal Reserve left interest rates unchanged and reiterated its data-dependent stance. Comments by Fed Chair Powell suggested that while inflation is slowing, it is not yet low enough to guarantee rate cuts, especially with services and shelter prices proving sticky. Bond markets reacted with mild yield curve steepening as investors priced in fewer near-term cuts.

Meanwhile, the European Central Bank signalled readiness to ease policy further, but weaker-than-expected PMI prints from Germany and France kept euro sentiment under pressure. In Asia, the Bank of Japan kept its ultra-loose stance unchanged and hinted at closer monitoring of wage growth before tightening, lifting Japanese equities and weakening the yen.

Geopolitical tensions in Eastern Europe and ongoing conflict concerns in the Middle East continued to support energy prices, while gold and silver maintained upward momentum amid rising safe-haven demand.

📊 Assets at a Glance

📈 Equities

U.S.: S&P 500 rose 1.43% as tech earnings optimism returned. Defensive sectors also outperformed.

Europe: DAX and CAC 40 rose slightly on soft economic data and hawkish ECB tone.

Asia: Hang Seng surged over 2% as Beijing announced new fiscal support; Nikkei hit fresh highs.

📉 Fixed Income

U.S. Treasuries: The 10-year yield held near 4.13%. Shorter maturities saw buying amid growth fears.

European Bonds: German Bund yields edged lower, pricing in ECB easing.

Credit: Investment-grade spreads narrowed slightly; high yield remained firm.

🛢️Commodities

Oil: Brent hovered around $68/barrel as supply risks persisted.

Gold: fluctuation near its support at $3,337/oz, maintained by geopolitical concerns.

Platinum: declined near 2% after a sharp rise on strong industrial demand and inflation hedging.

Agriculture: Corn and soy fell slightly; wheat rose on Russian supply risks.

💱 FX

USD: Modestly stronger against peers on cautious Fed tone.

EUR: Hovering around 1.17 vs USD, showing stronger value.

Emerging Markets: Mixed performance; MXN firmed, TRY weakened.

💻 Crypto

Bitcoin: Remained range-bound around $118000 amid mixed regulatory signals.

🏠 Real Estate

U.S. Housing: Sales slowed slightly, with a slight uptick; price growth cooled.

Europe: Property markets remained subdued amid high financing costs.

📅 Key Events Next Week

Monday, July 28

China Industrial Profits (June) Industrial profits fell 4.3% year-on-year in June, following a 9.1% drop in May. First-half profits declined ~1.8%, reflecting persistent producer deflation and weak domestic demand. Market Impact: Signals risk to Chinese industrial health, likely dampening investor sentiment toward Asia equities and EM industrial sectors.

Tuesday, July 29

U.S. Consumer Confidence & JOLTS Job Openings: Forward-looking indicators in focus for labour demand and sentiment ahead of NFP later in the week. Market Impact: Soft readings could shift Fed expectations toward rate cuts; stronger data may reinforce cautious credit tightening.

Wednesday, July 30

U.S. Advance Q2 GDP Estimate & FOMC Meeting Day Markets expect ~2.5% annualised Q2 GDP growth, with final guidance from the Fed heavily influenced by incoming data. Market Impact: Above-forecast growth may lift equities and USD; dovish tone could pressure yields and support risk assets.

Bank of Canada Meeting & Bank of Japan Meeting Fed-related policy synchronicity: BoC is likely to hold its easing bias, while BoJ may reaffirm its dovish stance despite inflation signs.

Thursday, July 31

U.S. Core PCE Price Index (June) & Chinese PMIs (July). Core PCE is the Fed’s preferred inflation metric; Chinese factory PMI is expected to remain in contraction (~49.6). Market Impact: A soft PCE could accelerate rate-cut pricing; weak PMI reinforces economic drag in China and broader EM caution.

German CPI & Australia CPI Data Further gauge inflation trends globally and ECB rate path assumptions.

Friday, August 1

U.S. Nonfarm Payrolls & ISM Manufacturing PMI Jobs growth forecast ~102K, with a weaker pace indicating a cooling Labour market. Manufacturing PMI will reflect global industrial demand. Market Impact: Weak payrolls may boost equities and gold; strong data could support yields and USD.

Eurozone Flash GDP & Inflation (July) Initial estimates expected to stay flat with GDP and CPI close to 2%, reinforcing the ECB's cautious tone.

Overarching Themes

Tariff Timing & Trade Risk: As the U.S.–China tariff truce approaches August 12, markets remain cautious around potential escalation or extensions.

Central Bank Divergence: This week includes decisions from the Fed, BoC, and BoJ, with notable contrasts: the Fed expected to hold, BoC staying patient, and BoJ possibly revising inflation outlook lower or steady.

Inflation Backdrop: Data such as core PCE, German and U.S. price metrics, and flash CPI/GDP will shape expectations across central banks.

Economic Momentum Divergence: While China’s economy slows, industrial profits decline, and factory PMI remains in contraction, the U.S. may show moderate resilience—creating asymmetrical global risk positioning.

💡 Investment Idea

Why Platinum? With its strategic use in hydrogen fuel cells, automotive catalysts, and industrial sectors, platinum benefits from both macro and industrial tailwinds. Market analysts forecast a global supply deficit in 2025 due to constrained South African production and growing industrial use.

Fundamentals:

Surging demand from the EV and clean energy sectors.

Tightening supply amid South African power cuts.

Undervalued relative to gold and palladium historically.

Technical View:

Platinum recently broke above $1,390/oz, signalling bullish continuation. As long as it stays above $1,340, technical momentum favours a test of $1,500 in the medium term.

Strategy:

Consider platinum ETFs, physical holdings, or industrial mining stocks. Ideal for investors seeking precious metal exposure beyond gold with long-term upside potential.

Risk Disclaimer

The information provided in this newsletter is for educational and informational purposes only and should not be considered financial advice. Financial markets involve substantial risk, and investments can fluctuate in value, leading to potential losses. Past performance is not indicative of future results. Before making any investment decisions, readers should consider their own risk tolerance and financial situation and consult with a licensed financial advisor if necessary. The strategies and opinions expressed are based on current market conditions and may change without notice.