Weekly Trends
The week of August 13-19, 2025 was marked by feverish anticipation of upcoming monetary decisions. Global financial markets evolved in a climate of growing uncertainty as investors prepared for the Jackson Hole symposium¹ and Federal Reserve Chairman Jerome Powell’s speech scheduled for August 22. The US dollar DXY index stabilized around 98.00 points, reflecting this wait-and-see phase, while higher-than-expected inflation data calls into question expectations for a September rate cut. Plus500
News
1. Central banks maintain vigilance against persistent inflation
The Bank of England cut its policy rate² by another 0.25 percentage point to 4%, reaching its lowest level since early 2023. However, the decision proved contentious with a tight 5-4 vote, and markets now anticipate a delay until early 2026 for the next cut due to inflation concerns. Bank of England
2. Chinese economy shows concerning signs of slowdown
Chinese industrial output grew only 5.7% in July 2025 compared to July 2024, marking its weakest growth level since November 2024. Retail sales also decelerated to 3.7%, below forecasts of 4.6%. These data reinforce pressure on policymakers to deploy additional stimulus measures in the world’s second-largest economy. Reuters
3. S&P 500 quarterly results exceed expectations despite volatility
As of August 20, 2025, 90% of S&P 500 companies have reported their second-quarter results, with 81% beating earnings per share estimates. The earnings growth rate stands at 11.8%, primarily supported by Communication Services (+45.8%) and Information Technology (+21.3%) sectors. This solid performance contrasts with market nervousness about macroeconomic prospects. FactSet
4. Gold maintains resilience amid geopolitical uncertainties
Gold ounce³ traded between $3,275 and $3,440 during the week, posting a remarkable performance of +28.3% since the beginning of 2025. Despite an environment of low asset volatility and a stable dollar, gold benefits from expectations of monetary easing and persistent political uncertainties, particularly around Ukraine-Russia negotiations. OANDA
5. European banking sector remains robust despite increased cost of risk
EU and EEA banks posted a cost of risk⁴ of 57 basis points in the first quarter of 2025, the highest level since 2021. Nevertheless, the sector maintains a return on equity of 10.5% and solid liquidity ratios with an LCR⁵ of 159.5%. Non-performing loans⁶ total €377.8 billion, remaining stable compared to the previous quarter. European Banking Authority
6. Cryptocurrencies under pressure ahead of monetary policy signals
Bitcoin fell 3.2% to below $114,000 while Ethereum dropped 5.3% under $4,200. This 3.2% correction in the global crypto market reflects the particular exposure of these assets to changes in interest rate expectations, given their dependence on cheap liquidity. Bitcoin miners and digital asset-related companies suffered even larger losses. CoinDesk
7. M&A market maintains momentum with $2.6 trillion
Global M&A activity reaches a peak of $2.6 trillion year-to-date, marking the busiest period since 2021. Deal values increased 28% despite a 16% decrease in the number of transactions, showing a trend toward mega-deals⁷. The United States represents over 50% of global activity, while Asia-Pacific has doubled its volumes, surpassing EMEA. World Economic Forum
8. Oil prices remain volatile pending Russian-Ukrainian peace agreement
WTI crude oil futures crossed the $62 per barrel mark, gaining 1.36% despite a loss of more than 1% the previous day. Investors are evaluating prospects of a potential peace deal between Russia and Ukraine that could lift sanctions on Russia and increase supply. US inventories declined by 2.4 million barrels last week, exceeding expectations and indicating stronger demand. Trading Economics
Strategic Outlook
The coming week promises to be decisive for global financial markets direction. The Jackson Hole symposium, a major event in the monetary calendar, could clarify the Federal Reserve’s intentions regarding the pace of rate cuts. « There’s a lot of uncertainty in the petroleum market, and we have seen significant drops in oil price when inventories grow as quickly as we are expecting in the coming months, » according to EIA’s Steve Nalley. This quote perfectly illustrates the general market mindset: omnipresent uncertainty that requires heightened investor vigilance. Higher-than-expected inflation data, notably the producer price index which jumped 0.9% in July, complicates the Fed’s task and could delay expected monetary easing. U.S. Energy Information Administration
Good News
The technology sector continues to demonstrate exceptional resilience with 21.3% earnings growth in the second quarter of 2025. This solid performance, combined with emerging opportunities in artificial intelligence and blockchain, offers attractive investment prospects for long-term investors. AMD’s acquisition of ZT Systems for $4.9 billion and Nano Dimension’s acquisition of Desktop Metal testify to ongoing consolidation in emerging technologies, creating new industrial champions. Dealroom
Acknowledgements
Thank you for your reading and excellent week.
Brief’s Glossary
- Jackson Hole Symposium¹ : Annual economic conference organized by the Federal Reserve Bank of Kansas City, bringing together leading global central bankers to discuss monetary and economic issues.
- Policy Rate² : Reference interest rate set by a central bank to guide monetary policy and influence credit conditions in the economy.
- Gold Ounce³ : Traditional unit of measurement for precious metals, equivalent to approximately 31.1 grams, used to quote gold prices on international markets.
- Cost of Risk⁴ : Ratio expressed in basis points measuring credit loss provisions relative to loan outstanding amounts, a key indicator of banking portfolio quality.
- LCR⁵ : Liquidity Coverage Ratio, liquidity coverage ratio imposed by banking regulation to ensure banks hold sufficient liquid assets to face cash outflows over 30 days.
- Non-performing loans⁶ : Bank loans presenting significant risk of non-repayment, generally classified as default or payment delayed for more than 90 days.
- Mega-deals⁷ : Merger and acquisition operations valued at over $1 billion, characterized by their significant impact on market structure and economies of scale.
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