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- Global Markets Mixed : Bond Yields Point To Soft Growth And A Dovish Fed
Global Markets Mixed : Bond Yields Point To Soft Growth And A Dovish Fed
DAX continues to outperform
INSIGHT WEEKLY: July 13, 2025
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🌐 Markets Overview
📈 Markets were mixed during the week
This week, markets were divergent - European indexes broadly advanced, while U.S. and Asian markets exhibited mild weakness. The DAX continued its run, rising 2.0% on the week, supported by stronger-than-expected German industrial output and a weaker euro that improved export prospects. The STOXX 50 and CAC 40 also rose, bolstered by resilient eurozone manufacturing data and expectations of further European Central Bank easing.
In contrast, key U.S. indices such as the S&P 500 (–0.3%) and Nasdaq Composite (–0.1%) posted modest declines, attributed to profit-taking in technology-heavy sectors following strong gains over the prior month. This occurred despite continued soft labor market data, which reinforced investor expectations of a Federal Reserve rate cut in the third quarter.
In Asia, the Nikkei 225 declined 0.6%, weighed down by ongoing concerns over yen weakness and its effect on import costs, alongside a modest deceleration in domestic demand indicators. Meanwhile, India’s Nifty 50 fell 1.2% as markets reacted to increased political uncertainty following delays in key fiscal reform proposals.
Year to date, standout performers include Germany’s DAX (+21.8%) and Bitcoin (+26.0%), reflecting robust industrial output and rising institutional adoption of cryptocurrencies, respectively.
DAX’s strength has been driven by revived global goods demand and declining input costs, supported by a reduction in energy prices.
Bitcoin’s sharp rally continues to be underpinned by exchange-traded fund inflows, following SEC approvals in the first quarter of 2025, and heightened hedge fund interest in alternative assets amid ongoing concerns about fiat currency debasement.
In the U.S., the S&P 500 (+6.4%) and Nasdaq (+6.6%) have been supported by a resilient economy and strong earnings growth in the AI and cloud-computing sectors, despite the drag of tighter financial conditions earlier in the year. Nonetheless, crosscurrents remain. Declining Treasury yields indicate that the bond market is now pricing in slower economic growth, reinforcing expectations of a more dovish stance from the Federal Reserve.
Gold has surged 27.9% year to date, driven by heightened geopolitical tensions, particularly in the South China Sea and the Middle East, and increased central bank gold purchases.
Oil (WTI) remains down 4.6% for the year, despite a 2.2% rebound this week, amid rising U.S. production and weaker-than-expected demand from China.
Tech stocks
This week, technology stocks delivered mixed performance.
Nvidia led with a 3.5% gain, extending its AI-driven rally powered by continuing demand for its H100 and Blackwell processors.
AMD surged 6.2%, on sustained interest in its MI300 AI accelerators.
Intel rose 4.2%, reflecting optimism surrounding foundry expansion plans and potential CHIPS Act benefits.
Applied Materials rose 3.6% as capex at major Taiwan and South Korea fabs held firm.
ARM fell 5.9%, despite solid YTD gains, as investors took profits amid broader caution in high-valuation chip names.
Year-to-date performance reveals stark contrasts within the tech sector.
Micron leads with a 48% gain, driven by surging demand for high-bandwidth memory critical for AI model training.
Among the Magnificent Seven, Meta (+22.5%) and Nvidia (+22.8%) have capitalized on AI monetization, while Tesla (-22.4%) and Apple (-15.7%) face structural headwinds from intensifying competition and slowing innovation cycles.
Macro Watch: This Week’s Economic Developments
🌍 Global Outlook
Markets held relatively steady this week, despite persistent headwinds from tariffs, rising U.S. fiscal pressures, and slowing global growth. Investor risk appetite remained resilient across major regions, with muted equity and bond reactions to escalating trade tensions. A Reuters poll of FX analysts flagged growing expectations for continued U.S. dollar weakness, citing rising debt levels, tariff pressures, and a likely Fed rate cut trajectory. In Europe, stubborn core inflation and mixed industrial data point to uneven momentum, while in emerging markets, currency and equity flows remained stable but cautious in tone.
🇺🇸 United States
Markets remained relatively calm in the face of tariff threats, and investors largely brushed off the latest rhetoric as they shifted focus to upcoming corporate earnings.
Treasury auctions earlier in the week saw healthy demand, though yields edged higher midweek as markets reassessed the Fed’s path and fiscal concerns lingered.
The announcement of U.S. debt reaching $37 trillion made headlines last week, continued to generate concern. The expectation is that the latest tax-and-spending package could add over $3 trillion to the deficit in the coming decade.
Federal Reserve minutes revealed internal tensions: while most officials support rate cuts later in 2025, a few expressed caution, warning against premature easing given persistent inflation risks.
🌐 Europe
UK May GDP declined by –0.1%, the second consecutive monthly drop, largely due to underperformance in manufacturing, construction, and production. Retail sales were also weak. What will Q2 look like? Probably around +0.1% to 0.2%.
Interest rates are expected to be cut in light of poor growth.
Producer Price Index (PPI) in the UK was revised upward, with input inflation recalibrated to +0.6% in January, signaling persistent cost pressures at the manufacturers.
🌏 Asia
China’s Q2 GDP growth slowed to 5.1% year-on-year, down from 5.4% in Q1, reinforcing the view that the recovery is losing steam. Despite multiple rounds of policy support, both domestic consumption and exports remain weak. Retail sales and industrial production underperformed expectations, putting further pressure on Beijing to deliver more targeted stimulus in H2.
In Japan, the yen slipped to around ¥147 as markets reacted to renewed U.S. tariff rhetoric and Japan’s cautious monetary stance. The Bank of Japan faces a dilemma: rising import costs from a weaker yen contrast with still-fragile domestic demand. 10-year Japanese government bond (JGB) yields edged higher, reflecting modest expectations of future tightening, though policy remains highly accommodative.
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🌐 Artificial Intelligence and Tech
This cover has been designed using assets from Freepik.com
Grok, Elon Musk’s chatbot from xAI, made headlines for the wrong reasons, after users exposed a series of disturbing outputs, including antisemitic and racist responses. The incidents, widely circulated on social media, highlighted critical lapses in the model’s content safeguards. The Grok team issued a public apology and acknowledged the need for tighter controls. Still, Musk confirmed that Grok 4 will be installed in Tesla vehicles next week, a move that could bring conversational AI to millions on the road.
OpenAI also faced turbulence. The company delayed its long-promised open-source model again, raising questions about transparency and timing. Just as notably, OpenAI’s planned acquisition of Windsurf collapsed when the startup’s CEO jumped ship to Google.
Apple lost a key AI exec to Meta this week. It’s part of a growing trend. Meta is aggressively building out its LLM talent while Apple struggles to deliver momentum beyond Vision Pro.
Goldman Sachs is testing an experimental AI agent ‘Devin’ as a kind of virtual employee. This viral agent, known for writing and shipping code independently, is now part of a real-world pilot. If it works, Devin could hint at what automation looks like inside finance.
Google is open-sourcing MedGemma, its latest vision-language model for medical imaging. Transparency and open science are the drivers here, especially in fields where explainability is critical.
Infrastructure got a boost as IBM launched Power11 chips for enterprise AI, and Dell rolled out new Nvidia Blackwell-powered servers.
Get your free guide to AI
🌐 Crypto Corner
Top 10 cryptos:
There was broad-based strength across the cryptocurrency market.
Cardano (ADA) gained 23.9%, though it remains down 15.9% year-to-date. Recent support has come from increased regulatory clarity in the U.S. regarding proof-of-stake (PoS) protocols. However, delays in network upgrades earlier in the year and a decline in developer activity during Q1 negatively impacted its earlier momentum.
XRP surged approximately 23.4% over the past week. The rally reflects renewed institutional interest, including XRP’s inclusion in Grayscale’s Digital Large Cap Fund, which has boosted market credibility. On-chain activity also picked up, with notable whale accumulation and increased transaction volumes indicating stronger user engagement. The asset has benefited from a broader market rotation into utility-focused blockchains and improving sentiment across the XRP trading ecosystem.
Ethereum (ETH) gained about 17.9% this week, though it remains approximately 11.1% down YTD. Persistent concerns around roll-up centralization, delays in scaling roadmap implementation, and lower developer engagement earlier in the year have dampened sentiment. Still, fresh momentum in DeFi protocol launches and increased NFT-related activity helped ETH chip back up from its Q2 troughs.
Polkadot (DOT) is up 16.3% this week, but −41.0% YTD. Its complex parachain auction mechanism and market rotation away from alternative Layer-1 chains have hampered momentum. However, renewed interest in interoperability and parachain innovation could signal a turning point if ecosystem engagement picks up.
Solana (SOL): SOL climbed 10.3% on the week, still down 13.7% YTD. Earlier network outages shook investor confidence, but recent positive signals like Shopify’s U.S. pilot for SOL-powered payments have bolstered sentiment.
Bitcoin (BTC): Bitcoin rallied 8.8% over the week and remains up approximately 26.0% YTD. It continues to act as a macro hedge amid global economic uncertainties. The Fed’s more dovish tone after the July FOMC meeting, combined with a weakened U.S. dollar index, has reignited institutional demand. Bitcoin ETFs have drawn over $20 billion in net inflows this year so far.
Binance Coin (BNB): BNB rallied 5.6% weekly, yet is still 1.6% down YTD. Early-year regulatory concerns, especially in the U.S. and EU, kept pressure on prices. However, rising on-chain activity on BNB Chain during H2 2025 has helped stabilize investor sentiment (Reuters, June 2025).
Stablecoins (USDT, USDC, BUSD) maintained tight pegs throughout the period. Minor YTD fluctuations reflect ongoing shifts in issuance, usage in yield-bearing products, and expansion within institutional payment systems. Notably, Tether (USDT) saw increased issuance tied to remittance demand and growing cross-border settlement use.
See the previous spotlight on Bitcoin halving
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Stay tuned for more insights and updates each week.