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Trade tensions and mixed inflation data are prompting cautious positioning across asset classes, with safe-haven inflows, sector rallies, and deflationary pressures shaping investor decisions.
🏦 Fed minutes reveal split on timing of rate cuts
The Federal Reserve’s June 2025 meeting minutes, released today, expose a sharp divide among policymakers. Some, including Governor Waller and Vice Chair Bowman, favor an immediate cut in July to offset tariff-driven inflation, while others insist on waiting for clearer data before easing policy. With year-end inflation forecast at 3.4%—well above the 2% target—markets face uncertainty over the timing and magnitude of rate reductions.
Internal Fed discord heightens volatility in bond markets as investors recalibrate expectations for yield curves, while equities and currencies may swing based on shifting rate-cut probabilities. Long-term portfolios should brace for potential swings in discount rates and currency valuations.
🪙 Gold ETFs record biggest inflows since 2020
Physically backed gold ETFs attracted $38 billion in inflows during H1 2025—the largest semi-annual surge since early 2020—raising holdings to 3,615.9 tonnes, a peak not seen since August 2022. Geopolitical and trade-war jitters tied to new U.S. tariffs have driven investors toward safe-haven assets, lifting spot gold prices by 26% year-to-date
A historic gold rally underlines the importance of portfolio diversification amid policy uncertainty and geopolitical risk. Long-term investors may consider maintaining or modestly increasing allocations to precious metals as a hedge against market turbulence.
🏭 China’s producer price index falls 3.6% YoY
China’s PPI plunged 3.6% year-on-year in June—the steepest industrial deflation in nearly two years—as U.S. tariffs and weak domestic demand weigh on factory-gate prices. Meanwhile, the CPI inched up 0.1%, its first rise in five months, driven by modest gains in consumer-goods prices and core inflation rising to 0.7%.
Deep factory-gate deflation signals margin pressure for exporters and raises the likelihood of further stimulus or rate cuts by the People’s Bank of China. Investors with exposure to Chinese equities and commodity-linked assets should monitor policy responses and earnings forecasts.
💻 US tech sector nears 10% YTD gain
The broad U.S. technology sector has climbed 9.3% year-to-date, led by Apple’s 4.1% advance, as investors shift focus from growth-rate concerns to robust earnings projections. Over the past year, the sector is up 12% overall.
Tech’s outsized run underpins the equity rally but raises concentration risk when a handful of megacaps drive returns.
🛢️ Oil eases from two-week highs ahead of US tariff deadline
Brent slipped to $70.08/bbl and WTI to $68.25/bbl as traders awaited August 1 tariff rulings, offsetting holiday demand; a surprise U.S. inventory build and lingering trade-war jitters have capped prices near recent peaks.
Tariff-induced demand risk keeps energy markets range-bound, affecting sector returns and inflation expectations.