A balancing act

Macroeconomic update for July 2025

Equity markets continue to hit new highs, shrugging off geopolitical tensions and trade negotiations. The Eurozone and emerging markets (EM) are leading the rally, fueled by domestic stimulus efforts. In the US, moderating inflation and the potential for further tax cuts are keeping consumer sentiment buoyant. But what’s going on with the weakening US dollar? And what does this all mean for the Multi Asset Boutique’s asset allocation? Find out in the latest CIO Monthly video, where you’ll hear about their views on the latest developments.  

Key Takeaways

1. US consumers
Moderating inflation and the prospect of further tax cuts as part of US President Donald Trump’s “One big beautiful bill” has helped keep consumer demand strong.

2. Quo vadis, US dollar?
Even as markets grind higher, the US dollar continues its decline, partly amid political pressure on the US Federal Reserve and speculation around future leadership.

3. Equity valuations
High stock valuations suggest that a short-term correction is possible, in our view. We remain ready to deploy our cash holdings once markets consolidate.  

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