Financial Markets Daily Report18 July 2025
Sentiment recovered during yesterday's session following a stronger-than-expected U.S. retail sales report for June (+0.6% mom vs. 0.1% expected, and up from -0.9% in May), highlighting the resilience of the U.S. economy. Global stock markets advanced and the S&P 500 hit a new all-time high.
The strong sales report did not change overall market expectations of two interest rate cuts from the Fed for this year, although the first one has been almost fully pushed from September to October. US treasury yields were little changed during yesterday’s session and the dollar edged higher.
In the euro area, the European Commission presented the next Multiannual Financial Framework for 2028-2034. It is a €2 trillion budget (on average, 1.3% of the GDP per year), an increase from the €1.2 trillion for the 2021-2027 budget. Nonetheless, markets took little notice and sovereign yields ended the session flat.