NVDA was a touch disappointing, mostly on China, while other components were largely in line. Japan AI proxies are trading higher (GSXAJPAI +1.4%), though NVDA price action will come down to positioning setup.
GS Basics - Moving On. ISM Services. Systematic Length FICC and Equities | 5 August 2025 | 6:18AM UTC Overnight, Japan futures were unchanged. The JGB auction was a bit underwhelming, but fixed income remains well-supported, likely a reflection of last week’s softer U.S. data.
Markets higher as we bounced from the aggressive levels that we marked Monday’s open. Overnight Japan nearly +6% (valuations had approached covid lows) and China higher led by support from a swath of corporate buybacks announced + what would appear to be national team support.
Canada escaped Trump’s tariff announcement yesterday unscathed, as products that are eligible under the USMCA agreement will remain tariff-free. We expect that this exemption will cover over 80% of Canadian trade, and the tariff rate on Canadian exports to the US would only rise by 5.5% under Trump’s proposals.
The decline in Egypt’s annual headline CPI number for February was exceptionally large at over 12pp, but it did not really tell us anything that we did not already know.
In this CEEMEA Economics Analyst, we provide greater detail in support of our forecast for aggressive easing in policy rates over the coming 12 months.
We estimate there have been 268 preannouncements year-to-date and the average stock has moved +/-6.3% on the two days around these events. This year, stocks made positive moves following these events roughly 50% of the time.
As gold broke above $3,000/toz on March 14, we address the most frequently asked questions on the outlook for gold.
As gold broke above $3,000/toz on March 14, we address the most frequently asked questions on the outlook for gold.
The Euro area composite flash PMI improved to 50.4 in March (vs. 50.2 in February), a touch below consensus and close to our own expectations. The improvement was led by the manufacturing output index, which increased by 1.8pt to 50.7, the highest level in more than three years, while the services activity index edged down slightly to 50.4.
At its last meeting in January, Norges Bank’s Monetary Policy Committee kept the policy rate unchanged at 4.5% but reiterated the guidance that “the policy rate will likely be reduced in March”. Since then, spot activity data remained subdued, but the labour market showed signs of resilience and business expectations turned more positive.
SOX -1.6%. NVDA -3.4% closed lower despite unveiling its plans for more powerful chips and partnerships as it failed to excite investors. Jensen keynote was a two-hour emphasized the increasing computational demands of "agentic AI," autonomous AI agents, stating that these demands are significantly higher than previously anticipated (100x more than last year).
The Bank of Canada cut this week, facing potential economic headwinds from trade policy uncertainty. While growth has improved over the last two quarters, the BoC noted that it expected the trade conflict with the US to weigh on economic activity, while also increasing prices and inflation.
Despite a volatile fortnight in global FX markets, USD/Asia has stood out for its relatively stability with most pairs moving within a 0-1.5% range.
We have long stressed that diminished US exceptionalism represents a meaningful risk to our stronger Dollar view, and the path for the Yen in particular. When markets are most concerned about US growth, pushing both yields and equities lower, the Yen tends to outperform even the Dollar.
There is no doubt that Europe’s response to changing US policies has been swifter and more definitive than expected. In isolation, stronger fiscal spending should be a powerful antidote to policy uncertainty and other maladies that have plagued the Euro.
ur US economists recently revised their growth forecasts and are now below consensus for the first time in almost three years. At the same time, our European economists responded to the unprecedented German spending plans by upgrading their Euro area growth forecasts despite the looming tariff threats.
Three quick highlights from China.
In our view, the single most important secular trend in the options market is the growth of ETFs/MutualFunds that systematically trade options. Arun Prakash has done some great work cataloging each strategy to paint a picture of the AUM in specific flows (calls/puts, expirations, moneyness) to help investors understand the growth of these strategies.
The US has added 10% tariffs on China twice this year, and, contrary to expectations that tariffs should result in a weaker CNY, spot USD/CNY has drifted lower from 7.33 pre-inauguration to around 7.25 currently. We attribute this to a few factors. The broad USD itself has weakened, Chinese asset markets outlook has improved, and most importantly the CNY fix (which is a policy signal tool) has been stable at around 7.17, thereby restraining the movement in spot USD/CNY.
We have just returned from marketing in the UK over the past week (March 3-7th), which overlapped with announcement of Germany’s unprecedented fiscal package and several tariff related announcements.
Calendar 2025 Henry Hub prices have rallied 38% year-to-date, taking Summer 2025 NYMEX gas above $4.70/mmBtu today (March 10th).
We see both supply-side and demand-side reasons for the relative outperformance of production in the high-tech manufacturing sector. On the supply side, high-tech manufacturing sectors tend to receive more domestic policy support, creating stronger incentives for capital expenditure.
While simmering trade tensions have been a key driver of FX markets this year, optimism about a potential ceasefire deal in Ukraine and stronger fiscal support, especially from defense spending, have also raised the prospects of a better outcome for European growth.
While simmering trade tensions have been a key driver of FX markets this year, optimism about a potential ceasefire deal in Ukraine and stronger fiscal support, especially from defense spending, have also raised the prospects of a better outcome for European growth.
