Strong Start to H2 2025 as Equities Climb, Dollar Weakens

Global markets kicked off the second half of 2025 on a positive footing, driven by strong equity momentum, improving global trade sentiment, and stable corporate earnings. However, lingering uncertainties over U.S. fiscal policy and commodity dynamics continue to pose downside risks.

U.S. Jobs Beat Forecasts, But Dollar Remains Soft

The June Nonfarm Payrolls report surprised to the upside with +147,000 jobs added, while the unemployment rate dipped to 4.1%. The data reinforced the view that the U.S. labor market remains resilient.

Yet, the U.S. Dollar stayed weak, with only modest recalibration in rate cut expectations for September. Markets still largely price in a Fed cut later this quarter.

Dollar softness also stems from fiscal concerns linked to Trump’s proposed tax reforms—billed as “big, beautiful bills”—which have reignited worries over long-term debt sustainability and policy coherence.

Gold Slips as Risk Appetite Grows

Gold prices continued to edge lower, reflecting reduced safe-haven demand as equities rose and volatility remained contained. With the Fed adopting a cautious tone and geopolitical risks easing, capital is rotating out of defensive assets like bullion and into higher-risk instruments.

XAUUSD, 4-H Chart Analysis | Source: Ultima Market MT5

Despite facing some downside pressure last week, gold continues to trade within a broad consolidation range.

Notably, the price has remained above the key psychological level of $3,300, which serves as a near-term support and a critical confidence indicator for the market. Holding above this level may signal sustained bullish sentiment, while any decisive break below could trigger further downside momentum.

Oil: OPEC+ Surprises with Output Hike, Prices Steady

OPEC+ announced a production increase of 548,000 bpd for August, exceeding expectations and pushing oil markets into a new phase of adjustment.

Prices initially bounced late last week but softened over the weekend, as traders digested the supply increase alongside mixed demand signals from Asia and Europe. Both WTI and Brent remain in a consolidation range, with direction likely to be shaped by inventory data and macro indicators this week.

Equities: Bullish Momentum Carries Over

Stock markets continued their Q2 momentum into July, with major global indices climbing, supported by:

• Optimism around trade normalization
• Receding inflation concerns
• Robust corporate earnings guidance, particularly in tech and industrials

Investors now look to this week’s economic calendar and event—including the Trump’s tariff 90-days pause—to determine whether the rally can extend or faces fresh volatility.

Market View: Confidence Intact, But Watch for Policy Risks

“Markets are entering Q3 with strong momentum, but policy and trade risks—especially around U.S. fiscal outlook—could easily derail sentiment,” said Shawn Lee, Senior Market Analyst at Ultima Market.

“Despite solid fundamentals kicking off July, I remain cautious on the U.S. Dollar outlook due to unresolved fiscal risks. Equities may extend gains, but any shock from policy missteps or global data surprises could turn the tide quickly, and this week can be a decisive week” Shawn added.

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