Economic News: Saturday, July 26, 2025 – CBR lowers rates, Wall Street hits new highs

World financial markets are wrapping up the week on an optimistic note. In the USA, stock indices hit historical highs owing to strong corporate earnings and hopes for imminent monetary policy easing. Meanwhile, prices for safe-haven assets like gold remain near record levels, although risk appetite has slightly increased amidst progress in trade negotiations. Investors from the CIS are particularly focused on the Central Bank of Russia's unexpected sharp cut in the key interest rate, as well as macroeconomic signals from Europe and China. Below is a detailed review of key economic news as of July 26, 2025, prepared in a business style for investors.

US Markets: Record Indices and Fed Expectations

The American stock market is demonstrating confident growth: the S&P 500 and Nasdaq indices reached new historical peaks by the end of the week. On Thursday, the S&P 500 gained about 0.1%, while the Nasdaq rose by 0.2%, and on Friday, both indices remained close to these levels. The rally is supported by robust Q2 earnings reports and signs of economic resilience. Fresh data showed that consumer spending and the labor market remain strong: for example, durable goods orders dropped sharply by 9.3% in June after a surge in May, but excluding transportation, orders actually rose (+0.2% m/m), indicating stable business investment. Furthermore, initial jobless claims fell to a three-month low, signaling continued recovery in the labor market.

Investors are cautiously optimistic about the upcoming Federal Reserve meeting (July 29-30). It is expected that the regulator will keep the rate at the current level, considering the slowdown in inflation and recent dovish comments from some Fed officials. Moreover, market participants are starting to price in the possibility of a Fed rate cut towards the end of the year. These anticipated supportive monetary policy measures fuel stock market growth, particularly in the high-tech sector. Analysts note that among investors, the FOMO (fear of missing out) effect is intensifying: the rapid growth of IT giants’ stocks—from chip manufacturers to cloud services—has led to American stock indices experiencing their best first half in decades. Next week, attention will shift to the reports from tech industry leaders (including Alphabet and Tesla), whose results will set the tone for the market during the peak of summer earnings season.

Europe: Modest Growth and Trade Negotiations

European stock markets wrapped up the week predominantly neutrally. The pan-European STOXX 600 index hovered around 547 points on Friday, showing virtually no change for the week. Investors are assessing mixed signals: on the one hand, some corporate reports were encouraging, while on the other, macroeconomic data remains ambiguous. In Germany, the Ifo business climate index unexpectedly edged up in July (to 88.6 points from 88.4 in June), although this remains below forecasts. This modest increase in business sentiment suggests that the largest economy in Europe is avoiding a deeper recession for now, although companies continue to exercise caution. In the UK, moderate retail sales data emerged: in June, sales volume increased by about 0.9% m/m after a decline in May, raising hopes for the resilience of consumer spending despite high inflation. At the same time, the GfK consumer confidence index in the UK dipped slightly (to -19 points from -18 in June), reflecting continuing household caution.

A key theme in Europe remains international trade relations. In light of new challenges in global trade, an increasing number of companies mention the impact of tariffs and barriers in their reports. The focus is on negotiations between the USA and the European Union. President Donald Trump's administration has intensified its rhetoric concerning import tariffs; however, by August 1, positive shifts are emerging: Washington and Brussels are close to an agreement that could prevent the imposition of large new tariffs. Earlier in the week, the US also concluded a separate trade deal with Japan, avoiding tariffs on Japanese cars. Now, European businesses hope for a similar compromise for the EU: uncertainty surrounding potential tariffs significantly reduces appetite for risk. Industrial and automotive giants in Europe are particularly vulnerable, having already incurred costs from tariff confrontations. For instance, recent half-year results from Volkswagen showed a profit decline of over 30%, largely due to additional expenses of about €1.3 billion related to tariffs in the US. Despite this, most European indices remained in the green, as hopes for imminent easing from central banks and companies’ adaptation to new conditions support the market.

Asia: Slowdown in China and Uncertainty Factors

Asian markets displayed mixed dynamics towards the end of the week against a backdrop of local risks and global trends. Investors are concerned about signals of a slowdown in the Chinese economy: according to recently published data, China’s GDP growth in Q2 was around 5.2% YoY, which is slower than the pace at the beginning of the year. The cooling is attributed to cautious behavior from Chinese consumers and weak export demand. Statistics indicate a decline in retail sales and investment activity—a sign that the post-pandemic recovery is entering a more challenging phase. Beijing announced a series of targeted economic support measures (stimulating domestic demand, tax benefits for businesses); however, global investors doubt whether these steps are sufficient to accelerate growth to targeted levels of ~5.5-6% per year.

Further pressure on sentiment in Asia comes from trade and political factors. After the introduction of new US tariffs on a range of Chinese goods at the beginning of the year, many regional exporters have faced a decline in orders. While the US and its partners discuss ways to ease trade disputes, uncertainty persists. Export-oriented economies in Asia (especially the high-tech sectors of Southeast Asia) are vulnerable to a possible intensification of the trade war in the second half of the year. Additionally, in Japan, domestic politics have taken the spotlight: ahead of elections for the upper house of parliament (set to take place on Sunday), the ruling coalition risks losing its stable majority. This political uncertainty, coupled with persistently low inflation (~3% in Tokyo against a target of 2%), is causing the yen to remain under pressure, hovering around ¥148 per dollar, close to multi-year lows. Nevertheless, the Japanese Nikkei 225 index finished Friday with a rise of about 0.4%, banking on the continuation of stimulating policies regardless of the election outcome. Overall, the composite index of stocks in the Asia-Pacific region changed slightly this week: support from Wall Street’s positivity was balanced by local risks and cautious investor sentiments in Asia.

Commodity Markets: Oil in Balance, Gold at Its Peak

The energy market is characterized by a relative equilibrium in prices. A barrel of Brent oil is maintaining a narrow range of $67–$70, showing only slight fluctuations over the past month. By the end of the week, Brent quotes were around $69 per barrel, slightly above Monday’s levels. Prices are supported by progress in trade negotiations: expectations of potential deals between the US and its partners have bolstered demand forecasts for oil. Specifically, the news of the agreement between Washington and Tokyo on tariffs, along with hopes for a US-EU compromise, have imbued the market with optimism, outweighing supply-increasing factors. Reports emerged that US authorities might partially ease restrictions on oil production in Venezuela, potentially allowing Chevron and other partners of PDVSA to increase heavy crude exports by more than 200,000 barrels per day. However, these plans are only moderately supporting prices at present, as traders account for gradual growth in Venezuelan supply, while overall global oil inventories remain limited due to OPEC+ actions. Temporary disruptions in the export of Black Sea oil (including suspensions of shipments of Azeri BTC in the Turkish port of Ceyhan), which have restricted supply in the market, are also providing additional support.

On the other hand, the growth potential for oil prices is limited by signs of slowing global economic activity. Mixed macroeconomic data from the US and China lead to forecasts of moderate demand for energy carriers in the second half of the year. Many investment banks maintain a cautious forecast for Brent at year-end—around $60 per barrel—expecting that risk of weak demand will again come to the forefront. Thus, oil prices are balancing between supply-reducing factors (voluntary production limits from OPEC+ countries and sanctions against Russia) and signs of weakening fuel consumption.

Gold, meanwhile, continues to hold near historical highs, although its price corrected downwards from peaks at the end of the week. The spot price of gold, following a strong jump in the first half of July (to a record ~$3,350 per ounce), has slightly decreased amid profit-taking. On Friday, the precious metal traded around $3,340–$3,350, which is 0.5–1% lower than recent highs. The pressure on gold came from increased risk appetite and a partial strengthening of the dollar amidst trade optimism. Moreover, strong employment data in the US reduced expectations for an imminent Fed rate cut, leading to a rise in Treasury yields and making gold slightly less attractive in the short term. Nonetheless, fundamental drivers for demand for precious metals remain intact: inflation in Western economies is still above target levels, geopolitical tensions persist, and a potential shift in central banks' approach towards easing looms ahead. Analysts note that amidst ongoing uncertainty, gold continues to serve as a “safe haven.” Any new spikes in volatility or signs of recession can push prices upwards again. At the same time, other precious metals corrected after the rally: for example, platinum, which reached decade highs, retraced a few percentage points by the weekend due to profit-taking by investors.

Currency Markets: Dollar and Euro, Pressure on Emerging Currencies

At the end of the week, the currency market saw mixed movements among major currencies. The US dollar, after a decrease in mid-July, somewhat regained its positions. The Dollar Index (DXY) remained close to the 100-point mark: robust statistical data and rising bond yields supported the dollar. Positive surprises in the US economy (including a low unemployment rate) solidified expectations that the Fed will not rush to cut rates, which is preventing a decline in the dollar. In the EUR/USD pair, trading hovered around $1.18–1.19 per euro: the single European currency could not significantly break above, although the ECB, in its meeting on July 24, maintained the rate at 2.1%, simultaneously hinting at inflation nearing the target. Some softness in the ECB’s rhetoric (pause in rate hikes) was offset by improving economic sentiment in Germany, resulting in the euro ending the week without significant changes against the dollar.

Among currencies of developed countries, the Japanese yen attracted focus as it weakened to ¥148 per $1. The pressure on the yen is attributed to a combination of domestic political uncertainty and the persistently ultra-loose stance of the Bank of Japan. The market expects that even after elections, the Japanese regulator will continue to adhere to low rates, considering inflation around 3% and the need to support economic growth. Against this backdrop, investors in Asia preferred to take profit in yen; the Japanese currency hit its lowest values since 2022.

In the emerging markets segment, currency trends remain under pressure from global factors. The Russian ruble weakened slightly over the week: the official exchange rate of the dollar set by the Central Bank of Russia for the weekend rose to ~79.55 ₽ (from ~78.86 ₽ the previous week). Pressure on the ruble intensified after the CBR lowered the key rate, as well as due to importers' demand for foreign currency against the backdrop of a recovery in imports. Other CIS currencies also showed decreased dynamics: for instance, the Kazakh tenge is holding around 542 KZT per $1, close to multi-month lows. The head of the National Bank of Kazakhstan stated that the current level of the tenge is fundamentally undervalued; however, there is no obvious speculative activity observed in the market—the weakening is explained by external trade factors and the dynamics of the ruble. Overall, currencies of emerging markets remain sensitive to global risk appetite: improvements in trade relations can support them, while tightening financial conditions in the US could pose new challenges.

Russia: Key Rate Cut, Markets React

For the Russian financial market, the key event of Friday was the decision by the Central Bank of Russia to cut the key interest rate by 2 percentage points—from 20% to 18% per annum. This move was more aggressive than most analysts expected (the consensus forecast anticipated a reduction of 1 percentage point). The reason for this monetary policy easing was a further decline in inflation: annual price growth has dropped to approximately 7–8%, significantly lower than the peaks earlier in the year. The Bank of Russia noted in its accompanying statement that inflation expectations among the population are decreasing and consumer demand remains subdued, creating room for cheaper credit. The regulator also improved the inflation forecast for the end of 2025 and allowed for the possibility of further rate cuts if current trends persist.

Markets reacted ambiguously to the CBR's bold decision. Bonds saw an influx of buyers: OFZ yields fell on expectations of cheaper funding, increasing the attractiveness of government debt. However, stocks on the Moscow Exchange showed mixed dynamics throughout the day—several rate-sensitive sectors (such as energy and consumer sectors) received a boost, while bank stocks declined due to expectations of shrinking interest margins. Consequently, by the end of Friday, the MOEX index showed little change, remaining around 2820 points; however, the internal background in the stock market improved due to the prospect of softer financial conditions. As for the currency, as mentioned earlier, the ruble weakened slightly after the rate announcement: the lower rates make ruble assets less attractive to investors, which traditionally puts pressure on the exchange rate. Nevertheless, no significant drop in the ruble occurred—largely because some market participants anticipated the easing of policy. Investors' attention now shifts to the Central Bank's further steps: if inflation continues to cool, the rate could drop to 15-16% by the end of the year, which would serve as an additional stimulus for the economy.

Corporate Reports: From Consumer Demand to Industry

The quarterly earnings season is in full swing, and results from major companies worldwide provide valuable benchmarks for the state of various sectors of the economy. Below are some of the most notable reports and trends:

• HCA Healthcare – the leading private hospital network in the US delighted investors with strong figures. In Q2, HCA’s net income exceeded $1.7 billion (EPS around $6.84), significantly surpassing last year’s results. The company raised its financial outlook for 2025, expecting annual earnings in the range of $25.5–27 per share—a roughly 5% increase over the previous estimate. High demand for medical services (increased number of scheduled procedures and stable bed occupancy) compensated for rising costs, including personnel payment. HCA's shares reacted positively, confirming investors' confidence in the resilience of the US healthcare sector.
• Aon plc – the global giant in insurance and risk management showcased double-digit growth. Aon’s revenue in Q2 rose by 11% year-on-year (to $4.2 billion), and adjusted earnings per share increased by 19%, exceeding analysts’ forecasts. The company notes high demand for insurance brokerage and consulting services: despite market volatility, corporate clients continue investing in risk management. An additional growth factor was high interest rates, allowing Aon to earn more from investing insurance reserves. The strong report reinforced confidence that the insurance business remains resilient even amid global uncertainties.
• Charter Communications – the second-largest cable operator and internet provider in the US reported mixed results. Charter’s net income in Q2 was around $1.3 billion, slightly above last year’s level; however, revenue growth was modest (+0.6% YoY to ~$13.8 billion). The company is managing to increase the number of broadband internet subscribers, offsetting the loss of cable TV subscribers (“cutting the cord”). Nonetheless, the pace of growth in internet connections has slowed, and quarterly profit barely met market expectations. Investors reacted to the report with caution: results confirm that the traditional cable business is facing challenges due to competition from streaming services, although Charter’s active investment in networks and services brings partial success.
• Coca-Cola Co. – the world beverage producer demonstrated resilience in consumer demand. For Q2, Coca-Cola’s revenue grew by about 8% compared to last year, with profits exceeding Wall Street estimates. Sales increased mainly from emerging markets in Asia and Latin America, where demand for the company's brands continues to rise even amid inflation. Management confirmed the forecast for the entirety of 2025, expecting high single-digit revenue growth. These results signal that even with rising prices, consumers are not cutting back on everyday goods spending—a key indicator of the health of the global consumer sector.
• Volkswagen AG – Europe’s largest car manufacturer faced serious difficulties. According to half-year results, Volkswagen’s operating profit in Q2 fell by more than 29% YoY (to ~€2.3 billion), and net profit declined by 36%. The main reasons include a sales slump in the key market of China, where competition from local electric vehicles is intensifying, as well as costs resulting from American import tariffs. The company was forced to lower the profit forecast for the entire year. Despite revenue growth in the electric vehicle segment in Europe, global challenges—from tariff wars to excess production capacity—are weighing down the automotive industry. The weak VW report has made investors cautious about sector outlook, causing shares of automakers in the region to experience short-term pressure.
• NatWest Group – one of the largest banks in the UK pleased investors with strong results against the backdrop of high interest rates in the country. For the first half of 2025, NatWest achieved a net income of about £2.5 billion, an 18% increase compared to the previous year. Profit growth was driven by an expanded interest margin (to 2.28% versus 2.07% last year), as the Bank of England raised rates to their highest levels in recent years. The bank's loan portfolio remains of high quality: the level of overdue debts increased slightly but remains under control. Strong profitability allowed NatWest to announce a new share buyback worth £1 billion, signaling excess capital and management’s confidence in future cash flows. These news supported NatWest stock and generally reinforced trust in the stability of the UK banking sector.
• Eni S.p.A. – Italian oil and gas giant reported a profit decline but exceeded analysts' expectations. Eni’s adjusted net income in Q2 amounted to €1.13 billion, 25% lower than a year ago due to lower oil and gas prices. Nevertheless, the result was better than forecasts (around €0.93 billion was expected). The decrease in energy resource prices from peak levels in 2024 impacted production revenues, but the company managed to compensate for this through increased output from several projects and reduced debt burden. Free cash flow allowed Eni to even reduce net debt, enhancing financial stability. Investors reacted positively to the report: despite the profit decline, effective expense management and stable operational performance confirm that Eni's oil and gas business is adapting to market volatility.
• HDFC Bank – India’s largest private bank demonstrated sustained high growth, reflecting the dynamic development of emerging economies. For the quarter ending June, HDFC's net income grew by approximately 5% year-on-year. The bank's loan portfolio expanded by more than 15% over the year, particularly due to mortgage and consumer lending, while asset quality remained high (the proportion of defaults is around historical lows). Notably, HDFC Bank announced a rare initiative for the Indian market—a bonus share issue for current shareholders, indicating management’s confidence in the bank’s financial strength. Strong results from HDFC and several other Indian financial institutions underscore the attractiveness of the Indian banking sector, which benefits from digitization and the growth of the middle class.
• Southern Copper – one of the leading global copper producers finished the quarter with stable operational indicators despite price fluctuations in the metals market. The company’s copper output remained high, allowing revenue to stay close to last year's figures. However, it is estimated that Southern Copper's net profit may have slightly declined compared to Q2 2024. This was due to a decrease in average copper prices during the reporting period: uncertainty around the Chinese economy—the largest consumer of metals—led to volatility in copper quotes. Nevertheless, Southern Copper's management expressed optimism regarding the mid-term outlook: the push for developing green energy and electric vehicles supports copper demand. Investors are monitoring whether the company can maintain low cost levels amid inflation in the mining sector. Overall, Southern Copper's results serve as a barometer of global industrial activity: relative stability in indicators suggests that global demand for industrial metals remains healthy, although it is influenced by Chinese factors.

Investor Takeaway: The concluding week has brought positive signals for markets—from record highs on Wall Street to the easing of the CBR's policies—yet several risks persist. Strong corporate earnings instill confidence in the resilience of many companies, but China’s slowdown and trade disputes may introduce volatility at any moment. Investors from the CIS should continue to monitor the actions of central banks (both global and regional) and the developments in trade negotiations among leading economies closely. Divergent trends across various sectors (the prosperity of services and consumer goods against the difficulties faced by industrial giants) emphasize the importance of portfolio diversification. In the coming days, the focus will shift to the Fed's decisions and the reports from tech leaders—they could set the tone for global markets for the remainder of the summer. By remaining vigilant and maintaining a healthy degree of caution, investors can capitalize on opportunities presented by the current economic situation.