Market navigator: week of 14 July 2025

Summary

• What happened last week: Country tariff implementation delayed while targeting specific sectors like copper, China's deflationary pressures persisted, and central banks in Australia and New Zealand maintained current settings
• Markets in focus: US equities consolidated near historic highs ahead of earnings season, the Hang Seng remained range-bound, and Bitcoin established new records above $118,000
• The week ahead: China's Q2 GDP data will test economic resilience amid trade tensions, while major economy inflation readings will guide monetary policy expectations.

What happened last week

• Tariffs timeline extended: Implementation of reciprocal tariffs has been postponed from 9 July to 1 August, with notifications issued to 23 countries. Market response remained subdued except for Brazil, which faces a 50% tariff linked to political considerations rather than trade metrics, and Canada, subject to a 35% levy. BRL/USD declined 3.1% before recovering partially.
• Sectoral tariff expansion: A 50% tariff on copper imports becomes effective 1 August, while pharmaceutical goods face potential levies up to 200%. US copper futures surged 17% to $5.88/lb before settling at $5.59/lb. The COMEX-LME spread reached historic levels, rendering arbitrage transfers uneconomical.
• China's deflationary pressures persist: Consumer price index recovered to +0.1% year-on-year (YoY) after four months of contraction. However, producer prices declined 3.6% YoY, marking the steepest fall since June 2023, reflecting subdued external and domestic demand.
• RBA and RNZ maintain policy stance: While the decision to hold rates in New Zealand was widely expected, the Reserve Bank of Australia's (RBA) decision to hold rates surprised markets, with bond traders previously pricing 94% probability of a cut. The RBA requires sustained evidence of inflation moderating to 2.5%. The ASX 200 declined 0.3% whilst AUD/USD advanced 0.4% to 0.6578.

Markets in focus

US equities consolidate ahead of earnings season amid trade policy uncertainty

Investors largely shrugged off tariff announcements as the extended deadline provides three weeks for diplomatic negotiations. Major US indices retreated marginally from previous week's historical peaks, with the Nasdaq 100 declining 0.4% and the Dow Jones falling 1.0%.

Over the weekend, President Trump has threatened to impose 30% tariff European Union arrangements. The IG's weekend indices US Tech 100 declined by 0.5% while the Germany 40 declined by 1% following the news.

The Q2 US corporate earnings season commences, representing a critical performance driver for July as markets navigate elevated valuations. Analysts project 4.9% YoY growth for the S&P 500 in Q2, significantly below Q1's actual 13.3% and the 10-year average of 9.2%. Major banks, Netflix and Johnson & Johnson feature prominently in this week's reporting schedule.

Technical analysis indicates the US Tech 100 is consolidating near recently established historic highs. Traders await directional signals to assess potential for testing the next psychological resistance at 23,000. Maintenance above the 20-day simple moving average at 22,442 preserves the ascending trend from mid-May. Failure to hold this level may drive the index towards support around 21,500.

Figure 1: US Tech 100 index (daily) price chart

Hang Seng Index remains constrained within narrow trading range

Supported by risk-on sentiment, the Hang Seng Index (HSI) advanced 0.9% last week, closing at 24,140. The index has traded within a +/-500 point range from 24,000 for 15 consecutive sessions, reinforcing this level as substantial resistance from both technical and psychological perspectives.

Star Plus Legend emerged as the top performer on the Hang Seng Composite index. As a proxy for Jay Chow's entertainment business, shares surged 174% following the Asian pop star's official account launch on Douyin, the domestic version of TikTok. Materials represented the sole sector generating negative returns amid uncertainties surrounding international copper prices following recent US tariff policies.

Technical indicators have improved for the HSI as it rebounded swiftly after approaching the lower boundary of the narrow uptrend channel established from 24 April at approximately 23,700, with the year's peak at 24,874 in sight. The moving average convergence divergence (MACD) indicator approaches positive crossover territory. Material support should be found around 22,500.

Figure 2: Hang Seng Index (daily) price chart

Bitcoin establishes new record above $118,000

Beyond risk-on sentiment, anticipation of the GENIUS Act discussion in the House this week has bolstered optimism. If enacted, the legislation would represent the first US law regulating stablecoin issuers. Bitcoin appreciated 8% last week, approaching $119,000 before retracing to current levels.

Following record highs established on 23 May, Bitcoin has maintained a mildly bearish trajectory. However, last week's price action suggests the correction phase has concluded. Momentum indicators are improving as July trading volume tracks to recover or exceed May's levels following a subdued June. Institutional investor flows predominantly drive activity, with market capitalisation now exceeding $2.2 trillion.

A 61.8% Fibonacci extension of the upward movement from 7 April to 23 May indicates potential for prices to reach $121,439 before encountering material resistance. The previous high of $111,977 has established support.

As highlighted in our Market Navigator on 30 June, Ether — the second-largest cryptocurrency — has demonstrated higher market sensitivity (beta). Last week's rally confirmed this analysis as Ether outperformed Bitcoin with a 15% gain, though it remains 28% below its 52-week high.

Figure 3: Bitcoin (daily) price chart

The week ahead

The week ahead delivers crucial economic assessments across major economies, with China's Q2 gross domestic product (GDP) data taking centre stage as markets evaluate whether the world's second-largest economy can maintain momentum amid escalating trade tensions and domestic headwinds.

China's economy expanded robustly by 5.4% year-on-year (YoY) in Q1, supported by strong industrial output and export growth as manufacturers accelerated shipments ahead of looming tariffs. Government trade-in subsidies also spurred a sharp rebound in retail sales, providing a substantial boost to headline gross domestic product.

However, the intensifying US-China tariff war in April has led to noticeably weaker purchasing managers' index (PMI) readings throughout Q2, raising questions about whether resilient retail strength alone can offset mounting external headwinds.

While consumer prices edged up slightly from -0.1% to +0.1% last month, inflation remains subdued, and producer prices continue to contract, highlighting ongoing deflationary pressures. Combined with persistent weakness in the property sector, these domestic challenges are likely to weigh on near-term growth.

Against this backdrop of mixed signals, we anticipate China's YoY GDP growth to ease to 5.2% in Q2.

Elsewhere, inflation readings across three major economies will command significant attention, as US consumer price data tests whether tariff impact will begin to manifest, whilst UK inflation figures gauge the Bank of England's policy trajectory and Japan's price pressures reveal the persistence of above-target inflation amid economic uncertainty. The University of Michigan's consumer sentiment reading for July will conclude the week, offering critical insights into American household spending intentions.

Figure 4: China's GDP growth rate

Key macro events this week

Monday 14 July 2025

• 11.00am (HK time) – China Balance of Trade (June): previous $103.22B, consensus $109B
• 11.00am (HK time) – China Exports YoY (June): previous 4.8%, consensus 5%
• 11.00am (HK time) – China Imports YoY (June): previous -3.4%, consensus 1.3%

Tuesday 15 July 2025

• 8.30am (HK time) – Australia Westpac Consumer Confidence Change (July): previous 0.5%
• 10.00am (HK time) – China GDP Growth Rate YoY (Q2): previous 5.4%, consensus 5.2%
• 10.00am (HK time) – China Industrial Production YoY (June): previous 5.8%, consensus 5.6%
• 10.00am (HK time) – China Retail Sales YoY (June): previous 6.4%, consensus 5.5%
• 8.30pm (HK time) – US Core Inflation Rate MoM (June): previous 0.1%, consensus 0.3%
• 8.30pm (HK time) – US Core Inflation Rate YoY (June): previous 2.8%, consensus 3.0%
• 8.30pm (HK time) – US Inflation Rate MoM (June): previous 0.1%, consensus 0.3%
• 8.30pm (HK time) -- US Inflation Rate YoY (June): previous 2.4%, consensus 2.6%

Wednesday 16 July 2025

• 2.00pm (HK time) – UK Inflation Rate YoY (June): previous 3.4%, consensus 3.4%
• 8.30pm (HK time) – US PPI MoM (June): previous 0.1%, consensus 0.2%

Thursday 17 July 2025

• 7.50am (HK time) – Japan Balance of Trade (June): previous -¥637.6B, consensus ¥353.9B
• 2.00pm (HK time) – UK Unemployment Rate (May): previous 4.6%, consensus 4.6%
• 8.30pm (HK time) – US Retail Sales MoM (June): previous -0.9%, consensus 0%

Friday 18 July 2025

• 7.30am (HK time) – Japan Core Inflation Rate YoY (June): previous 3.7%, consensus 3.3%
• 8.30pm (HK time) – US Building Permits Prelim (June): previous 1.394M, consensus 1.39M
• 8.30pm (HK time) – US Housing Starts (June): previous 1.256M, consensus 1.30M
• 10.00pm (HK time) – US Michigan Consumer Sentiment Prelim (July): previous 60.7, consensus 61.5

Key corporate earnings

Tuesday 15 July 2025

• Bank of New York Mellon
• Wells Fargo
• Citigroup
• JPMorgan Chase

Wednesday 16 July 2025

• Johnson & Johnson
• Bank of America
• ASML
• Morgan Stanley
• Goldman Sachs
• United Airlines

Thursday 17 July 2025

• Taiwan Semiconductor Manufacturing
• Netflix

Friday 18 July 2025

• American Express

Source: Trading Economics, Reuters (as of 12 July 2025)