Weekly Macro Outlook: Markets Brace for Powell’s Speech, ECB Pause, and U.S. Data Wave- 21.07.2025

The global financial market outlook remains cautiously optimistic as investors brace for a pivotal week of central bank decisions and key economic data. With the ECB and Turkey’s central bank set to announce critical policy updates, and Fed Chair Powell scheduled to speak, markets are closely watching inflation trends, geopolitical developments, and monetary guidance. Meanwhile, earnings momentum in the U.S. continues to support equities, while concerns over political uncertainty and regional risk weigh on emerging markets.

Global Overview

Global markets ended the week in a mixed tone, awaiting key central bank moves. While U.S. stocks reached all-time highs on strong earnings, eurozone and EM markets tread cautiously as the ECB prepares to pause and risk around Turkey rises ahead of its rate decision. Markets are now positioned for a wave of data next week: U.S. PMIs, housing, and jobs; ECB & BoE commentary; and Turkey’s July 24 rate decision.

U.S. Data & Fed Comments Shape the Global Financial Market Outlook

Last Week:

• S&P 500 and Nasdaq hit record highs as tech, banks, and retail firms posted strong Q2 earnings.
• Economic data was mixed: retail sales softened, industrial output rebounded, consumer sentiment rose but housing starts weakened.
• Treasury yields declined: 10Y at ~4.15%, 2Y below 4.45%.

This Week:

• Fed Chair Powell speaks on Thursday. Key releases include initial jobless claims, flash PMIs, existing and new home sales, and durable goods orders. Markets are eyeing signals on the timing of the next rate cut.

Eurozone and ECB Policy Signals: A Key Watch in the Global Financial Market Outlook

Last Week:

• Eurozone inflation stayed near 2.5% core YoY. Industrial production in Germany beat expectations.
• Bund yields dipped to ~2.42% amid dovish ECB sentiment.
• Euro softened, trading near $1.086.

This Week:

• ECB meets on July 24 — no rate change expected, but guidance on balance sheet and future path will be key.
• Markets will also watch EU reaction to upcoming U.S. tariffs.

UK Inflation and BoE Outlook Remain in Focus

Last Week:

• FTSE 100 advanced, led by banks and commodities.
• CPI held at BoE’s 2% target; core and services inflation remain elevated.
• Retail sales rose modestly.
• GBP/USD softened to ~1.29.

This Week:

• UK flash PMIs and consumer confidence data.
• BoE commentary expected to shed light on cut prospects, currently ~50% priced for August.

Japan’s Policy Shift and Its Global Financial Market Outlook Impact

Last Week:

• LDP lost upper house majority — yen gained slightly; Nikkei was flat.
• Q1 GDP revised to –0.2% annualized; private investment resilient.
• BoJ maintained yield curve control, intervening in JGBs to suppress long-term rates.

This Week:

• Watch for policy signals in post-election announcements and BoJ communications. Trade and services data may highlight vulnerabilities.

China Growth Data and Policy Easing Prospects

Last Week:

• Equities gained modestly on improved rare-earth exports and trade optimism.
• Q2 GDP at ~4.9% YoY, slightly above expectations; industrial and retail data slightly missed forecasts.
• Yuan remained weak near 7.28 amid PBoC liquidity support.

This Week:

• Flash PMIs, property data, and potential new policy easing ahead of leadership meetings.

Turkey and EMEA Markets: Inflation, Politics, and Central Bank Action

Turkey

Last Week:

• Central Bank maintained rates: one-week repo at 46.0%, overnight lending at 49.0%, signaling a cautious, hawkish stance 
• Annual inflation slowed to ~35.1% in June; monthly decline in food and beverages noted.
• Politics added volatility as the arrest of opposition mayors rattled markets. The lira faced depreciation pressure; 10Y yields near 26%; TL auctions showed elevated volatility.

This Week:

• July 24 (Thursday): CBRT is expected to cut the repo rate by ~250 bps to 43.50% in its first easing move since April 
• Market outlook: economists widely expect cuts driven by disinflation and stable core inflation; policy rate could decline further to ~36% by year-end.
• Watchables post-decision: TL movements, bond yields, CBRT’s inflation projections, and tone regarding policy path.

Other EMEA Highlights

• Hungary & Poland: Inflation data and central bank commentary could impact regional FX and interest differentials.
• South Africa: Continued disinflation supports modest rate outlook; rand slightly stronger.
• Russia: FX remains volatile amid sanctions and capital controls.
• Middle East & Africa: Oil-driven FX movements persist; regional geopolitics add uncertainty.

Commodities & Crypto: Gold, Oil and Bitcoin Trends

• Oil: WTI/Brent nudged higher, supported by OPEC+ discipline and geopolitical supply risks.
• Gold & Platinum: Gold held steady; platinum climbed to multi-month highs on industrial demand and safe-haven flows.
• Bitcoin: Traded near $118k–$119k with support from regulatory clarity and stablecoin frameworks.

Key Events Ahead Shaping the Global Financial Market Outlook

1. Turkey Rate Decision – July 24, with ~250 bps cut expected (to 43.5%).
2. ECB Meeting – July 24, pause likely; forward guidance critical.
3. Fed Speech & U.S. Data: Powell’s remarks and fresh PMIs, housing, jobs.
4. Japan Politics & BoJ Stance: Post-election policies & yield guidance.
5. China Data & PMI: Industrial, property, and trade flows highlight growth outlook.