Markets ignore economic and geopolitical risks

Despite the tensions. However, the slowdown, the markets go up, carried by the low dollar and the hope of a softening. For example,

The financial markets are optimistic. Meanwhile. American actions achieving historical heights thanks to the vote of the budget in the United States and a resilient labor market at first glance. However, the trade war is far from over. Similarly, While the summer season begins, everything seems radiant from the point of view of the market. In addition. Actions are exchanged on record levels, supported by a low dollar, down more than 10% in 2025, the worst first half since 1973. However, As often, a low dollar generates an upward dynamic on the markets ignore economic geopolitical risks new markets. Therefore, Companies with a significant turnover abroad, whose MAG7, have propelled the markets ignore economic geopolitical risks clues up. In addition, Treasuries react to employment, while the bunds seem to digest the increase in primary in the third quarter. All sovereign and credit spreats are tightening in the markets.

Markets carried by the low dollar

The American situation is worrying. GDP growth in the 2nd quarter will depend on the stocks while domestic demand weakens. The labor market data seems correct at first glance, with an unemployment rate down 4.1% and continuous job creations. That said, the drop in unemployment is linked to lower participation, foreign workers missing in the call. The increase in employment. from 147,000 in June constitutes a positive surprise, but jobs in public education represent half of the total. In the private sector, employment increases by 74,000, well below expectations. In addition. most of markets ignore economic geopolitical risks new these new private jobs come from health. education, even leisure sectors, but ADP data do not seem to markets ignore economic geopolitical risks confirm it. Health job creations are doubtful given the significant budget cuts planned for Medicaid. In addition, the decrease in worried hours worked. The employment component of the ISM of the Services fell 3.5 points to 47.2 in June. Salaries slow down, indicating that lower unemployment should not feed inflationary fears. In the euro area, surveys from Germany are improving. The prospects for infrastructure expenditure planned for the second half gradually fuel business confidence. French surveys were less well oriented, but growth is strengthening in the euro zone. The indices of Chinese and Japanese purchasing directors are encouraging despite the trade war.

Economic fundamentals lagging behind

Financial markets ignore the consequences of tariff increases. geopolitical risks while taking advantage of the dollar adjustment. Mediocre data will markets ignore economic geopolitical risks new cement a fed flexibility scenario in the second part of the year. Jerome Powell having clearly told Sintra that the rates would have markets ignore economic geopolitical risks already dropped without. customs duties. Nevertheless, the Fed should maintain the status quo in July, judging that the labor market is still resilient. The tendencies was reversed due to a readjustment of positions before the weekend of July 4. The Gilt is under pressure following the turnaround on the social reform. Additionally, the rumors of dismissal of Rachel Reeves, the 30 years away of 19pb in one session. Keir Starmer then intervened to appease fears of the market. In Europe, the prospects of Bunds’ emissions weigh on long maturity. The 30th exceeds 3%. The European Central Bank is ready to act if necessary, but stable inflation and growth give it time. Furthermore, The peripheral spreads are similar to the Core countries, the markets ignore economic geopolitical risks new Italian BTPs exchanging at 84PB. On the credit, the Spreads Investment Grade and High Yield are quickly tightening while the emissions decrease. The low dollar supports American shares, markets ignore economic geopolitical risks including small capitalizations, which outperform Europe.