Monthly Macro Review - July 2025

Macro at a glance

A whirlwind of recent diplomatic activity has reshaped key global trade relationships, with the United States forging significant new agreements with both the European Union and Japan. In a landmark agreement, the US announced a framework with Japan. The deal sets a 15% US tariff on Japanese imports. In return, Japan has reportedly pledged a colossal $550 billion investment in the United States, aiming to create American jobs and open its own markets further to US products, including vehicles and agricultural goods. Hot on the heels of the Japan agreement, the US and EU have seemingly averted a full-blown trade war. As reported by leading news outlets, the deal establishes a new 15% tariff on a wide range of European goods, mirroring the terms extended to Japan. In a significant concession, the EU has committed to a massive $750 billion increase in purchases of US energy, alongside other investments and defense acquisitions. (European Commission, Associated Press)

On July 17, Ukraine's parliament passed a contested law weakening the independence of the National Anti-Corruption Bureau (NABU). The move sparked sharp criticism from the EU and IMF, which warned it could jeopardize Kyiv’s accession process and financial aid. Meanwhile, Ukraine’s military situation continues to deteriorate. Russian forces are advancing around Avdiivka and Kupiansk, while Ukraine struggles with manpower shortages and delayed Western arms deliveries. In response, European countries are rearming at an unprecedented pace. Germany, France, and Poland have all announced major defense budget increases, with Warsaw set to spend over 4% of GDP on defense in 2025, more than any other NATO country. (FT, RTS, WSJ)

On July 22, a deadly clash between Thai and Cambodian troops erupted near the disputed Dangrek Mountains, killing 12 soldiers. The incident followed escalating disputes over illegal logging and border violations. Fearing broader conflict, Donald Trump intervened personally and brokered a ceasefire agreement on July 26 in Singapore. The accord commits both sides to withdraw troops and resume border talks under ASEAN supervision. (Le Figaro, Washington Post, Bloomberg)

One Sector, One Insight

Basic Materials and Energy :

Chevron (CVX) finalises the acquisition of Hess (HES) for $53 billion, giving it access to the productive Stabroek block in Guyana. ExxonMobil (XOM) challenged this transaction in court, claiming priority rights over Hess's 30% stake in the offshore field. However, on 18 July, an international arbitration tribunal ruled against Exxon, authorising the merger. This is a significant strategic advantage for Chevron. Guyana is one of the world's fastest-growing oil producers, with production expected to exceed 1.2 million barrels per day by 2027. The Stabroek block, operated by Exxon, contains more than 11 billion barrels of recoverable oil, with low production costs and long-term growth potential. The failure of the appeal also highlights the growing tensions between major US oil companies as high-quality reserves become increasingly scarce. (FT, Reuters)

Consumption and General Public Services :

Shares of Kraft Heinz (KHC) saw a notable uptick following reports that the food giant is considering a significant breakup. This potential move could essentially unwind the massive 2015 merger of Kraft and Heinz, a deal orchestrated by Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital. The company may be looking to spin off parts of its grocery business. This news comes as Kraft Heinz has faced a challenging year, with its stock hitting a low of $25 per share at the beginning of the month. (WSJ)

Financial Services :

In July 2025, BBVA’s (BBVA) takeover bid for Sabadell (SAB) faced growing political and regulatory hurdles. The EU formally challenged Spain’s interference, warning it could breach EU merger rules. In response, Sabadell increased shareholder returns to strengthen its position and fend off BBVA’s advances. Despite pressure from BBVA and European authorities, Spain’s government remained cautious about allowing the deal. (Reuters, WSJ)

Healthcare :

Novo Nordisk’s (NVO) new CEO took over in July amid investor concerns about slowing U.S. sales of its obesity drug Wegovy. The company reported strong Q2 results, driven by diabetes drug Ozempic, but flagged increasing competition and limited Wegovy insurance coverage in the U.S. Investors questioned the firm’s heavy reliance on obesity drug growth. (Reuters, WSJ)

Industrials : 

Union Pacific (UNP) announced an $85 billion acquisition of Norfolk Southern (NSC), aiming to create the first coast-to-coast freight rail network in the U.S., spanning 50’000 miles across 43 states. The merger would streamline operations by eliminating inter-railroad transfers and opening new routes. However, the deal would concentrate about 40% of U.S. rail freight under one company, prompting concerns over reduced competition and potential intense regulatory oversight. (WSJ, Reuters)

Technology and Network Equipments :

As part of its escalating commitment to artificial intelligence, Meta (META) has appointed Shengjia Zhao, co-creator of OpenAI’s ChatGPT, as Chief Scientist of its newly formed Meta Superintelligence Labs. Zhao will report directly to CEO Mark Zuckerberg and work closely with Meta’s Chief AI Officer, Alexandr Wang, to lead AI research and oversee the lab’s strategic direction. This strategic announcement was complemented by Meta’s strong second-quarter earnings report, released on July 30. The company posted revenue of $47.52B, marking a 22% YoY increase, and net income of $18.34B, up approximately 36%. Earnings per share came in at $7.14, significantly beating Wall Street expectations of around $5.88. These results sent Meta’s stock up by more than 11%. (Reuters, TOI)

The stock of the month:

American Eagle Outfitters (AEO) became a trending stock this July, driven by a surge in brand visibility after launching its largest-ever fall campaign headlined by actress Sydney Sweeney. The "Sydney Sweeney Has Great Jeans" campaign ignited social media, fueling significant stock momentum and turning AEO into a "meme stock." This celebrity-fueled rally highlights the massive impact a high-profile ambassador can have on market sentiment, embraced by an “anti-woke” culture. The stock jumped nearly 18% for the month. (WSJ)

Key performances 

Name	As of July 31	Monthly change	YTD
S&P500	6339.39	2.17%	7.78%
Dow Jones	44130.98	0.08%	3.73%
NASDAQ	21122.45	3.70%	9.38%
FTSE100	9132.81	4.24%	10.57%
CAC40	7771.97	1.38%	5.12%
DAX	24065.47	0.65%	20.18%
SMI20	11836.00	-0.72%	1.82%
MSCI WORLD	4073.84	1.09%	10.46%
VIX	16.72	-0.06%	-3.63%
CHF/USD	1.2301	-2.48%	11.11%
CHF/EUR	1.0771	0.86%	1.25%
Brent $/bbl	71.81	6.21%	-3.47%
Gold Spot $/oz	3342.30	1.45%	28.25%

Upcoming events

August 7 Bank of England (BoE) Interest Rate Decision

aug 27 : Nvidia Earnings

Written by Hippolyte Metzger-Otthoffer, Amaury Chartier, Elia König and João Vieira