Weekly market commentary

Market review

The week saw many changes of personnel across the globe highlighting the political fragility across countries. France entered another phase of turbulence following the resignation of Prime Minister François Bayrou, who lost a parliamentary confidence vote amid backlash over proposed austerity measures. His replacement, Sébastien Lecornu, faced immediate unrest as tens of thousands of protesters launched the “Block Everything” movement on his first day in office. The protests highlighted the deepening frustration with President Macron’s leadership and France’s ongoing political instability. Markets reacted negatively with investors demanding higher compensation to hold French government bonds. Yields in France rose by 5 basis points and are now almost the same as Italy, which markets punished in 2011 after the Euro debt crisis, demonstrating the discomfort investors have with French fiscal reform. Meanwhile in the UK, the Deputy Prime Minister resigned after an ethics investigation into underpaid tax. Her departure triggered a major cabinet reshuffle by Prime Minister Keir Starmer, but markets barely reacted to the news, as the Chancellor, (who wasn’t affected by the reshuffle), has pledged to adhere to fiscal rules. Markets however, continue to watch closely to see whether the government tries to change or flex the rules to help boost their poor polling.

Scrutiny of the Bureau of Labor Statistics (BLS) in America was intense this week, especially following President Trump’s dismissal of Commissioner Erika McEntarfer over alleged data manipulation. Markets have now priced a 100% chance that a recent downward revision to the number of employed by 911,000 will prompt the Federal Reserve to cut interest rates at its next meeting, to support a slowing labour market. The planned cut also follows inflation that came in line with forecasts showing that core inflation rose by 0.3% month-on-month as it did in July. The ECB kept rates on hold this week, deeming inflationary pressure contained and potential risks of economic shocks abating. In tariff news, Mexico finally relented to US pressure and led them to impose as much as 50% tariffs on cars and other Chinese products, the pressure from the White House is being felt across allied nations, but Mexico is amongst the first to directly align itself with US trade policy.

In equities Oracle surged 36% in a single session, after announcing a massive 359% year-over-year increase in contracted cloud revenue, positioning itself as a frontrunner in AI infrastructure. Analysts significantly raised their price targets, citing Oracle’s multibillion-dollar deals and long-term growth trajectory. 

Outlook

Markets remain reactive to a mix of economic and geopolitical signals, with recent moves reflecting uncertainty around inflation, growth, and policy direction. While corporate earnings have held up in many regions, investor sentiment has become more cautious. As inflation trends diverge and labour markets evolve, central banks may take increasingly different paths—raising the potential for greater dispersion across asset classes and regions in the period ahead. 

Movers table