The Global Markets Monitor is a daily IMF report covering major global financial and economic developments.
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• H1 2025 generally positive for global markets
• Bets on Fed rate cuts continue to rise
• Rising euro could test policymakers
• Strong interest in 10-year JGB auction boosts prospects for future demand
• Taiwan POC dollar surges as investors wrestle with dollar weakness
• EM Equity ETFs see strong inflows
• Special Feature: EM Local Currency Bond Monitor
Goldilocks and the Three Bears
The Goldilocks situation of rising equities, tighter credit spreads, lower interest rates, falling oil prices and a weaker dollar is likely to be tested in the days ahead as the July 9 US tariff deadline draws nearer, geopolitical risks continue to simmer and the global economy faces mounting challenges. The US administration threatened tariffs on Japanese cars and cited Japan’s unwillingness to accept US rice exports, according to Bloomberg. The EU is sending a team to Washington in a last ditch effort to negotiate a trade deal. Equities in Europe are down and US equity index futures are pointing to a negative open, while Treasury and bund yields are lower. News that Iran has cut ties to international atomic energy inspectors reminded market participants that the situation in the Middle East remains very dangerous. Meanwhile, policymakers in the euro area could face challenges due to the relentlessly appreciating euro, while signs of rising inflation are beginning to appear in various parts of the global economy.
