Markets Recap
27 August 2025
Fed Chair Jerome Powell signalled concerns over labor market risks and opened the door for a rate cut in September. Markets are expecting easing rates with Futures now pricing-in a 25bp cut. Later in the week. in an unprecedented move, President Trump dismissed Fed Governor Lisa Cook over mortgage-related allegations. Cook rejected the firing, filing a lawsuit, raising serious institutional and legal questions. The situation still is ongoing.
Japanâs TOPIX is up 34% since April in a âninja rallyâ, driven by fund rotation out of US and China, hopes of a corporate reform in Japanâs boardrooms, and a US-Japan trade deal that eased tariff fears. The rally was mainly driven by foreign investors, who put $35.7 billion into the stock market this year, mostly after âliberation dayâ. In addition, Japanâs expansion of a tax-protected investment scheme last year increased consumption by households, further supporting the rise in domestic stocks, with Japanese households holding more than $14 trillion in financial assets, though half was in cash or deposits.
Andrew Bailey (BOE) warned UK faces âacute challengeâ with weak productivity and low labor participation. He emphasised the need to raise productivity growth, since ageing is a major issue, with estimates that 40% of the UK population being older than 64 by 2040. Data shows that the percentage of 16-64 year olds active in the labour market is lower than before the Covid-19 pandemic, with mental health being the most common reason for inactivity, a point he described as âa very concerning developmentâ.
In Brazil, BNDES announced a R$10 billion ($1.85 billion) credit line to help companies affected by steep US tariffs, complementing the R$30 billion package unveiled earlier this month aimed at exporters impacted by the 50% tariffs imposed by the US President Donald Trump on several Brazilian goods.
In Norway, Labour leads the upcoming election next week, but coalition dynamics could shift control and reshape the policy outlook for Europeâs largest gas exporter. At $2 trillion, the worldâs largest sovereign wealth fund is under scrutiny for restrictions on defence investments. Opposition leader Erna Solberg wants a rethink, which could shift fund strategy. Furthermore, as Europeâs #1 gas supplier, Norwayâs fiscal and tax policy on oil & gas is central. Any shift in exploration policy or taxation could ripple through European energy markets. Investors are watching for changes to fund investment rules and energy taxation, both of which influence energy equities and sovereign flows.
In the IPO market, cybersecurity "unicorn" Netskope provides cloud-based security software. While revenues jumped 33% in H1 2025, itâs operating at a loss of $169.5 million, as is true for much of the tech sector. In India, as SEBI considers reducing regulations for large companies to IPO, NSE (the exchange operator) is eyeing a market debut next year at a valuation of more than $50 billion.
Sources: Axios, Bloomberg, CNBC, Economic Times, Financial Times, Reuters, Yahoo Finance
