IGA Capital Weekly Markets Update

Joshua Hawley CEO

August 11th, 2025

Market Overview

Markets rallied at the close of last week, with technology stocks leading the way, pushing the Nasdaq Composite to a new all-time high of 21,450 on Friday. Investors continue to grapple with mixed economic data and the ongoing debate around the Federal Reserve's next steps on interest rates, with the latest economic data providing mixed signals.

U.S. equity markets advanced, rebounding from the previous week's sell-off. The Nasdaq Composite closed the week at a record high, largely driven by a series of strong corporate earnings reports, particularly from the AI and technology sectors¹. The economic data released this week was mixed, with the ISM services index declining to 50.1% in July, just barely above the threshold for growth, and initial jobless claims rising². However, the Atlanta Fed's "nowcast" for Q2 GDP was revised up, suggesting a stronger-than-expected economic picture³.

The market is pricing in a series of future rate cuts, with the implied policy rate projected to drop from its current level of 4.25% to 3.25% by July 29, 2026⁴. For the September 17, 2025 FOMC meeting, there is a 79.1% implied probability that the Fed Funds Rate will be in the 4.00-4.25% range⁵.

Commodities and Digital Assets

The gold market experienced a significant rally this week, with prices nearing the $3,400 per ounce mark⁶. The surge was attributed to increased safe-haven demand stemming from new U.S. tariffs on Indian goods and a weaker U.S. dollar⁷. The ongoing geopolitical uncertainty and a softening U.S. labor market are fueling speculation for a Federal Reserve rate cut in September⁸.

Bitcoin (BTC) surged past the $122,000 mark and is now approaching its all-time high⁹. The cryptocurrency posted a strong weekly gain of 5.41% as of August 11, 2025, fueled by strong inflows into crypto funds, expectations of future rate cuts from the Federal Reserve, and renewed institutional interest¹⁰.

Fixed Income and Sovereign Yields

The 10-year U.S. Treasury yield is currently at 4.26%¹¹. Other sovereign bond yields as of April 28, 2025, were: Canada at 3.38%, Germany at 2.68%, Japan at 1.48%, and Australia at 4.24%¹². The 2s/10s Treasury spread is at 0.51% and the 5s/30s spread is at 1.01% as of August 11, 2025¹³. The 1M Term SOFR is at 4.36% as of August 11, 2025¹⁴.

Inflation and Economic Data

Inflationary pressures show variation across different measures. The annualized Headline CPI is 2.70%, with the Core CPI at 2.90% for June 2025¹⁵. The U.S. Consumer Price Index (YoY) is 2.70%, while the United Kingdom is at 3.60% and the Eurozone is at 2.00%¹⁶. U.S. GDP (YoY) is 2.00%, with the unemployment rate at 4.20%¹⁷.

IGA Capital Perspective

The recent market volatility highlights the intricate balance between economic data and geopolitical events. While positive earnings reports and a rallying tech sector have buoyed stocks, the persistent inflationary pressures and central bank uncertainty demand a careful approach. Our perspective remains focused on navigating this complex environment where markets are anticipating future rate cuts. We will continue to monitor these developments to identify and capitalize on opportunities for our clients, particularly within the sectors of project finance and trade-linked funding, where our expertise is most valuable.

Footnotes and Disclosures:

Source: Bloomberg ¹⁸

Fed Funds Forecasts: Walker & Dunlop ¹⁹

Data on Fed Funds Rate Target Probabilities: CME Group ²⁰

Information on SOFR Interest Rate Caps: Chatham Financial ²

• Sources: T. Rowe Price ²², Charles Schwab ²³, The Times of India ²⁴, The Economic Times ²⁵, BullionVault ²⁶, eToro ²⁷

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