Global and Luxembourgish News 04.-11. August 2025
Week 32: This week brought renewed uncertainty in U.S. markets from cooling hiring to rising productivity and persistent claims. Meanwhile, Luxembourg proved its resilience, climbing competitiveness rankings and rebounding fund assets. Let’s break it down.
Credit jitter warns of fragility ahead for high-flying equities
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Investors are growing cautious in the corporate credit market as spreads approach near-record lows, signalling risky optimism in equity valuations. Asset managers such as Fidelity International have shifted to a defensive stance, zero exposure to cash bonds, actively shorting high-yield credit to hedge against potential defaults. Analysts warn that current credit pricing reflects growth expectations of around 5%, significantly higher than the IMF’s 3% forecast. Sharp corrections in credit markets often presage broader equity market declines.
Source: Reuters
Productivity rebounds even as jobless claims linger
Picture: Bilyonario News Channel
U.S. nonfarm productivity grew by 2.4 percent in Q2, following a 1.8 percent decline in Q1. Meanwhile, continuing jobless claims climbed to around 1.94 million, reflecting a slowdown in hiring. The productivity boost offers a silver lining, suggesting firms are becoming more efficient, possibly through increased automation. However, elevated claims underscore persistent labor market fragility.
Source: Reuters
Gold surges nearly 2 percent as markets eye Fed softness
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In response to the weak jobs report, gold prices jumped nearly 2 percent, hitting their highest level since July 25. Investors recalibrated toward rate cut expectations, with futures suggesting two cuts by year end. Tariff pressures and global uncertainty added to gold’s safe haven appeal. Analysts say this rally reflects growing concerns about growth even as inflation risks linger.
Source: Reuters
Luxembourgish News August 2025
Luxembourg returns to global top 20 competitiveness ranking
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According to the 2025 IMD World Competitiveness Ranking, Luxembourg reentered the global top 20, rising three places from last year. It scored strongest in government efficiency, ranked 14th, and also rated highly in business efficiency and infrastructure. The rebound signals strong resilience in a turbulent global economy, highlighting effective policy and structural adaptability.
Source: Luxembourg Trade and Invest
Luxembourg investment fund assets rebound in July
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After three consecutive months of declines, Luxembourg’s investment fund industry recorded a 1.4 percent increase in total assets under management in July, reaching €5.38 trillion. The rebound was driven by equity inflows and a modest recovery in global stock markets. Bond funds saw smaller gains, supported by easing inflation expectations. Industry leaders say the uptick reflects investor confidence returning, though geopolitical risks and tariff tensions remain headwinds.
Source: CSSF
