Introduction
Global financial markets delivered a subdued and uneven performance on July 4, 2025, as the U.S. Independence Day holiday shuttered American trading desks and left global investors to navigate light volumes and an uncertain macroeconomic landscape. With Wall Street closed, attention turned to Europe, Asia, and commodity flows, where muted activity was offset by renewed concerns over weak economic data from China and ongoing inflationary pressures across several major economies.
Investors balanced caution with positioning ahead of Friday’s key U.S. Nonfarm Payrolls report, which loomed large over markets despite the holiday break in the United States. Equity markets in Europe ended mixed, Asia saw modest gains in some pockets, and the dollar maintained a firm tone. Meanwhile, gold extended its recent climb, and crude oil prices remained range-bound despite signs of weakening demand.
This article explores the cross-continental trading dynamics of July 4, focusing on how global equities, currencies, bonds, and commodities responded in the absence of U.S. flows.
European Equities: Lackluster and Data-Driven
Equity markets across Europe finished the day with limited directional conviction. The pan-European Stoxx 600 ended flat, while Germany’s DAX fell 0.2% and France’s CAC 40 rose 0.1%. London’s FTSE 100 added 0.3%, supported by defensive consumer staples and utilities.
Economic data releases provided little support. Eurozone retail sales for May grew just 0.1% month-over-month, below forecasts of 0.3%, while German industrial orders contracted by 1.1%, their third consecutive monthly decline. These figures fueled concerns that the Eurozone recovery remains fragile, especially as the European Central Bank holds off on easing.
Banking stocks in Europe were broadly weaker, while energy and utilities showed modest gains. Volume was significantly lighter than average due to the U.S. holiday.
Asia-Pacific Markets: Chinese Data Disappoints
Asian equities closed mixed, with sentiment dampened by another batch of weak economic data from China. The Shanghai Composite lost 0.5% and the Hang Seng Index in Hong Kong fell 0.8%, weighed down by losses in technology and real estate shares.
China’s Caixin Services PMI for June came in at 50.1, barely in expansion territory and down from 51.7 in May. The slowdown in services echoed previous reports showing weak manufacturing and sluggish export demand, reinforcing deflationary fears.
Elsewhere in the region:
- Japan’s Nikkei 225 edged up 0.4%, buoyed by exporters on a weaker yen.
- South Korea’s Kospi gained 0.2% on strength in chip stocks.
- Australia’s ASX 200 rose 0.3%, supported by gains in mining and financials.
Currencies: Dollar Holds Steady in Quiet Trade
The U.S. dollar remained firm despite low liquidity, with the Dollar Index (DXY) holding at 105.62. The euro dipped slightly to 1.0652, and the British pound traded at 1.2583. The Japanese yen weakened to 160.74 per dollar, nearing intervention territory.
The lack of major economic releases or Fed commentary due to the holiday kept forex markets quiet, but investors were positioning cautiously ahead of Friday’s labor market data and potential signals for monetary easing.
Commodity-linked currencies such as the Australian and Canadian dollars were mostly unchanged, reflecting limited direction in oil and metals prices.
Commodities: Gold Shines, Oil Flat
Gold extended its rally, climbing 0.9% to close at $2,451 per ounce, buoyed by safe-haven demand and ongoing central bank buying. The metal continued to benefit from geopolitical uncertainty, strong institutional flows, and a broadly cautious investment climate.
Silver also moved higher, up 1.2% to $31.88 per ounce.
Crude Oil remained range-bound. Brent crude ended the day at $70.61 per barrel and WTI closed at $66.83. Prices were supported by ongoing geopolitical tensions in the Middle East, but upside was capped by weak demand signals and elevated inventories.
Traders noted that with U.S. participation absent, oil markets lacked the liquidity and volatility typically observed during active sessions.
Industrial metals were mixed, with copper up 0.3% to $4.36 per pound and aluminum down 0.2%, reflecting uneven signals from China’s industrial sector.
Bonds: Global Yields Drift
In the absence of U.S. Treasury trading, European bond yields drifted lower. Germany’s 10-year bund yield fell 2 basis points to 2.46%, while the U.K.’s 10-year gilt yield declined to 3.86%.
The soft tone reflected both weak European data and anticipation of dovish signals from the Fed following Friday’s employment report. Japanese government bond yields were unchanged at 0.89%, holding steady amid yen weakness and BOJ policy inertia.
Emerging market bonds were stable, with spreads unchanged on light volumes.
Market Positioning Ahead of U.S. Jobs Report
Despite thin volumes, global investors remained attentive to upcoming U.S. macro catalysts. Friday’s Nonfarm Payrolls report is expected to show job gains of 190,000, with unemployment holding at 4.0% and wage growth slowing to 0.3% month-over-month.
Market pricing continues to imply a roughly 60–65% probability of a Fed rate cut in September, depending on incoming labor and inflation data. A downside surprise in jobs could accelerate those expectations and trigger further risk-on activity.
Safe-haven flows into gold and sovereign bonds suggest positioning remains cautious, even as equity markets hold near record levels.
Conclusion
With the U.S. on holiday, global financial markets saw modest and directionless trade on July 4, 2025. European and Asian equities struggled for momentum amid weak data and geopolitical uncertainty, while gold and bonds attracted defensive flows.
Investors now await clarity from key macro indicators, beginning with the U.S. labor market report on July 5. Central banks remain data-dependent, and risk sentiment continues to hinge on whether inflation moderates further without triggering a sharp slowdown.
Looking ahead, markets will closely monitor:
- U.S. Nonfarm Payrolls (July 5) for confirmation of labor market cooling
- Fed Chair Powell’s July 10 remarks for policy clarity
- CPI and PPI readings (week of July 8) to assess inflation trajectories
In the meantime, the cautious positioning and mixed asset performance observed on July 4 offer a preview of what may lie ahead: a second half of 2025 marked by fragile growth, hesitant central banks, and elevated geopolitical risk.
