Monthly Market Outlook: The 3 Major Themes Defining Q3 2025

Here's how I'm framing the macro picture for Q3 2025 — the three themes I think will define most major market moves: **Theme 1: The Fed Pivot Timing** Markets have been oscillating between "one cut in 2025" and "two cuts in 2025" all year. The September meeting is the next real decision point. If PCE data in July shows meaningful progress toward 2%, expect significant USD weakness and risk-on rotation in August–September. **Theme 2: China Stimulus vs Deflation** China is facing genuine deflationary pressures. Significant stimulus could revive global growth expectations and boost commodity currencies (AUD, NZD) and base metals. **Theme 3: Global Liquidity Cycle** Global M2 money supply has been expanding since late 2023. This is historically bullish for risk assets including equities and crypto. The question is whether inflation prevents central banks from sustaining the expansion. **Trading positioning for Q3:** - Bullish: EUR/USD and gold IF the Fed pivots on schedule - Neutral: US equities — earnings strong but macro headwinds increasing - Watchful: AUD/USD — China stimulus = breakout; no stimulus = continued range How are you positioning your portfolio for Q3 2025?