USA

Commentary: The U.S. economic growth remained resilient but continued to moderate. Consumer spending stayed the main driver of activity, although elevated borrowing costs and persistent price pressures continued to weigh on sentiment. The labour market softened further, with payroll growth slowing sharply in June while the unemployment rate held broadly steady at 4.2%, reinforcing a "low hire" environment. Inflation pressures showed tentative signs of easing as lower gasoline prices helped cool headline inflation in June, though underlying price pressures remained sticky and renewed tensions in the Middle East have kept oil markets volatile, complicating the outlook for Fed Chair Kevin Warsh. Markets remained well positive but highly sensitive to geopolitical developments and their implications for inflation and the path of monetary policy.

Europe & UK

Commentary: The euro area economy remained subdued, with growth continuing at a modest pace across the major member states despite signs of a slight improvement in activity toward the end of the second quarter. Inflation eased in June, with annual HICP declining to 2.8% from 3.2% in May as energy inflation moderated, although underlying price pressures remained elevated. Following its 25 basis point rate increase in June, the ECB maintained a cautious, data-dependent stance, warning that renewed Middle East tensions and higher energy prices could keep inflation above target for longer while weighing on already fragile growth. Equity markets remained broadly resilient despite heightened volatility, as investors balanced easing headline inflation against expectations of further policy tightening and persistent geopolitical risks. The Eurostoxx 50 is up by 8.3% YTD. 

Malta

Commentary: Malta continued to outperform most euro area economies, with the latest indicators pointing to solid economic momentum supported by resilient domestic demand, robust tourism activity and a strong property market. The Central Bank of Malta's June Economic Update noted that business conditions remained above their long-term average, while consumer sentiment improved despite a more uncertain external environment. Financial stability remained resilient, although authorities continued to highlight elevated global geopolitical and economic risks. Inflation remained broadly contained, helped by government energy support measures, while the labour market continued to be tight. The MALTEX is now up by more than 9% year-to-date.