STA Blog

Earlier this week, members of a technical analysis society gathered alongside guests from several industry associations for a mid-year market event. The evening was packed with data-driven insights, candid reflections on forecasts gone right (and wrong), and sharp debate about what the rest of 2025 might hold. Here are some of the key highlights. Please note that these are personal views only.

Inflation: Where We’ve Been and Where We’re Going

The event began with an honest assessment of previous forecasts on inflation across the US, Eurozone, and UK. The big takeaway?

• US & Eurozone: Inflation turned out to be a bit stickier than markets expected but largely aligned with earlier projections. However, the US remains tricky terrain for the Federal Reserve, with inflation still hovering around 2.7%—hardly making it easy to justify rate cuts under political pressure.

• UK: CPI proved far more stubborn. After underestimating the sharp April-May pickup (due partly to Easter effects), the view shared was for UK inflation to hover near 4% short-term, but ease to near-target levels by the end of 2026.
Looking ahead, the consensus is now heavily short on the dollar—so contrarians might consider a short-term dollar rally possible, even if the long-term fundamentals (like the US fiscal position) remain concerning.

Oil & Petrochemicals: Demand Wobbles and Supply Surges

A deep dive into oil fundamentals, especially around feedstocks, revealed that:

• Demand growth is under pressure, largely due to tariffs and weakened industrial activity, with key impacts on diesel and petrochemical feedstocks.

• OPEC strategy is shifting. After years of defending price through cuts, OPEC is now regaining market share even at the cost of lower prices. Meanwhile, US shale output continues to climb.

The result? A heavy surplus. Stocks have built by over 200 million barrels so far this year, with commercial inventories rising sharply. Crude is expected to hold in the $70 range near term but could pull back to the mid-$50s by early next year.
Geopolitical risks—like potential disruptions in the Strait of Hormuz—could still deliver short, sharp price spikes. But such moves would likely prove temporary as coordinated stock releases step in.

A Broader Investment Lens: Equities, Crypto & Commodities

The discussion then revisited some January forecasts:

• Equities & AI: Positions in AI-centric stocks delivered handsomely. Even after a sharp sell-off in April (triggered by new tariffs), equity markets snapped back—marking one of the fastest recoveries in market history. A bullish stance remains, with targets putting the S&P 500 around 6,550 by year-end.
• Crypto boom: 2025 is shaping up as the “year of crypto.” Bitcoin ETFs have seen massive inflows, and Bitcoin itself is up nearly 16% year-to-date (and around 91% over the past year), with technical targets eyeing $118K.
• Gold & Currency: Central banks—especially in Asia—are driving sustained gold demand, pushing it to all-time highs in USD and GBP. On currencies, earlier dollar weakness expectations have been challenged, with the market now very one-sided short USD, hinting at potential rebounds.
• Broader commodities: Beyond oil and gold, copper was flagged as a medium-to-long term standout, underpinned by electrification and infrastructure demand. Rare earths and uranium were also highlighted as areas to watch, alongside emerging market opportunities.

Key Risks & Contrarian Angles

Plenty of lively questions arose, from China’s recovery prospects to the reliability of official UK statistics. Cycles (like the oft-cited “Gann cycle” predicting 2024 trouble) were debated, with a general sense that new forces—AI, digital assets, algorithmic flows—are reshaping old playbooks.

Final Thoughts

Mid-2025 finds markets wrestling with contradictory forces: stubborn inflation vs. softening demand, surging tech valuations vs. fragile global growth. The collective takeaway was that opportunities remain—especially in tech, EM equities, gold, crypto, and selected commodities—but with volatility all but guaranteed. Position sizing, diversification, and keeping a close eye on geopolitics were repeated themes.
As ever, whether chasing cycles, yield curves or the next AI breakout, keeping an honest scorecard of forecasts is essential. If the evening proved anything, it’s that humility—and flexibility—remain two of the best tools any investor can have.