HFMarkets (hfm.com): Market analysis services.

[AllForexnews]

[b]Date: 28th July 2025.[/b]

 

[b]Markets Rally as US-EU Tariff Deal Calms Trade War Fears.[/b]

 

Financial markets and policymakers are cautiously optimistic that the feared economic fallout from Liberation Day may not fully materialise. Expectations of weak growth and surging inflation have started to ease, while optimism is building that trade tensions may be less damaging than anticipated. However, uncertainty remains elevated, with the August 1 tariff deadline fast approaching.

 

Although we’re not out of the woods yet, recent developments suggest the path forward could be less volatile. The range of potential tariff outcomes has narrowed, and active trade negotiations are gradually clearing the fog. Still, the global economy continues to navigate a ‘wait-and-see’ landscape, and this week’s calendar is packed with central bank meetings, critical data releases, earnings reports, and bond supply that will shape investor sentiment.

 

US-EU Trade Agreement: A Fragile Truce

Over the weekend, the United States and the European Union struck a much-anticipated trade deal, agreeing to implement a 15% levy on a wide range of European exports, including autos. The outcome aligns closely with previous warnings from Brussels, offering a sense of relief that the standoff did not escalate further.

 

The EU had prepared countermeasures that may have targeted US services—an area where the US runs a strong surplus with the bloc—but those plans came too late to influence the negotiations. Critics argue that Brussels should have taken a firmer approach earlier in the process. However, in the end, EU officials prioritised swift resolution and market stability, which now appears to have been the right call—equity markets surged to four-month highs following the announcement.

 

As part of the agreement, the EU also pledged to purchase $750 billion in US energy products—a bold commitment considering the region’s recent pivot away from Russian gas toward US LNG. The bloc also committed to buying more US military equipment, in line with recent arms support agreements for Ukraine and NATO cooperation. Bloomberg Economics estimates that the new deal prevents the average effective US tariff rate from rising to 18%, keeping it at a more manageable 16%.

 

 

 

 

 

Market Reaction: Risk Appetite Improves

Equity markets responded positively to the news. The Euro Stoxx 50 posted a 0.6% gain, while the DAX lagged slightly but still closed higher. Southern European indices like the MIB and IBEX led the region’s rally. US futures also pointed higher, buoyed by the improved trade outlook.

 

In Asia, Chinese stocks ended the day in the green, reflecting hopes that Washington and Beijing will extend their current trade truce. The Nikkei, however, slipped more than 1%, and the UK’s FTSE 100 edged down by 0.1%. In bond markets, eurozone yields declined as investors digested cautious commentary from ECB officials, while US Treasury yields ticked higher, with the 10-year rate approaching 4.40%.

 

FX Markets: Dollar Gains on Trade Optimism

Currency markets reflected the surge in risk appetite and the recalibration of rate expectations. The US dollar gained 0.6% intraday, with the DXY index trading near 98.26. The euro weakened against the greenback, dropping 0.8% to 1.166, a move likely welcomed by European exporters and policymakers, as a softer currency helps offset some of the tariff impact.

 

 

 

 

 

Sterling outperformed earlier in the session but later pulled back, with GBPUSD correcting to 1.34. Meanwhile, the dollar gained ground against the franc and yen, rising 0.8% versus the Swiss franc and 0.5% against the yen, bringing USDJPY to 148.39.

 

Commodities: Oil Climbs, Gold Eases

Oil prices moved higher in tandem with stocks, as the trade agreement boosted global demand expectations. WTI rose 1.3% to $66.01 per barrel, while Brent gained 1.2% to $69.28. Investors now await further developments in US-China talks scheduled later today, with hopes that both sides will agree to extend their current truce.

 

Gold prices were largely steady after a pre-weekend dip driven by stronger dollar sentiment and fading rate-cut bets. With the tariff deal confirmed and markets adjusting to tighter policy guidance, gold slipped modestly to $3,336.21 per ounce. Silver and copper also posted minor declines, down 0.15% and 0.28%, respectively. Copper prices, however, remain elevated ahead of a planned 50% tariff on US copper imports, set to take effect August 1.

 

ECB Stays on Hold, Keeps Options Open

The European Central Bank kept interest rates steady, with President Lagarde signalling that policymakers will retain flexibility ahead of the September meeting. While inflation fears have receded slightly, Lagarde made it clear that rate cuts are not guaranteed and that future decisions will depend heavily on incoming economic data and geopolitical developments.

 

Her message was echoed by ECB Governing Council member Peter Kazimir, who warned against assuming a rate cut is imminent. He emphasised that only clear signs of labour market weakness would justify further easing. While recent inflation data is reassuring, Kazimir stressed the importance of vigilance, particularly in light of potential supply chain disruptions that could reignite price pressures.

 

Outlook: Trade Relief Is Welcome, But Uncertainty Persists

The US-EU trade agreement has provided temporary relief to markets, reducing tariff risks and boosting investor sentiment. Yet the broader picture remains uncertain. The August 1 deadline still looms, geopolitical tensions persist, and monetary policy paths are far from settled.

 

As the global economy enters a critical phase, traders and investors will continue to monitor developments in trade policy, central bank decisions, and macroeconomic data. For now, markets are breathing a little easier—but the long-term trajectory is still unfolding.

 

[b]Always trade with strict risk management. Your capital is the single most important aspect of your trading business.[/b]

 

[b]Please note that times displayed based on local time zone and are from time of writing this report.[/b]

 

Click [url=https://www.hfm.com/hf/en/trading-tools/economic-calendar.html][b]HERE[/b][/url] to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click [url=https://www.hfm.com/en/trading-tools/trading-webinars.html][b]HERE[/b][/url] to register for FREE!

 

[url=https://analysis.hfm.com/][b]Click HERE to READ more Market news.[/b][/url]

 

[b]Andria Pichidi

HFMarkets[/b]

 

[b]Disclaimer:[/b] This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[AllForexnews]

[b]Date: 29th July 2025.[/b]

 

[b]All Eyes on the US: FOMC, Jobs Report, Earnings and Treasury Supply Dominate a Pivotal Week.[/b]

 

It’s shaping up to be one of the busiest weeks of the year for US markets, with virtually every major catalyst on the docket. From the FOMC decision and the July employment report to Treasury borrowing forecasts, corporate earnings, and key economic data releases, traders face a flood of information that could significantly sway bonds, equities, and the US dollar.

 

Yet, with so many variables in play, clarity may remain elusive. The overlapping crosscurrents could result in choppy and indecisive trading as investors attempt to digest the implications for monetary policy, growth, and inflation expectations heading into the final months of 2025.

 

Fed Expected to Hold Steady, But Watch for Dissent

The Federal Open Market Committee meets Tuesday and Wednesday, and the consensus is firmly aligned around a pause in interest rates. Policymakers have consistently characterised the US economy as resilient and the labour market as solid—two factors that continue to justify patience on rate adjustments.

 

However, inflation has cooled further in recent months, and concerns over slowing global demand and one-time tariff impacts have emboldened some officials. Notably, Governors Christopher Waller and Michelle Bowman have expressed dovish leanings, calling for a rate cut at this meeting—a position that puts them at odds with the broader committee.

 

While FOMC dissents from governors are rare, both Waller and Bowman have already defied consensus in recent decisions. Waller previously opposed the decision to slow quantitative tightening, and Bowman dissented in September 2024, favouring a smaller 25 bp cut instead of the 50 bp move that was implemented. If both break ranks again this week, it would mark the first dual governor dissent since 1993, underscoring the growing debate within the Fed.

 

Chair Powell’s press conference on Wednesday will be closely watched for signals on whether the central bank is preparing to shift its tone ahead of the next meeting in September. Markets are already pricing in a near 50/50 chance of a rate cut that month.

 

July Jobs Report in Focus as Labour Market Remains Resilient

The July nonfarm payrolls report, due Friday, will be a crucial input into the Fed’s September decision. Expectations point to a 120,000 job increase, a modest gain compared to previous months but still indicative of a labour market that is not deteriorating rapidly.

 

Private payrolls are projected to rise by 100,000 after a 74,000 gain in June, while factory jobs are expected to hold flat following a 7,000 loss. The unemployment rate is forecast to tick up to 4.2% from 4.1%, as the labour market adjusts to sector-specific layoffs and restructuring—particularly from companies undergoing so-called DOGE cuts, where severance packages have delayed the appearance of actual unemployment.

 

Wage growth is likely to continue at a moderate pace. Average hourly earnings are projected to rise 0.3% month-over-month, with the annual rate ticking up slightly to 3.8% from 3.7%. The average workweek is expected to remain at 34.2 hours for a second straight month.

 

With another jobs report due before the September 16–17 FOMC meeting, the Fed will be watching closely to determine whether inflation remains subdued and whether labour market softness justifies a preemptive rate cut to stay ahead of a potential economic slowdown.

 

Markets Price in Fall Rate Cuts

Despite the expected hold this week, Fed funds futures are leaning toward a September rate cut. The October contract implies roughly 27 basis points of easing, while the December contract reflects nearly 44 bps in total cuts by year-end.

 

That positioning underscores investor sensitivity to Powell’s tone on Wednesday. Any signs of softening—whether in the statement, the vote tally, or during the press conference—could fuel expectations for more aggressive easing later this year.

 

Although the Fed has been cautious not to overcommit, the combination of slowing inflation, moderating wage growth, and global uncertainties is making the case for flexibility stronger. Powell may not open the door wide to cuts just yet, but even a small rhetorical shift could move markets.

 

Other Key Catalysts: GDP, ISM, PCE, and Big Tech Earnings

In addition to the Fed and labour market data, traders must also navigate a wave of critical releases. The second-quarter Advance GDP print, Employment Cost Index (ECI), PCE chain prices, and the ISM manufacturing report all offer insight into the strength of the US economy and inflation dynamics.

 

Meanwhile, the Treasury Department is set to release Q3 and Q4 borrowing estimates, as well as details of the August refunding schedule—an event that could influence bond yields and market liquidity.

 

On the corporate front, earnings season continues in full swing, with Apple, Amazon, Meta, and Microsoft among the headline names reporting this week. The results from Big Tech could add volatility, especially if they reveal caution on consumer trends or AI-related capex.

 

Conclusion: A Pivotal Week for the Fed and Financial Markets

With the FOMC meeting, labour data, inflation indicators, Treasury supply, and earnings all on the calendar, this week could shape market direction for weeks to come. The Fed is expected to hold, but the potential for rare dovish dissents adds an element of intrigue.

 

As the data rolls, and Powell addresses the press, traders will be seeking any clue on whether a September rate cut is truly on the table. Until then, expect volatility, uncertainty, and plenty of positioning as markets attempt to digest a whirlwind of economic signals.

 

[b]Always trade with strict risk management. Your capital is the single most important aspect of your trading business.[/b]

 

[b]Please note that times displayed based on local time zone and are from time of writing this report.[/b]

 

Click [url=https://www.hfm.com/hf/en/trading-tools/economic-calendar.html][b]HERE[/b][/url] to access the full HFM Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click [url=https://www.hfm.com/en/trading-tools/trading-webinars.html][b]HERE[/b][/url] to register for FREE!

 

[url=https://analysis.hfm.com/][b]Click HERE to READ more Market news.[/b][/url]

 

[b]Andria Pichidi

HFMarkets[/b]

 

[b]Disclaimer:[/b] This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.