US CPI Takes Centre Stage After Weak NFP Shifts Fed Bets
Key Takeaways
-US payrolls fell by 23,000 in July, while the unemployment rate declined to 4.1% as labour-force participation slipped to 61.4%.
-The weaker jobs report reduced expectations for a September Fed rate hike, shifting market attention towards US inflation.
-A softer CPI reading could reinforce expectations for a Fed pause, while a stronger result could support the Dollar and weigh on Gold.
-USDX, Gold, EURUSD, GBPUSD, the S&P 500 and Bitcoin are entering the week at key technical levels.
-US CPI on 12 August is the main catalyst, with PPI and other economic data also likely to influence market positioning.
-The weaker jobs report reduced expectations for a September Fed rate hike, shifting market attention towards US inflation.
-A softer CPI reading could reinforce expectations for a Fed pause, while a stronger result could support the Dollar and weigh on Gold.
-USDX, Gold, EURUSD, GBPUSD, the S&P 500 and Bitcoin are entering the week at key technical levels.
-US CPI on 12 August is the main catalyst, with PPI and other economic data also likely to influence market positioning.
July payrolls unexpectedly declined, while previous figures were revised lower. Although the unemployment rate fell to 4.1%, the drop in labour-force participation points to a softer employment backdrop.
With rate-hike expectations already easing, Wednesday’s CPI report could become the next major catalyst for the Dollar, Gold and broader risk assets.
Why Traders Are Watching the Fed
The jobs report has shifted the balance of expectations ahead of the September Fed meeting.
A softer inflation reading could strengthen the case for keeping rates unchanged, while renewed price pressures could bring rate-hike expectations back into focus.
Key factors this week include:
-US CPI: The main test of whether inflation is continuing to moderate.
-US PPI: Further evidence of underlying price pressures.
-Fed Rate Expectations: Changes in September policy pricing could affect multiple asset classes.
-Treasury Yields: Movements in yields could influence the Dollar, Gold and equities.
-US PPI: Further evidence of underlying price pressures.
-Fed Rate Expectations: Changes in September policy pricing could affect multiple asset classes.
-Treasury Yields: Movements in yields could influence the Dollar, Gold and equities.
Key Movements of the Week
USDX
-USDX remains under pressure following the weaker NFP report.
-99.60 and 100.20 are key levels on a potential recovery.
-A break lower could bring 98.95 and 98.70 into focus.
-99.60 and 100.20 are key levels on a potential recovery.
-A break lower could bring 98.95 and 98.70 into focus.
EURUSD
-EURUSD is holding around 1.1585 as the softer US labour data weighs on the Dollar.
-A move below 1.1585 could expose 1.1525.
-A sustained recovery could target 1.1600 and 1.1635.
-A move below 1.1585 could expose 1.1525.
-A sustained recovery could target 1.1600 and 1.1635.
XAUUSD
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