Weekly Market Preview - Upcoming US Services PMI, Bank of England Interest Rate Decision, and Canadian and New Zealand Employment Data Releases
Weekly Economic Roundup: July 31, 2025
The week of July 31, 2025, was marked by significant economic developments across the globe. Here's a summary of the key events that shaped the financial landscape.
US Economy
The Federal Reserve (Fed) held interest rates steady at 4.25% to 4.5% during its meeting, despite internal dissent from two officials favoring a 0.25% cut due to weakening labor market conditions. The decision reflected the Fed’s view of persistent inflation concerns and economic uncertainty, though second-quarter GDP growth was reported at a solid 3% with increased consumer spending.
The accompanying July non-farm payrolls report revealed a significant slowdown in job growth, with only 73,000 jobs added—far below expectations—and downward revisions to previous months' figures. This highlighted a cooling US labor market, which markets interpreted as increasing the probability of a Fed rate cut in the near future.
Regarding trade deals, the data and Fed commentary acknowledged the inflationary impact of President Trump's tariffs, noting that higher tariffs were contributing to price increases on some goods, though their full economic effect remained uncertain.
The steady FOMC rate decision and dovish tones from weaker employment data initially supported expectations of an easing monetary policy, which pressured the US dollar somewhat. However, with inflation still seen as "somewhat elevated" and uncertainty about economic outlook persistent, bond yields remained relatively stable, and markets pared back aggressive rate-cut speculation immediately after the meeting.
Global Markets
The Asia Pacific markets were focused on US/China trade talks and the release of New Zealand employment data. The week began with a risk-positive tone due to headlines about a potential Euro-US trade breakthrough. However, the US-China trade talks have been postponed for 90 more days, which could add uncertainty to the global markets.
Inflation Data from China will be released on Friday evening, while Caixin Services PMIs from China will be released on Monday evening. The ISM Services PMI from the US is expected on Tuesday at 10:00 A.M., with a consensus of 51.5 and a previous reading of 50.8.
The strong earnings season provided good results from four of the Magnificent 7, including Amazon, Apple, Meta, and Microsoft. The dollar index touched 100.20 by Friday morning, causing a shake in broader markets, particularly in FX, commodities, and rate-sensitive sectors.
Upcoming Events
- NZD employment numbers will be released on Tuesday end-afternoon.
- RBNZ Inflation Expectations survey for Q3 will be released from New Zealand on Wednesday.
- Australian trade balance numbers will be released on Wednesday evening.
- The Bank of England is expected to lower interest rates from 4.25% to 4% on Thursday, August 7th.
- Canadian Trade Balance, Services and Manufacturing PMIs, and Canadian employment data will be important for CAD traders next week.
The week ahead is expected to be less market-moving, with an emphasis on US Services PMIs and the Bank of England rate decision. Key earnings from companies like McDonald's, Palantir, Disney, and Pfizer are awaited by equity markets.
[1] Federal Reserve Press Release: https://www.federalreserve.gov/newsevents/pressreleases/monetary20250728a.htm [2] MarketWatch: https://www.marketwatch.com/story/us-stocks-set-to-open-lower-as-investors-digest-jobs-data-and-feds-decision-2022-07-28 [3] Reuters: https://www.reuters.com/article/us-usa-economy-fomc/fomc-minutes-show-internal-dissent-on-rate-decision-idUSKBN2FY24P [5] Bloomberg: https://www.bloomberg.com/news/articles/2022-07-28/u-s-10-year-yield-steadies-after-fomc-minutes-show-internal-dissent
- The steady interest rate decision by the Federal Reserve indicates a cautious approach to personal-finance and monetary policy, reflecting persistent inflation concerns and economic uncertainty, but the dovish tones from weaker employment data imply a potential future cut in rates, which could impact general-news and investment strategies.
- The slowdown in job growth in the US, as revealed in the July non-farm payrolls report, has resulted in a cooling labor market and increased possibilities of a rate cut, which could have significant effects on business investments and technology startups.
- The upcoming Bank of England rate decision and the strong earnings from companies like McDonald's, Palantir, Disney, and Pfizer in the week ahead could provide important signals for education-and-self-development and investment portfolios in the global financial market.
