Although last week was relatively calm in terms of market volatility, it was far from a “summer lull.” Ahead lies the potential implementation of steep mutual tariffs on August 1st, along with renewed focus on a possible trade deal between the U.S. and China. Additionally, the Federal Reserve will announce its interest rate decision, and major U.S. tech corporations are set to report earnings. Let’s not forget a key macroeconomic report: U.S. labor market data. As a result, this coming week will be crucial for markets such as EURUSD, US100, and GOLD.
EURUSD
The world’s most important currency pair is holding at high levels in the 1.17–1.18 range. However, several risk factors for the U.S. dollar have recently diminished. Donald Trump signaled that there’s no need to dismiss the Fed Chair, and Scott Bessent stated that the name of the new Fed chair will be announced in December or January—easing fears of a “dual power” struggle at the Federal Reserve. Moreover, U.S. economic data looks solid, although the real test comes Wednesday with the release of the first U.S. GDP reading. On the same day, near the close of Wall Street, the Fed will announce its monetary policy decision, followed by Friday’s labor market data. If the numbers are strong, the dollar may begin recovering its losses from earlier this year. Eurozone GDP data is also due on Wednesday.
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We’ve seen strong earnings from Alphabet and rather weak results from Tesla. Now, most of the so-called Mag7 companies are set to report. On Wednesday, after Wall Street closes, Microsoft and Meta will release their earnings. On Thursday, it will be Amazon and Apple. Apple may attract the most attention due to its struggles with AI adoption and weak stock performance. Notably, the US100 (based on the Nasdaq 100 index) is trading at all-time highs, meaning strong results from tech companies are essential to sustain the recent bull market.
GOLD
The trade war remains in focus for investors, although sentiment seems surprisingly calm given the risk. Gold nearly reached all-time highs, but improving sentiment has led to a sharp pullback. Two key dates matter for the trade conflict in the coming week. On Monday, U.S. Treasury Secretary Scott Bessent will meet with his Chinese counterpart in Stockholm for the third round of trade talks—just ahead of the planned implementation of new mutual tariffs on August 1st. The U.S. currently has only a few trade agreements in place, and still lacks a key deal with Europe. If the risk of a full-blown trade war with retaliatory actions escalates, gold may find an opportunity to once again test or surpass its historical highs.
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