Last week, markets focused on the rising chance of a U.S. rate cut in September. U.S. CPI was weaker than expected, boosting hopes for a cut, while PPI was higher, showing the impact of tariffs on U.S. companies. Despite the mixed data, traders still expect a rate cut next month, helping drive U.S. and Japanese stocks to record highs.
The Reserve Bank of Australia cut rates as expected. In the U.K. and Japan, stronger GDP results lifted both the pound and yen. President Trump also signed an order extending the tariff truce with China for another 90 days, pushing the next key deadline to November 10, 2025, and avoiding an immediate escalation in trade tensions.
Oil prices fell ahead of the Trump–Putin summit where they will discuss ending the war in Ukraine, with markets watching closely for the outcome. Overall, risk sentiment improved as investors weighed trade uncertainty against central bank support and stronger global growth.
Markets This Week
U.S. Stocks
The Dow hit record highs last week, supported by growing expectations of a U.S. rate cut at the September meeting after weaker-than-expected CPI data. However, concerns remain over the negative impact of tariffs, with higher PPI showing the pressure on U.S. companies, and the market is waiting for more data to see the full effect. Overall, the Dow is expected to trade sideways to higher, making buying opportunities more attractive in the near term. Key resistance levels are at 45,000 and 46,000, while support is seen at 44,000, 43,000, and 42,000.
Japanese Stocks
Japanese stocks posted another week of strong gains, with the Nikkei 225 surging to record highs as optimism from the U.S. trade deal continued and momentum followed U.S. equities higher. The index is now up nearly 10% over the past month, so some consolidation is likely, making it better to wait for a pullback to the 10-day moving average before buying or selling in the short term. Key resistance levels are at 44,000円 and 45,000円, while support is seen at 42,000円, 41,500円, and 41,000円.
USD/JPY
The USD/JPY came under selling pressure last week as expectations of a U.S. interest rate cut encouraged selling, while stronger-than-expected Japanese GDP data raised the chances of a rate hike in Japan. The market looks balanced at current levels, so range trading remains the preferred strategy for now. Resistance is at 148, 149, and 150, while support is at 146 and 145.
Gold
Gold prices fell last week as profit-taking at the top of the recent range and record highs in equities reduced demand for the metal. This came despite U.S. rate cut expectations, which remain supportive for gold in the bigger picture. The market is expected to stay well supported at lower levels, creating potential buying opportunities in the week ahead. Resistance is at $3,400 and $3,450, while support is at $3,300, $3,250, and $3,200.
Crude Oil
WTI crude continued its recent downtrend, staying under pressure as bearish sentiment dominated. Prices were weighed down by OPEC+ production increases, weak Chinese economic data, and concerns that tariffs could further reduce demand. In addition, talks between Trump and Putin to end the war in Ukraine raised the risk of more Russian oil supply hitting the market, adding to downside pressure. Selling into strength remains the preferred strategy, with the 10-day moving average pointing lower. Resistance is seen at $65, $70, and $75, while support is at $60 and $55.
Bitcoin
Bitcoin hit record highs last week as traders continued to buy risk assets on expectations of lower U.S. interest rates. However, the market saw a sharp sell-off from the highs after comments from the U.S. Treasury Secretary confirmed there were no plans for further government Bitcoin purchases. A key reversal on Thursday, where the market made a new high but closed lower, along with a close below the 10-day moving average, could limit further upside in the short term. The preferred strategy is to buy on weakness and sell into strength. Resistance is at $120,000, $125,000, and $150,000, with support at $112,000, $110,000, and $105,000
This Week’s Focus
- Monday: E.U. Trade Balance
- Tuesday: U.S. Building Permits, U.S. Housing Starts
- Wednesday: Japan Trade Balance, U.K. CPI, E.U. CPI
- Thursday: U.S. FOMC Meeting Minutes, E.U. HCOB Eurozone Manufacturing PMI, U.K. S&P Global Manufacturing PMI, U.S. Initial Jobless Claims, U.S. S&P Global Manufacturing PMI, U.S. Existing Home Sales, U.S. US Leading Index
- Friday: Japan National Core CPI, U.K. Retail Sales, Germany GDP, U.S. Fed Chair Powell Speaks
This week, traders will stay focused on U.S. interest rate cut expectations. Inflation reports from the U.K. and Japan will also be important, as markets look for clues on when the Bank of England may cut again and if Japan could raise rates after last week’s strong GDP and the new trade deal with the U.S. The Federal Reserve will release minutes from its July meeting, giving more detail on how officials see inflation, growth, and the timing of future moves.
The Jackson Hole Economic Policy Symposium takes place later in the week, bringing together central bankers and policymakers from around the world to discuss the economy and monetary policy. On Thursday, flash PMI data from the U.S., Eurozone, U.K., and Japan will provide an early look at business activity in August. The week ends with Fed Chair Powell’s speech on Friday, which could give new signals on the U.S. economy and interest rates.
