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US NFP misses with 73k growth and sharp downward revision, EUR/USD bounces

    By
    ActionForex
    -

    U.S. non-farm payrolls rose just 73k in July, well short of the expected 102k. Unusually large revisions made the picture worse—June’s job growth was slashed from 147k to a mere 14k. Unemployment rate edged up from 4.1% to 4.2% as expected, while average hourly earnings rose 0.3% month-over-month, keeping the annual pace at 3.9%.

    While not a disaster, the report showed a clear loss of momentum in hiring, pushing a September rate cut by the Fed back into focus. The sharp downward revision to June data adds weight to concerns that labor market strength is fading more quickly than anticipated.

    EUR/USD bounces notably after the release as Dollar is sold off broadly. Immediate focus is now on 1.1555 support turned resistance. Sustained break there will argue that corrective pattern from 1.1829 has completed with three waves down to 1.1390. Further rally would then be seen back to 1.1788/1829 resistance zone.

    Full US NFP release here.

    European data wrap: PMI points to manufacturing recovery across Europe

      By
      ActionForex
      -

      Eurozone inflation came in firmer than expected in July, with headline CPI holding at 2.0% yoy, defying forecasts for a slight dip. Core CPI was steady at 2.3%, as anticipated. The data supports the view that the ECB may already be done cutting rates this year, with markets increasingly convinced that further easing will require a significant downside surprise.

      More on ECB CPI steady at 2% in July, reinforces case for ECB pause through rest of 2025.

      At the same time, Eurozone PMI Manufacturing was finalized at 49.8, up from June’s 49.5 and marking a 36-month high. While still technically in contraction, momentum is clearly improving. According to Hamburg Commercial Bank, smaller economies like Spain and the Netherlands are leading the way, while recessionary signals are fading in larger countries like Germany and France. The new US–EU trade agreement is also expected to ease business uncertainty moving forward.

      In the UK, Manufacturing PMI was finalized at 48.0 in July, a six-month high. Output neared stabilization, and future expectations rose to their strongest level since February. While the sector remains in mild contraction, the tone has shifted toward cautious optimism.

      Eurozone CPI steady at 2% in July, reinforces case for ECB pause through rest of 2025

        By
        ActionForex
        -

        Eurozone inflation held firmer than expected in July, with headline CPI steady at 2.0% yoy, defying expectations for a slight dip to 1.9% yoy. Core CPI was unchanged at 2.3% yoy as forecast. Today’s inflation release reinforces the growing expectation that ECB already completed the easing cycle, as the bar for additional easing is increasingly high.

        The underlying components show little sign of disinflation picking up momentum. Non-energy industrial goods inflation rose to 0.8% from 0.5%. While energy inflation remained deeply negative at -2.5%, that decline is slowing. Food inflation ticked up slightly from 3.1% to 3.3%. Services inflation eased only modestly from 3.3% to 3.1%.

        Swaps now price in less than 50% chance of another rate cut this year. Comments from officials in recent weeks have leaned cautious, citing inflation stabilization at and waning downside risks tied to the global trade environment. The recent breakthrough in US-EU trade negotiations has also removed a key external headwind.

        Besides, major banks are shifting their forecasts in line with this view. Deutsche Bank, Goldman Sachs, and BNP Paribas have all walked back expectations for more cuts in 2025.

        Full Eurozone CPI flash release here.

        Gold and Silver vulnerable as strong NFP could supercharge Dollar rally

          By
          ActionForex
          -

          Copper’s collapse this week has triggered renewed weakness across metals, with Silver and Gold also on the back foot. However, underlying, it’s Dollar’s unrelenting strength that’s proving most punishing for precious metals. The next catalyst? The July US non-farm payroll report due today.

          NFP is expected to show 102k job growth, a slight rise in the unemployment rate from 4.1% to 4.2%, and solid wage gains of 0.3% mom.

          This month, only two of the usual four leading indicators are available to help guide expectations. The ADP report posted a 104k rise in private jobs, a bounce from last month’s downward surprise. Meanwhile, the 4-week moving average of initial jobless claims fell to 221k.

          Taken together, these suggest a decent chance of an upside surprise in today’s payrolls release. That would likely trigger further hawkish adjustment in Fed expectations. After this week’s solid GDP and Powell’s cautious tone, markets have already dialed back bets on aggressive easing.

          Fed fund futures are pricing just a .2% chance of a September rate cut, and only 40.1% chance of two cuts this year. A robust NFP report could shift expectations further toward a single cut in 2025, providing fresh tailwinds for the Dollar and keeping downward pressure on Gold and Silver.

          Technically, Silver’s extended fall this week should confirm completion of the five-wave rally from 28.28, on bearish divergence condition in D MACD. While 55 D EMA (now at 36.33) might provide interim support, the correction from 39.49 should at least extend to 38.2% retracement of 28.28 to 39.49 at 35.20 before completion.

          Gold is extending the medium term corrective pattern from 3499.79 high. Immediate focus is on 3248.21 support. Firm break there will open up deeper fall to test 38.2% retracement of 2584.24 to 3499.79 at 3150.04 again.


          China Caixin PMI manufacturing contracts again as export demand falters

            By
            ActionForex
            -

            China’s Caixin Manufacturing PMI dropped from 50.4 to 49.5 in July, signaling renewed contraction in factory activity and marking the second sub-50 reading in the past three months.

            S&P Global’s Jingyi Pan noted that manufacturing production declined for only the second time since October 2023, as firms pulled back operations amid cautious demand outlook heading into H2 2025.

            Weaker foreign demand was again a key drag, with export orders remaining sluggish amid global trade tensions. Domestic sales saw some resilience thanks to business development efforts, but overall growth was described as “only fractional.”

            Full China Caixin PMI manufacturing release here.

            Canada’s economy shrinks again in May, but June rebound eyed

              By
              ActionForex
              -

              Canada’s GDP contracted by -0.1% mom in May, marking a second consecutive monthly decline and aligning with expectations.

              The decline was driven by weakness in goods-producing sectors, particularly a pullback in mining, quarrying, and oil and gas. While manufacturing managed to expand, services output was flat overall. Only 7 out of 20 industries registered growth.

              However, there may be some relief on the horizon—Statistics Canada’s advance estimate suggests GDP rose 0.1% in June, with strength in retail and wholesale trade partially countered by a dip in manufacturing.

              Full Canada’s GDP release here.

              US core PCE holds at 2.8%, income and spending rebound

                By
                ActionForex
                -

                Fed’s preferred inflation gauge offered little relief in June, with the core PCE index holding at 2.8% yoy, above market expectations of 2.7% yoy. Headline PCE inflation also rose more than expected from 2.4% yoy to 2.6% yoy. Both monthly readings stood at 0.3% mom, reinforcing the message that price pressures are proving sticky and raising questions about the timing of any Fed rate cuts.

                On the household front, income and spending showed modest improvement. Personal income climbed 0.3% mom, rebounding from a surprise decline in May. Personal spending rose by the same margin, albeit slightly below the 0.4% mom forecast. The recovery suggests consumers remain active, but the slight miss in spending hints at growing sensitivity to price levels and borrowing costs.


                Labor data, however, remained steady: initial jobless claims edged up by 1 to 218k and continuing claims were flat at 1.946 million—consistent with a still-solid employment backdrop.

                Altogether, the mixed bag of sticky inflation, resilient income, and cautious consumption leaves the Fed on hold, with markets still uncertain about the case for a September rate cut.

                Full US personal income and outlook release here.

                Full US jobless claims release here.

                European data wrap: German CPI and Swiss retail surprise to upside

                  By
                  ActionForex
                  -

                  European data released today pointed to continued labor market resilience and upside surprises on inflation.

                  Eurozone unemployment rate held steady at 6.2% in June, defying expectations of a slight uptick to 6.3%. Across the broader EU, the jobless rate was unchanged at 5.9%, underscoring continued employment strength despite trade disruptions and slowing manufacturing activity.

                  In Germany, inflation pressures were firmer than expected. Headline CPI rose 0.3% mom in July, outpacing consensus for a 0.2% rise. Annual inflation held at 2.0% yoy, above the expected 1.8% yoy, suggesting steady underlying pressures even amid weaker growth. Import prices were flat on the month, beating forecasts for a modest decline of -0.2% mom, potentially limiting some disinflation via exchange rate channels.

                  Separately, Switzerland surprised to the upside with a 3.8% yoy surge in June retail sales, well above the 0.2% yoy consensus. The data offers a counterpoint to concerns about weakening domestic demand in the region and may reinforce the case for a patient SNB as it weighs the need to bring back negative rate.

                  AUD/JPY reasserts bullish bias, as BoJ seen in no rush to hike again

                    By
                    ActionForex
                    -

                    Yen reversed earlier gains in the European session as traders reassessed the Bank of Japan’s latest economic projections and policy stance. While BoJ maintained its upbeat tone on inflation eventually aligning with the 2% target, near-term commentary and projections have dampened rate hike expectations.

                    The central bank sharply upgraded core CPI forecasts for fiscal 2025 to 2.7%, but emphasized that the jump was mainly die to food prices. It sees inflation quickly falling back, with underlying price growth remaining subdued.

                    Even though core CPI is now expected to hit 1.8% in fiscal 2026 and reach 2.0% in 2027, the market appears to be focusing on BoJ’s cautious tone and lack of urgency to tighten further. The reaction suggests that traders may now be dialing back expectations for any near-term policy action.

                    Technically, AUD/JPY’s bounce solidifies the case that price actions from 97.41 are merely forming a sideway consolidation pattern. Thus, near term bullish outlook is maintained. Firm break of 97.41 will target 61.8% projection of 86.03 to 95.63 from 92.30 at 98.23 next.

                    Asia data wrap: Japan and Australia outperform but China falters

                      By
                      ActionForex
                      -

                      Asian economies delivered mixed signals as fresh data highlighted strength in Japan and Australia while exposing continued softness in China.

                      Japan’s industrial production rose 1.7% mom in June, defying forecasts for a -0.7% mom decline. The surge was driven by a 14.8% mom jump in transport equipment excluding autos and strength in electronics, a positive surprise despite ongoing US tariffs. Retail sales also rose 2.0% yoy, slightly beating forecasts of 1.8% yoy.

                      Australian retail sales posted an impressive 1.2% monthly gain in June, sharply above the 0.4% mom consensus. The ABS attributed the spike to widespread discounting and new product launches.

                      Meanwhile, China’s July PMIs disappointed. The NBS Manufacturing PMI dipped from 49.7 to 49.3, remaining in contraction for the fourth straight month. The export component showed no signs of recovery, marking 15 months of sub-50 readings at 47.1 Non-Manufacturing PMI also weakened from 50.5 to 50.1, its lowest since November.

                      BoJ holds at 0.50%, lifts 2025 inflation projections sharply on food costs

                        By
                        ActionForex
                        -

                        The BoJ kept its short-term policy rate unchanged at 0.50% as expected, reaffirming its cautious stance in the face of growing external risks. While the central bank reiterated its intention to continue normalizing policy in light of improving economic and price conditions, it also cited heightened uncertainty around global trade and policy developments as justification for a steady hand.

                        In its latest quarterly outlook, the BoJ sharply raised its inflation forecasts. Core CPI for fiscal 2025 was lifted from 2.2% to 2.7%. Core-core CPI, which excludes both fresh food and energy, jumped from 2.3% to 2.8%. The upward revisions were largely attributed to food price increases, though the BoJ still sees underlying inflation remaining subdued in the first half of the forecast horizon.

                        For fiscal 2026, core CPI was revised slightly higher from 1.7% to 1.8%, and core-core CPI from 1.8% to 1.9%. Projections for fiscal 2027 remained unchanged at 2.0% for both measures. The Bank noted that inflation will pick up toward levels “generally consistent” with the price stability target in the second half of the projection period.

                        Growth outlooks were little changed. The fiscal 2025 GDP forecast was lifted modestly to 0.6% from 0.5%, while estimates for fiscal 2026 and 2027 were held at 0.7% and 1.0%, respectively. The Bank continues to expect a slow but steady recovery, supported by resilient domestic demand and improvements in global conditions.

                        BoJ emphasized that the risk balance for growth remains tilted to the downside for 2025 and 2026, though price risks are now broadly balanced.

                        Full BoJ Outlook for Economic Activity and Prices.

                        Fed Powell’s caution cools September cut bets, stocks end mixed

                          By
                          ActionForex
                          -

                          U.S. stocks ended mixed overnight after the Fed held its policy rate steady at 4.25–4.50%, in line with market expectations. The dissenting votes from Governors Christopher Waller and Michelle Bowman in favor of a cut came as little surprise, reflecting known dovish leanings. However, Chair Jerome Powell’s tone in the press conference struck a more cautious chord than markets had anticipated.

                          Powell pushed back against speculation of a near-term pivot, stating firmly, “We have made no decisions about September.” That effectively left the door open, but offered little for those hoping for imminent easing. Powell also warned that while tariff-driven inflation may be transitory, “more persistent” effects couldn’t be ruled out.

                          Between now and the next FOMC meeting, two additional rounds of jobs and inflation reports will be released—giving the Fed a wider lens to assess policy needs.

                          Traders responded by paring back bets for a September cut. Market pricing now sees just a 43% chance of easing at the next meeting, down from 65% a day earlier. The message: the Fed may be approaching the end of its pause, but it’s not ready to blink just yet.

                          Technically, while S&P 500’s up trend continued this week, it’s clearly continuing to lose upward momentum as seen in bearish divergence condition in D MACD. 6500 psychological level is likely to cap upside and bring consolidations. That’s slightly above a major fibonacci level of 61.8% projection of 3491.58 to 6147.43 from 4835.04 at 6476.35. Break of 6281.71 support will indicate that a near term correction has already started towards 55 D EMA (now at 6110.15).

                          Fed holds steady, dissenters Waller and Bowman call for cut

                            By
                            ActionForex
                            -

                            Fed held interest rates unchanged at 4.25–4.50% as widely expected, but a rare split emerged within the Committee. Governors Michelle Bowman and Christopher Waller dissented, voting in favor of a 25bps cut. Their push to begin easing suggests that internal debate is intensifying, even as the broader Committee maintains a cautious stance.

                            The statement offered few surprises, characterizing economic activity as having “moderated” in the first half of the year. Labor market conditions remain “solid” with “low” unemployment, while inflation remains “somewhat elevated.”

                            Fed reiterated its vigilance toward risks on “both sides of its dual mandate”, but stopped short of signaling a policy shift.

                            Full FOMC statement here.

                            BoC keeps powder dry, signals easing if tariff impact deepens

                              By
                              ActionForex
                              -

                              BoC left its policy rate unchanged at 2.75% as expected, but opened the door to future easing. In its statement, the central bank noted that if economic weakness continues to weigh on inflation and upward pressures from trade disruptions are contained, “there may be a need for a reduction in the policy interest rate.”

                              The Canadian economy is reeling from recent U.S. tariffs. After a strong Q1, likely driven by pre-emptive export surges, GDP is projected to have shrunk -1.5% in Q2. The BoC sees a modest rebound in H2, forecasting 1% growth under the current trade conditions. But the path ahead diverges sharply depending on whether the trade standoff worsens or eases. A tariff escalation scenario would seen the Canadian economy “contracts through the rest of this year”.

                              Inflation is expected to remain close to 2% in the current tariff scenario. While de-escalation could ease price pressures, higher tariffs and rising supply-chain costs pose upside risks. Businesses are already reporting increased expenses as they adjust sourcing strategies—raising the potential for broader consumer price impacts.

                              Full BoC statement here.

                              US GDP surges 3.0% annualized in Q2, inflation gauges ease

                                By
                                ActionForex
                                -

                                US GDP growth accelerated to 3.0% annualized in Q2, far above expectations, as falling imports and firmer consumer spending powered the expansion. These gains were partially offset by weaker investment and exports, though the data suggest domestic demand remains firm.

                                Notably, inflation pressures eased significantly. The PCE price index rose just 2.1% in Q2, down from 3.7% in Q1, while the core PCE gauge slowed to 2.5% from 3.5%.

                                Full US Q2 GDP advance release here.

                                US ADP jobs grow 75k, ongoing labor market resilience

                                  By
                                  ActionForex
                                  -

                                  U.S. private payrolls grew 104k in July, beating expectations of 75k and suggesting continued strength in the labor market. Gains were broad-based, with 31k new jobs in goods-producing industries and 74k in services. Hiring was evenly spread across firm sizes, with both medium and large companies contributing 46k each.

                                  Wage pressures held steady, with pay up 4.4% yoy for job-stayers and 7% for job-changers, unchanged for the fourth consecutive month.

                                  ADP’s Chief Economist Nela Richardson noted the data points to “a healthy economy” as employers grow more confident in consumer resilience.

                                  Full US ADP employment release here.

                                  Eurozone GDP beats with 0.1% qoq growth, but Germany and Italy contract

                                    By
                                    ActionForex
                                    -

                                    Eurozone GDP grew 0.1% qoq in Q2, slightly above market expectations of flat growth, while the broader EU expanded 0.2% qoq. On a year-over-year basis, GDP rose 1.4% yoy in the Eurozone and 1.5% yoy in the EU—marking a mild deceleration from Q1’s annual pace of 1.5% yoy and 1.6% yoy respectively. .

                                    Spain led the quarter with a strong 0.7% qoq gain, followed by Portugal (0.6%) and Estonia (0.5%). However, Germany and Italy both posted marginal contractions of -0.1%, and Ireland saw the largest drop at -1.0%. Despite the mixed quarterly results, all member states reported positive year-on-year growth.

                                    Full Eurozone GDP release here.

                                    BoC to hold fire again, September cut still in play

                                      By
                                      ActionForex
                                      -

                                      BoC is widely expected to hold its overnight rate steady at 2.75% today, marking a third consecutive pause in its rate-cut cycle. The slight improvement in the labor market, with unemployment edging back down to 6.9% in June, gives the central bank breathing space to maintain its current stance. However, core inflation pressures remain stubborn, with CPI common stuck at 2.6%, far from the bank’s comfort zone.

                                      With policy already sitting in the neutral range, the BoC is likely opting for a wait-and-see approach, especially given ongoing trade uncertainties and the potential for delayed tariff pass-throughs to consumer prices later in the year. While underlying growth concerns persist, there’s a case for keeping policy steady until inflation dynamics become clearer.

                                      Markets continue to expect further easing this year. A Reuters poll shows that nearly two-thirds of economists forecast a 25 basis point cut in September, followed by another by year-end. That would bring the policy rate down to 2.25%, aligning with weakening demand and persistent disinflation pressures if they materialize.

                                      Technically, considering bullish convergence condition in D MACD, USD/CAD’s break of 55 D EMA this week suggests that it might already be correcting the whole fall from 1.4791. Further rebound is likely in the near term. Though, strong resistance should emerge below 1.4014 (38.2% retracement of 1.4791 to 1.3538 at 1.4017 to limit upside.

                                      Dollar loses momentum ahead of Fed’s potential dovish tilt

                                        By
                                        ActionForex
                                        -

                                        Fed is widely expected to keep interest rates unchanged 4.25–4.50%. Markets have priced in over a 97% chance of a hold, making the decision a foregone conclusion. However, the markets would watch out for any dovish signals from the Fed, which could put pressure on the Dollar, particularly if policy language starts to point more clearly toward a September cut.

                                        Key to the announcement will be whether dovish members like Governors Christopher Waller and Michelle Bowman begin to shift their rhetoric into formal dissent— casting votes for an immediate cut. If additional policymakers join them, markets will likely interpret it as confirmation that a policy pivot is nearing. Fed Chair Jerome Powell’s tone in the post-meeting press conference will also be crucial in guiding expectations into the fall.

                                        Currently, futures markets see a roughly 65% chance of a rate cut in September. Any softening in Powell’s stance or language around tariff uncertainty and inflation could raise those odds.

                                        Economic data released ahead of the Fed will help set the stage. A 2.4% annualized Q2 GDP print is expected, following Q1’s surprising -0.5% contraction. However, this strength is largely technical, driven by a reversal in imports following tariff-related stockpiling in Q1, rather than an underlying surge in domestic activity.

                                        Technically, USD/JPY’s rebound from 145.84 lost momentum ahead of 149.17 resistance. Intraday bias is turned neutral first. On the upside, firm break of 149.17 will resume whole rally from 139.87 and target 100% projection of 139.87 to 148.64 from 142.66 at 151.43, which is close to 151.22 fibonacci level. Nevertheless, break of 147.50 minor support will extend the corrective pattern from 149.17 with another falling leg towards 145.84 first.

                                        Australia CPI cools to 2.1% in Q2, June reading undershoots

                                          By
                                          ActionForex
                                          -

                                          Australia’s inflation pressures continued to ease in Q2, reinforcing expectations for further policy easing from the RBA.

                                          Headline CPI rose 0.7% qoq, down from Q1’s 0.9% qoq and under the 0.8% qoq consensus. On an annual basis, CPI slowed from 2.4% yoy to 2.1% yoy, the lowest since early 2021, and below expectation of 2.2% yoy.

                                          Trimmed mean inflation, the RBA’s preferred gauge, also moderated from 0.7% qoq to 0.6% qoq. Annual rate fell from 2.9% to 2.7% yoy, matched expectations, and marking the lowest since Q4 2021.

                                          Underlying disinflation is broadening too. Annual services inflation cooled from 3.7% yoy to 3.3% yoy, the weakest since Q2 2022. Goods inflation dipped back to 1.1% yoy after a brief uptick from Q4’s 0.8% yoy to Q1’s 1.3% yoy.

                                          The June monthly CPI dropped from 2.1% yoy to 1.9% yoy, also below expectations of 2.1% yoy, and undershoots RBA’s 2-3% target band.

                                          Full Australia quarterly CPI release here.

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