Tariffs were once again front and center early in the day, with Trump putting the spotlight back on higher trade levies for chips and semiconductors, as well as possible oil-related sanctions.
The BOE decision also stole the show with a “hawkish cut” as fewer than expected MPC members voted to ease.
Here are headlines you may have missed in the last trading sessions!
Headlines:
- Trump reportedly gearing up to slap additional 15% tariffs on Japan, reiterated threat of large tariffs on chips and semiconductors
- U.S. Secretary of State Rubio dismissed rumors of a Trump-Putin call
- Australia Building Permits MoM Final for June 2025: 11.9% (11.9% forecast; 3.2% previous)
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Australia Balance of Trade for June 2025: 5.37B (3.8B forecast; 2.24B previous)
- Australia Imports MoM for June 2025: -3.1% (3.8% previous)
- Australia Exports MoM for June 2025: 6.0% (-2.7% previous)
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China Balance of Trade for July 2025: 98.24B (117.3B forecast; 114.77B previous)
- China Exports YoY for July 2025: 7.2% (5.1% forecast; 5.8% previous)
- China Imports YoY for July 2025: 4.1% (-1.3% forecast; 1.1% previous)
- New Zealand Business Inflation Expectations for September 30, 2025: 2.28% (1.8% forecast; 2.29% previous)
- China continued to stockpile gold reserves for ninth month in a row
- Japan Leading Economic Index Prel for June 2025: 106.1 (105.5 forecast; 104.8 previous)
- Trump said that billions of dollars are flowing into the U.S. as reciprocal tariffs take effect
- Trump signed an executive order opening the door for 401(k)s to invest in bitcoin and other alternative real estate assets
- Japan slashed growth forecasts amid trade policy uncertainty
- Germany Balance of Trade for June 2025: 14.9B (17.9B forecast; 18.4B previous)
- Germany Exports MoM for June 2025: 0.8% (0.5% forecast; -1.4% previous)
- Germany Imports MoM for June 2025: 4.2% (0.9% forecast; -3.8% previous)
- Germany Industrial Production MoM for June 2025: -1.9% (-0.8% forecast; 1.2% previous)
- U.K. Halifax House Price Index for July 2025: 2.4% (2.2% forecast; 2.5% previous)
- Swiss Unemployment Rate for July 2025: 2.7% (2.7% expected, 2.7% previous)
- Bank of England cut interest rates from 4.25% to 4.00% as expected in 5-4 MPC vote (8-1 expected)
- U.S. Treasury Secretary Bessent said that trade deals are “largely done,” estimates over $300 billion in potential tariffs revenue
- U.S. Initial Jobless Claims for August 2, 2025: 222K (226K expected, 218K previous)
- U.S. Unit Labor Costs QoQ for Q2 2025: 2.0% (1.6% expected, 6.6% previous)
- U.S. Non-Farm Productivity QoQ for Q2 2025: 1.8% (2.4% expected, -1.5% previous)
- Canada Ivey PMI for July 2025: 54.5 (55.8 expected, 53.3 previous)
- Fed official Bostic: Economic fundamentals remain solid but acknowledged slowing jobs growth, tariffs to add upward pressure for next 6-12 months and suggested one rate cut this year
- U.S. Consumer Inflation Expectations for July 2025: 3.0% (3.1% expected, 3.0% previous)
- President Trump taps Stephen Miran to fill Kugler’s vacant Fed position, sees no inflation threat from tariffs
- Trump team survey favored Fed official Waller to replace Chairperson Powell
- U.S. Commerce Secretary Lutnick suggested they will likely extend trade deadline with China for 90 days
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Majority of asset classes were chilling in ranges during the early Asian session, with the exception of crude oil which ripped higher after White House officials rebuffed rumors of a Trump-Putin call happening anytime soon.
Trump himself reiterated threats of sanctions on countries purchasing large amounts of Russian oil, including China, while also suggesting an additional 15% in tariffs on Japan plus 100% tariffs on chips and semiconductors.
Gold also edged higher as the session went on, likely buoyed by safe-haven flows and news that China increased its gold reserves for the ninth month in a row. Bitcoin managed to pull higher around the start of the London session, following reports that Trump signed an executive order to allow bitcoin as part of retirement funds, reclaiming the $117K mark before the U.S. session close.
Equities had a rollercoaster ride, initially finding some support from U.S. Treasury Secretary Bessent’s remarks that trade deals are “largely done” and could generate an additional $300 billion in revenue from tariffs. However, gains were erased when jobs-related data continued to reflect weak spots in the labor market, throwing the spotlight back on last week’s NFP miss.
U.S. stock indices still managed to recover slightly before session’s end, thanks to reports suggesting that Trump’s team is favoring dovish Fed official Waller to replace Chairperson Powell by the end of his term, upping the odds of lower borrowing costs down the line.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The Greenback found itself on slightly bearish footing in Thursday’s early Asian session, with USD/JPY initially dipping then rebounding sharply on Trump’s threats of additional 15% tariffs on Japan. Further broad USD weakness picked up on resurfacing trade tensions, as Trump continued to talk about higher tariffs on chips and semiconductors, as well as potential sanctions on countries buying Russian oil.
Dollar bears took a chill pill around the start of the London session, as a bit of cautious optimism returned after U.S. Treasury Secretary Bessent suggested that trade deals are “largely done.” Sterling bucked the trend, though, as the U.K. currency got a strong boost from a “hawkish cut” by the BOE with only five members voting to ease instead of the expected eight.
USD bulls continued to charge as the U.S. session went on, shrugging off some misses in the initial jobless claims and unit labor costs data, as Fed official Bostic sounded less dovish in calling for just one interest rate cut this year. Gains were mostly returned before session’s end, however, as the Trump team survey pointed to dovish Fed official Waller possibly replacing Chairperson Powell.
Upcoming Potential Catalysts on the Economic Calendar
- Japan Eco Watchers Survey Current for July 2025 at 5:00 am GMT
- France Unemployment Rate for June 30, 2025 at 5:30 am GMT
- Swiss Consumer Confidence for July 2025 at 7:00 am GMT
- Canada Employment Report at 12:30 pm GMT
There’s not much in the way of top-tier economic releases early in the day, possibly leading to a bit of consolidation before Canada’s highly-expected jobs report is printed during the New York session.
As always, look out for global trade developments and geopolitical headlines that could influence overall market sentiment. Stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!
