Sweden’s Riksbank surprised markets with a 25 bp cut to 1.75%, aiming to support growth while judging inflation pressures temporary. Policymakers flagged risks from geopolitics, U.S. trade policy, and global price trends but signaled rates will stay steady for now.
The Federal Reserve cut rates by 25 basis points, calling the move “risk management” while signaling two more cuts this year and only one in 2026. US stocks touched fresh records, led by technology shares, while the dollar rebounded and Treasury yields stayed near 4.1%. Commodities moved mixed, with gold holding close to $3,700 and silver above $44 on safe-haven flows, while Brent crude slipped toward $66 on oversupply concerns despite geopolitical risks.
The week was busy with weak U.S. jobs data, which shifted market sentiment and reinforced expectations of multiple Fed rate cuts ahead.
Focus turns to U.S. inflation data, benchmark payroll revisions, and fresh releases from China and India.
The week opened with U.S. data in focus, France facing another government crisis, and junk bond spreads flashing warnings, while gold, silver, Brent, and Bitcoin showed mixed moves.
Earnings growth among the “Magnificent 7” widened its lead, and revisions suggest the gap will persist into 2026.
US inflation held steady at 2.7% in July, slightly under expectations, but core CPI accelerated to 3.1%, its fastest pace in five months. Used car prices and transportation costs climbed, while energy prices, especially gasoline, declined. The mixed picture keeps the Fed cautious ahead of September, where debate continues between a standard 25 bps rate cut and a riskier 50 bps move. Treasury Secretary Bessent has pressed for deeper cuts, while President Trump has openly urged Powell to act.
U.S. factory orders fell 4.8% in June, the second drop in three months, while the trade deficit narrowed 16% to its lowest since September 2023. U.S. Services PMI rose to 55.7, its highest in seven months, signaling solid growth. The UK Services PMI slipped to 51.8, showing slower expansion, while the Eurozone Services PMI edged up to 51.0. Globally, the Composite PMI increased to 52.4. This indicates three months of improving growth.
