Global financial markets are entering a crucial week loaded with high-impact macroeconomic developments and policy events that could redefine short-term trends across currencies, commodities, and equities. Central banks once again take the spotlight, with both the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) preparing policy decisions.
However, the most anticipated item remains the release of the , which could offer critical insights into the timing and pace of the Federal Reserve’s long-awaited pivot toward easing.
Complicating the macro picture is the revival of the Trump-era tax debate, with mounting speculation that former President Donald Trump, should he regain office, could reintroduce or expand tax reforms aimed at cutting corporate taxes further. This potential policy shift is already rippling through market sentiment.
Equity markets have priced in improved after-tax earnings, while the has found some support on expectations of a growth-friendly, pro-business environment that could delay or soften Fed rate cuts. However, this optimism is tempered by fiscal sustainability concerns, with analysts warning that deeper tax cuts could exacerbate the U.S. deficit and elevate Treasury yields, potentially tightening financial conditions again.
Central Bank Highlights This Week
Tuesday, July 8:
The RBA is expected to cut its benchmark rate from 3.85% to 3.60%, marking its third cut this year, as it grapples with sluggish GDP growth, weaker exports, and fading consumer demand. Australian inflation has also shown signs of cooling, opening the door for further policy easing.
Wednesday, July 9:
The RBNZ meets under similar conditions, although inflation in New Zealand remains stickier than in Australia. A pause is possible, but dovish language is expected, particularly in light of global deflationary headwinds. Later that day, all eyes will be on the FOMC minutes, which may confirm whether Fed officials are leaning toward a September rate cut.
Markets currently price in a 75% chance of a cut by that meeting, but any sign of hesitation, particularly in light of political uncertainty or inflation risks, could spark repricing.
Thursday and Friday:
Jobless claims in the U.S. and industrial production figures from the eurozone, UK, and Canada will help refine the global growth outlook. Additionally, comments from Fed members like Waller and Daly could either reinforce or challenge the market’s dovish bias.
EUR/USD Holds Steady Ahead of Fed Minutes
The euro is holding ground above the 1.17 level, supported by improved PMI figures in Germany and France, as well as rising investor confidence that the European Central Bank (ECB) will maintain a data-dependent stance rather than pre-committing to easing. The Fed’s cautious tone, reflected in recent speeches, has contributed to narrowing rate differentials, weakening the dollar’s advantage.
Complicating the outlook is the Trump tax narrative: should fiscal stimulus return to the U.S. under a Republican-led government, the dollar could regain strength, especially if growth expectations outweigh concerns about debt.
Technically, is showing continued bullish strength, trading above its 20-, 50-, and 100-day EMAs and approaching the upper Bollinger Band. MACD remains positive, while the Stochastic RSI signals mild overbought conditions.
Support levels include 1.1640, 1.1460, and 1.1379, while resistance zones are at 1.1746, 1.1872, and 1.2000. And while the Outlook is moderately bullish, Pullbacks remain buying opportunities unless price closes below 1.1460.
Gold Consolidates Amid Rate Cut Bets
prices are consolidating around $3,300, caught between expectations and rising political risk premiums. While softer inflation and slower job growth support demand for the metal, potential Trump-driven tax reforms and the resulting boost in real yields could pose headwinds. Also, relevant are the ballooning U.S. debt and geopolitical uncertainty, factors that keep gold attractive as a hedge against policy missteps and long-term currency debasement.
Technically, gold remains in a medium-term uptrend, supported by the 20-, 50-, and 100-day EMAs. The MACD remains slightly bearish, while Bollinger Bands are narrowing, typically a sign of a breakout brewing. Stochastic RSI near 50 suggests neutral momentum. Support lies at 3297, 3277, and 3186. Resistance levels are 3333, 3348, and 3418.
The Outlook is Neutral-to-bullish bias, with caution below 3,277. Positioning remains defensive ahead of U.S. inflation data and Fed minutes.
USD/JPY on the Brink of a Breakout
The yen is in focus this week as the dollar/yen pair approaches critical resistance, with investors weighing Bank of Japan’s ultra-loose policy against possible Fed easing. Trump’s tax narrative adds another layer: if markets begin pricing in a more hawkish fiscal environment, U.S. yields may stay elevated, supporting .
So far, the pair is hovering just below the 146.25 resistance level (100-day EMA), after recently reclaiming the 20- and 50-day averages. MACD is close to a bullish crossover and Bollinger Bands are tight, signaling a pending breakout.
Support levels are at 144.60, 143.26, and 141.80. Resistance levels include 145.15, 146.20, and 148.00.