Week Ahead – EU Tariff, Central Bank Signals & Dollar Momentum

Weekly Market Outlook (July 28th to August 1st)

Markets ended last week on a broadly optimistic note as the U.S.-Japan trade deal lifted global sentiment. Equities surged across major regions, with the S&P 500 and Nasdaq marking fresh record highs. The UK’s FTSE 100 also extended its winning streak to five weeks, reflecting strong global risk appetite.

Despite the equity rally, the U.S. Dollar weakened, continuing its broader downtrend. Improving risk sentiment and market confidence on the dollar kept demand for the greenback subdued, while gold saw a volatile rally—briefly spiking to a 5-week high near $3450 before pulling back as investors rotated back into risk assets.

Week Ahead – EU Tariff, Central Bank Signals & Dollar Momentum

This week, markets will stay focused on the ongoing U.S.-EU trade negotiations, with attention on whether the recent optimism from the U.S.-Japan deal can extend to Europe. Both sides face pressure to reach a deal before the August 1st deadline, and any signs of progress—or setbacks—could trigger sharp market moves.

Meanwhile, several key central bank events, including the Federal Reserve and the Bank of Japan meetings, will dominate attention—alongside the upcoming U.S. labor data. With trade tensions easing slightly, investors will look for clues on whether the Fed may adopt a more balanced tone or hint at a potential shift in its policy path.

At the same time, the U.S. Dollar’s recent weakness remains under scrutiny. Last week’s rebound lacked follow-through, and all eyes are now on whether this week’s Fed guidance and jobs data can revive bullish momentum—or confirm further downside risk.

Key Events & Economic Data, Why It Matters?

While U.S.-EU trade talks are expected to dominate the headlines, several high-impact economic events could drive significant market volatility this week.

Central bank rate decisions which including the Fed, BoJ and BoC along with U.S. labor data will provide crucial insight into global monetary policy paths and market momentum.

1. Bank of Canada Rate Decision – 30th July

The BoC is expected to hold rates steady, but markets will closely watch for forward guidance. With inflation cooling and growth softening, any dovish tone or policy shift could pressure the Canadian Dollar and weigh on broader risk sentiment.

2. Federal Reserve & Bank of Japan Rate Decision – 31st July

The Fed is widely expected no change, but its messaging will be the key focus. After recent trade optimism, markets will look for signs of a policy pivot or continued caution.

The Bank of Japan, meanwhile, faces a weakening Yen and complicated economic outlook. Traders will monitor whether the central bank reinforces its ultra-loose stance or hints at future tweaks.

3. US Non-farm Payroll & Labor Data – 1st August

Friday’s NFP report will be a critical test for U.S. economic resilience. Strong job growth could support the case for a more patient Fed, lifting the dollar. A soft print, on the other hand, might renew rate cut expectations and weigh on risk appetite.

Key Takeaway for the Week

The week ahead is packed with high-impact events—from critical trade deadlines to central bank decisions and major U.S. labor data. While recent optimism has fueled a strong equity rally, uncertainty still lingers as markets approach the August 1st U.S.-EU tariff deadline.

With monetary policy paths from the Fed, BoJ, and BoC still in flux, and sentiment around the U.S. Dollar fragile, this week could mark a turning point. Markets may either extend the current risk-on rally—or quickly unwind if trade talks falter or economic data disappoints.