This weekly outlook covers everything you need to know before the most important inflation report in months. Everything is cooling at once. The rates market has not noticed yet.
Payrolls fell. Wages are growing at their slowest pace since 2021. Oil has given back a chunk of its war premium. And the market still prices a 78.6% chance of a rate hike by December. Wednesday’s CPI is where that argument gets settled.
The data is pointing one way. The market is priced another. Something has to give. This weekly outlook breaks down exactly what to watch and how to position.
For more on preparing for high-impact data, see our guide on how to prepare for high-impact data.
Weekly Outlook: The NFP Shock That Changed Everything
The July jobs report was weak, and it was weak in the places that matter. This is the most important data point in this weekly outlook.
Payrolls fell 23,000. The market was looking for a gain of about 80,000. June got revised down to 20,000. Take government out, which lost 53,000 jobs, and private payrolls added 30,000. That is not a collapse, but it is nothing like a healthy jobs market either.
The unemployment rate went down, from 4.2% to 4.1%. Ignore that. It fell because people stopped being counted as looking for work, not because they found jobs. A shrinking workforce flatters the number. This weekly outlook highlights why that number is misleading.
The line that matters, and it got almost no coverage. Average hourly earnings rose 2 cents to $37.62. That takes annual wage growth to 3.2%, against 3.5% expected. It is the slowest since May 2021. This weekly outlook considers wage growth the most important number in the report.
Here is why that is the important one. Wages are what keeps services inflation alive. Goods prices can fall on their own, but services are mostly labour, and labour is mostly wages. When wage growth slows, the stickiest part of inflation runs out of fuel. Slowly, but it runs out.
For more on how the dollar moves gold, see our guide on how the dollar moves gold,
Weekly Outlook: Oil and the Iran Factor
The risk premium is coming out of crude. This weekly outlook tracks the energy-inflation link closely.
Brent has fallen below $80 for the first time in nearly a month. WTI dropped 5.43% to $75.98. Before that, when Iran indicated it would hold off while the US pause held, Brent fell 8.7% in a single session to $88.36 and WTI fell 7.5% to $82.61.
Oil feeds inflation faster than almost anything else. It is in the pump price, in freight, in the cost of moving any physical thing from one place to another. When oil falls, that works through the numbers quickly. This weekly outlook considers oil the most important commodity to watch.
One thing to be careful about. The market has not fully priced out the risk of this flaring back up, and it is right not to. This is a de-escalation, not a settlement. If it reverses, the oil move reverses with it, and so does the inflation help. This weekly outlook warns you to stay vigilant.
Weekly Outlook: What the Last CPI Already Told Us
June came in with headline inflation at 3.5% on the year and core at 2.6%. Core was down from 2.9% in May and came in below expectations. On the month, core was flat. Energy fell 5.7% and was the single biggest reason the headline dropped 0.4%.
So the gap between 3.5% and 2.6% is basically energy. Nearly a full point of difference between the number people quote and the number the Fed actually watches. This weekly outlook emphasizes the importance of core inflation.
That insight drives this weekly outlook. Energy is distorting the headline, and the core is where the real story lives.
Weekly Outlook: The CPI Trap on Wednesday
July CPI lands on Wednesday. Here is the thing most people are going to get wrong. This weekly outlook prepares you for the trap.
Oil rose through July. Wednesday’s release covers July. So the headline number could come in firm, or even jump, purely because energy rebounded during the month being measured. Exactly the reverse of what happened in June.
If that happens, the first reaction will treat a hot headline as hot inflation. It is not the same thing. Energy pushing the headline around tells you about oil. It tells you very little about whether underlying prices are still cooling. This weekly outlook warns you about that trap.
Watch core. With wage growth at a four-year low and payrolls falling, the case for core cooling again is stronger than it has been in a while. If core confirms it, the headline is noise, and the reaction to the headline is the opportunity. This weekly outlook focuses on core as the real story.
Weekly Outlook: The Rates Market Disconnect
Everything above points one way. Now look at what the rates market is actually pricing. This weekly outlook highlights the biggest disconnect in markets.
Current target rate 3.50–3.75%. According to CME FedWatch , implied probabilities read 9 August 2026:
- 16 September — no change 57.0%, hike 43.0%, ease 0.0%
- 28 October — no change 42.5%, hike 57.5%, ease 0.0%
- 9 December — no change 21.4%, hike 78.6%, ease 0.0%
Read that again. Zero chance of a cut priced at any meeting. Not low. Zero. And by December the market has a 78.6% chance of at least one hike, with 28.7% on 400–425 and 5.4% on 425–450. This weekly outlook considers this the most important chart in markets.
So we have a labour market losing jobs, wages at a four-year low, oil falling, core inflation already cooling, and a rates market pricing hikes and nothing else.
Both of those cannot stay true. Either the data turns back up and the pricing is right, or the pricing is wrong and a lot of hiking premium has to come out of the curve. This is the most important tension in this weekly outlook.
Weekly Outlook: Why This CPI Matters More
When a market is priced for cuts and you get a soft number, there is not much left to price in. The move is small because everyone already agrees. This weekly outlook explains the asymmetry.
This is the opposite. The market is leaning hard one way. If Wednesday’s core cools again, the repricing is not a small adjustment, it is a reversal of a position most of the market is sitting in. That is where outsized moves come from.
And note what a cooling print does not do. It does not price in cuts, because there are no cuts priced to begin with. It takes hikes out. Different mechanism, different size, and most of the commentary on the day will describe it wrongly. This weekly outlook helps you avoid that mistake.
Weekly Outlook: What to Watch in Order
1. Core, month on month. The cleanest read on the trend right now. Do not wait for the year-on-year figure, that is a rear-view mirror. This weekly outlook prioritizes core.
2. Shelter. The biggest single piece of core and the slowest to move. If core is cooling but shelter is holding it up, that is a weaker story than it looks.
3. Core services excluding shelter. This is the wages one. With earnings at 3.2%, this is where you would expect the cooling to show first. This weekly outlook considers this the most important sub-component.
4. Whether real yields agree. Not nominal yields. Real. Gold in particular tracks real yields, and getting that backwards is the most common mistake made on release day.
Weekly Outlook: Two Things Not to Do
Do not trade the first candle. Spreads are at their widest and slippage at its worst in the seconds after the release, and the initial algorithmic reaction to the headline reverses more often than people admit once the detail is read. This weekly outlook emphasizes patience.
Do not size as if you know the number. You do not. Nobody does. The edge is in having a plan for each outcome, not in guessing which one turns up. This weekly outlook is about preparation, not prediction.
For more on risk management during high-impact events, see our guide on risk management strategies.
Weekly Outlook: Dollar Index Pressing 100
The dollar spent this week being sold on a peace deal, and overnight the peace deal stopped working. The index is 99.9520 to 99.97 depending on vendor, firmer on the session against a 99.93 previous close. Thursday’s range ran 99.64 to 100.02, which means 100.00 has already been traded through and given straight back. This weekly outlook tracks the dollar closely.
The 99.45 to 99.55 band remains the level that decides the downside and it is now roughly forty-five pips beneath price and still untested. Above, 100.45 to 100.60 has still not been approached. The fight today is at 100.00, which is where the resting orders sit. This weekly outlook considers 100.00 the most important level.
The confirmed leg is official. Japan and the United States have announced a joint yen-buying operation, stated out loud by both sides. That is a policy bid that can be repeated. The unconfirmed leg is the Iran de-escalation, which is real on the strikes and unsettled on the substance. One of these can be repeated on command. The other can reverse on a sentence. Size the two differently. This weekly outlook highlights the asymmetry.
Key levels. Support is 99.45 to 99.55, then the 99.00 shelf, then 96.95 to 97.05. Resistance is 100.45 to 100.60, then 100.70, then 101.50, then 101.95 to 102.05.
Weekly Outlook: Gold Pinned by Real Yields
Gold is up 1.00% on the week and 0.45% on the month, but down 11.97% over three months and 25.68% over six, while still up 21.59% over the year. That is a market stabilising in the short term inside a much larger correction. Those are two different timeframes telling two different stories. This weekly outlook examines gold’s duality.
At $4,345, gold is below resistance and pinned by the dollar. Gold slipped 0.71%, roughly $29, as the dollar held firm.
Main driver. Real yields, as always. Fed funds at 3.50%-3.75% with core CPI at 3.5% and hike odds of 80% by September and 90% by December. Rising real yields raise the opportunity cost of holding an asset that pays you nothing. That is the single heaviest weight on gold right now, and it is a dollar and yield story before it is a gold story. This weekly outlook considers real yields the key driver.
What we are watching. $4,092 first. It is the nearest level that means anything, and gold has to reclaim it before the $4,150-$4,200 supply even becomes a conversation. Also watching the Middle East. That conflict has paused, not resolved, and the damaged Saudi oil supply has not been repaired. Re-escalation brings the safe-haven bid straight back. This weekly outlook watches both levels and geopolitics.
Key levels. Resistance $4,092, then $4,150-$4,200, then $4,400. Major demand $3,330-$3,430.
What would invalidate the view. A reclaim of $4,092 that holds, followed by acceptance into $4,150-$4,200. That would mean the correction is genuinely stabilising rather than merely pausing.
Weekly Outlook: EUR/USD Breaks to Four-Week Low
The euro broke to a four-week low. That is a genuine structural event, not noise. The shelf that had been holding price up has become the shelf capping it. Roles have flipped. This weekly outlook considers this the cleanest structure on the board.
Main driver. The rate differential, and nothing else. US core inflation at 3.5% against target, Fed funds at 3.50%-3.75%, and a hike priced at 80% by September rising to 90% by December. Capital goes where it is paid. The ECB is not offering a competing story. This weekly outlook highlights the rate differential.
What we are watching. Whether 1.1377-1.1384 is reclaimed on any Fed-driven bounce. That is the single cleanest tell on this pair right now. Reclaim it and the bearish pressure eases. Fail into it and the sellers are still in control.
Key levels. Supply 1.1443-1.1450 and 1.1478-1.1486. Broken demand, now resistance, 1.1377-1.1384.
What would invalidate the view. A decisive reclaim of 1.1377-1.1384 that holds on a retest. That would turn the broken shelf back into support and change the character of the pullback.
Weekly Outlook: Key Levels Summary
| Instrument | Support | Resistance | Current |
|---|---|---|---|
| DXY | 99.45-99.55, 99.00 | 100.45-100.60, 101.50 | 99.95 |
| Gold | $4,092, $4,150-$4,200 | $4,345, $4,400 | $4,345 |
| EUR/USD | 1.1377-1.1384 | 1.1443-1.1450, 1.1478-1.1486 | 1.1380 |
| WTI | $75.00, $72.00 | $80.00, $82.00 | $75.98 |
| Brent | $78.00, $75.00 | $82.00, $85.00 | $79.00 |
Weekly Outlook: Looking Ahead to CPI
US CPI for July lands on Wednesday 12 August at 08:30 New York. It is the first inflation data that fully captures the 24% move in crude from July. This weekly outlook considers it the most important event of the month.
The FOMC is 15 to 16 September. Friday’s payrolls and Wednesday’s CPI are effectively the entire dataset the Committee gets before it decides. Every print between now and 16 September has to do work that the Chair declined to do at the July meeting. This weekly outlook tracks the path to the Fed decision.
A soft core print confirms the NFP narrative and pushes September hike odds lower. A hot core print reopens the debate and puts the Fed back in a difficult position. This weekly outlook has prepared you for both outcomes.
Weekly Outlook: Conclusion
Everything is cooling at once. The rates market has not noticed yet.
Payrolls fell. Wages are at a four-year low. Oil has given back a chunk of its war premium. And the market still prices a 78.6% chance of a rate hike by December.
Both of those cannot stay true. Either the data turns back up and the pricing is right, or the pricing is wrong and a lot of hiking premium has to come out of the curve. Wednesday’s CPI is where that argument gets settled.
The trap is that headline inflation could jump on the oil rebound. The opportunity is that core is where the real story lives. With wage growth at 3.2% and payrolls falling, the case for core cooling again is stronger than it has been in a while.
Watch core. Watch real yields. Do not trade the first candle. Do not size as if you know the number. The edge is in having a plan for each outcome, not in guessing which one turns up.
This weekly outlook has prepared you for both scenarios. Now it is up to you to execute.
Disclaimer
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