Garton Global | Weekly Market Digest
Markets stayed cautious last week as the dollar surged on tariff momentum and fresh safe haven flows. Sterling clawed back some losses but remains fragile ahead of the Bank of England’s rate decision. Meanwhile, Powell’s steady hand calmed markets even as Trump’s trade agenda steamrolled ahead.
Check your positioning and speak to the Garton Global team today.
Last Week
🇺🇸 Trump’s Trade Tsunami Rewrites the Dollar Story
● Tariff wall hits 17.3% — highest since WWII — but markets barely flinch
● EU caves, UK signs, Asia gets hit — Trump’s “deal frenzy” shifts sentiment fast
● Dollar up 4.5% in July as safe haven flows and tariff revenue flood in
🇺🇸 Powell Stands Pat as Trump Turns Up the Heat
● Fed holds rates at 4.25–4.5% despite internal dissent and Trump’s attacks
● Powell resists calls for 1% cuts as traders push back September bets
● Tension builds — Fed vs White House is now a headline risk
🇬🇧 Sterling Buckles Under Debt and Doubt
● Ray Dalio calls it: UK locked in a “debt doom loop” as sentiment dives
● Pound drops on bleak growth outlook — worst since Brexit and Truss budge
● Gains on tariff relief fade fast as August opens with fresh selling
This Week
🇬🇧 BoE expected to cut again as UK growth stalls
● MPC forecast to lower rates by 25bps to 4% on Thursday, with stagnant growth and rising unemployment driving calls for further easing
● Unemployment hit 4.7% in May — a four-year high — while pay growth slowed to its weakest in nearly three years
● With inflation still sticky, a split vote is expected — but most analysts see a cautious 0.25% cut as the base case
🇺🇸 Eyes on ISM services PMI after Fed holds steady
● Powell struck a neutral tone post-Fed, keeping the door open to a September cut — but not ruling out a hike if tariffs and labour shortages fuel inflation
● Two Fed governors dissented in favour of a cut, but the broader message was wait-and-see as Trump’s migration clampdown distorts jobs data
● Tuesday’s ISM services PMI is key — any softening could tilt the balance toward easing, while resilience may delay rate cuts further
Key Events
Monday August 4th
07:30 Swiss CPI
Tuesday August 5th
15:00 US Services PMI’s
23:45 New Zealand Unemployment Rate
Thursday August 7th
12:00 UK monetary policy report & Official Bank Rate
13:30 US Unemployment Claims
Friday August 8th
13:30 Canadian Unemployment Rate
Have a great week,
The Garton Team.
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