Markets Prepare for Turbulence

Markets Prepare for Turbulence as U.S. Tariff Deadline and Key Data Loom

Financial markets are bracing for another potentially volatile week, as the deadline for new U.S. tariffs approaches and multiple key economic reports are set to be released. Following President Trump’s recent tax bill, investors now find themselves balancing optimism about the U.S. economy with ongoing global uncertainties.

The GBPEUR pair has edged down toward 1.15 in recent days, while GBPUSD remains relatively strong, trading above 1.36. This divergence—weakness against the Euro and strength against the Dollar—may persist, especially if European economic indicators continue to disappoint or geopolitical tensions mount.

What to Watch This Week:

Monday: Eurozone Retail Sales
Retail sales in the Eurozone are expected to fall by 0.6%. If actual results match or underperform this forecast, it could weigh on the Euro early in the week.

Tuesday: RBA Rate Decision
The Reserve Bank of Australia is expected to cut interest rates by 25 basis points. While widely anticipated, any dovish tone or signal of further easing could trigger additional losses for the Australian Dollar.

Wednesday: U.S. Tariff Implementation, RBNZ Decision, and FOMC Minutes
Wednesday could be the most impactful day. U.S. tariffs are scheduled to take effect, which could cause sharp movements in the markets—particularly in USD pairs—depending on whether any last-minute adjustments or deals are announced.

In addition, the Reserve Bank of New Zealand is due to announce its interest rate decision, with no changes expected. Investors will be closely watching any forward guidance on monetary policy.

Later in the day, the Federal Reserve will publish the minutes of its latest policy meeting. While no rate moves are expected before September, traders will comb through the document for signals on future economic outlook and interest rate direction.

Thursday: U.S. Jobless Claims
Weekly jobless claims are projected to rise slightly due to seasonal trends. While generally low-impact, unexpected changes could stir short-term volatility in the Dollar.

Friday: UK GDP Figures
UK GDP is forecast to rise by 0.1%, a modest rebound from the previous -0.3% reading. A positive print—even a small one—might offer the Pound some support heading into the weekend.