Weekly Market Preview: What’s Moving the Markets This Week (10–14 August)

Last week’s NFP print was the most closely watched US labour market release of the summer. Friday’s result shifted market expectations significantly. This week the focus moves to inflation and consumer spending, with five releases spanning AUD and USD between Tuesday and Friday. Everything this week feeds directly into what the Federal Reserve signals at Jackson Hole on August 28.

Here is what happened last week and what traders need to watch this week.

What Happened Last Week

NFP July: first negative print of the cycle

The Bureau of Labor Statistics reported on Friday that the US economy shed 23,000 jobs in July, the first negative headline payroll print of the current tightening cycle. The result fell far short of the 80,000 consensus forecast. June was revised sharply lower from +57,000 to +20,000 and May was revised down from +129,000 to +63,000. Combined revisions across May and June subtracted 103,000 jobs from previously reported figures.

The unemployment rate fell to 4.1% from 4.2%, but the improvement was not driven by genuine job creation. The labour force participation rate slipped to 61.4%, down 0.1 percentage points, meaning the rate fell because fewer people were counted as looking for work. The more telling internal signal was the surge in temporary layoffs, which jumped 153,000 to 921,000. That level has historically been a leading indicator of broader labour market weakness. Average hourly earnings rose just $0.02 to $37.62, with annual wage growth slowing to 3.2% from 3.5%.

Markets reacted sharply to the soft data. The Nasdaq rose 5.2% for the week, the S&P 500 gained 3.6%, and the Dow added 3%, the strongest weekly performance for all three indexes since April. September Fed rate hike expectations fell sharply following the print.

This Week’s Events

Tuesday, 11 August — RBA Rate Decision (AUD) | 4:30 AM GMT

The Reserve Bank of Australia announces its August decision at 2:30 PM AEST on Tuesday, with the quarterly Statement on Monetary Policy released simultaneously and Governor Michele Bullock’s press conference at 3:30 PM AEST. This is one of four quarterly SMP meetings per year, each of which includes the RBA’s full updated economic forecasts for inflation, GDP, and the labour market.

The RBA has held rates at 4.35% since its third consecutive hike in May 2026. All four major Australian banks, CBA, NAB, ANZ, and Westpac, now forecast a hold at 4.35% after June quarter CPI came in below expectations at 3.8% headline and 3.6% trimmed mean. Market pricing puts the probability of a hike in the low single digits. The June quarter trimmed mean of 3.6% was below the RBA’s own May forecast of 3.8%, removing the immediate case for further tightening.

Market pricing and all four major bank forecasts point to a hold. The SMP’s updated inflation, GDP, and labour market forecasts are where the market-moving signal will come from. If the RBA upgrades its inflation outlook or signals that further hikes remain on the table later in 2026, AUD is likely to find support. If the SMP signals the rate cycle has peaked, AUD may come under pressure.

What traders are watching:

Hold with hawkish SMP — Bullish AUD. RBA keeps tightening bias alive. AUD supported as rate expectations for later in 2026 hold firm.

Hold with neutral or dovish SMP — Bearish AUD. Signals the RBA believes the rate cycle has peaked. AUD weakens as rate differentials narrow.

Wednesday, 12 August — US Consumer Price Index (USD) | 12:30 PM GMT

The most important release of the week for USD pairs. Following last Friday’s sharply negative NFP print, this is the first major inflation read the Fed will have before Jackson Hole. Both data points will be available to the Fed before the Jackson Hole keynote on August 28.

June CPI fell 0.4% month-on-month and rose 3.5% year-on-year. Core CPI, which excludes food and energy, was unchanged on the month and rose 2.6% year-on-year. That was the softest core reading since March 2021. The primary driver of June’s headline decline was a 12% fall in gasoline prices linked to the US-Iran ceasefire.

For July, the picture is more complicated. Oil prices climbed back above $108 in July following the breakdown of the US-Iran ceasefire and renewed hostilities in the final week of the month. The BLS shelter component, which makes up roughly one-third of the core CPI basket, will be the key variable to watch. Forecasters are split on whether July’s reading marks a continuation of June’s disinflation trend or a partial reversal driven by energy and shelter costs.

What traders are watching:

Higher than expected — Bullish USD. Reinforces the case for the Fed to stay restrictive. September hike expectations rebuild. Dollar strengthens.

Lower than expected — Bearish USD. Confirms inflation is cooling and reduces the urgency for further tightening. Dollar weakens and rate cut expectations for 2027 move earlier.

Thursday, 13 August — US Producer Price Index (USD) | 12:30 PM GMT

PPI measures what factories and producers pay to make goods before those costs reach consumers. It is a leading indicator for future consumer inflation. When producer costs are rising, higher consumer prices typically follow within one to three months.

June PPI fell 0.3% month-on-month, the first decline since August 2025 and the sharpest monthly fall since April of last year. The decline was driven by a 12% drop in gasoline prices and a 6.4% fall in energy goods overall. Year-on-year, final demand PPI came in at 5.5%, below the 6.2% consensus and well below May’s peak of 6.5%. Core PPI excluding food and energy rose 0.2% on the month, below the 0.4% forecast.

For July, Continuum Economics forecasts headline PPI to rise 0.1% month-on-month, with energy expected to fall a further 3.0% as June’s ceasefire-driven relief priced through. Core PPI is forecast to rise 0.3% month-on-month, firmer than June’s 0.2% outcome. Year-on-year, Continuum expects PPI to ease further below June’s 5.5% reading.

Thursday’s PPI release comes one day after Wednesday’s CPI. Together the two readings will give the clearest picture yet of whether the June disinflation trend in producer and consumer prices is holding or reversing.

What traders are watching:

Higher than expected — Bullish USD. Signals producer cost pressures are rebuilding, which feeds into future consumer inflation. Supports the case for sustained Fed restrictiveness.

Lower than expected — Bearish USD. Confirms the disinflation trend is extending into the supply chain. Reduces the case for further tightening and weighs on the Dollar.

Friday, 14 August — US Retail Sales (USD) | 12:30 PM GMT

Retail Sales measures total spending in American stores and online for the reference month. Because consumer spending drives roughly two thirds of US GDP, this report is a direct measure of whether the US economy is holding up or slowing down.

June retail sales rose 0.2% month-on-month, the softest reading since January, following four consecutive months of stronger gains. The slowdown was largely driven by a sharp decline in gasoline station receipts as fuel prices fell in June. Excluding gas stations, the underlying spending picture was somewhat firmer. The control group, which feeds directly into GDP calculations, held steady.

July brings a more complex backdrop. Retail sales typically benefit from summer consumer activity and Amazon’s Prime Day, which fell in mid-July this year. Coresight Research projected in its July 2026 outlook that retail activity in July would be the strongest of the year, citing promotional activity, early back-to-school demand, and pull-forward purchasing. However, the savings rate has fallen to a four-year low and the University of Michigan Consumer Sentiment survey, which also releases Friday, has been in downbeat territory since May.

The retail sales figure will be the last major consumer data point the Fed has before Jackson Hole. A strong July reading would reduce concerns that last week’s labour market weakness is spilling into consumer spending. A weak reading would compound the concern.

What traders are watching:

Higher than expected — Bullish USD. The US consumer is holding up despite labour market softness. Reduces expectations for early rate cuts.

Lower than expected — Bearish USD. Confirms consumer spending is slowing. Builds the case for the Fed to shift toward easing in 2027 earlier than projected.

Friday, 14 August — University of Michigan Consumer Sentiment (USD) | 2:00 PM GMT

The preliminary August consumer sentiment reading from the University of Michigan closes the data week. This survey tracks how American households feel about current economic conditions and their expectations for the next six to twelve months.

Sentiment improved slightly in July after hitting a record low in May. The University of Michigan’s July final reading came in at 66.4, above the preliminary estimate of 65.5, though still well below the 90+ levels that characterised the 2024 expansion. Consumer concerns about the labour market and persistent inflation have weighed on confidence throughout 2026. Following the negative July NFP print, the August preliminary reading will be closely watched for any further deterioration in expectations. The inflation expectations component will be particularly closely watched. If long-run expectations rise, markets will interpret that as support for the Fed maintaining a restrictive stance.

What traders are watching:

Higher than expected — Bullish USD. Suggests consumers are feeling more confident. Reduces pressure on the Fed to pivot.

Lower than expected — Bearish USD. Signals household confidence is deteriorating. Adds to the case for a more cautious Fed stance at Jackson Hole.

Calendar Snapshot

Date	Event	Currency	Time (GMT)
Tue 11 Aug	RBA Rate Decision and Statement on Monetary Policy	AUD	4:30 AM
Wed 12 Aug	Consumer Price Index	USD	12:30 PM
Thu 13 Aug	Producer Price Index	USD	12:30 PM
Fri 14 Aug	Retail Sales	USD	12:30 PM
Fri 14 Aug	University of Michigan Consumer Sentiment (preliminary)	USD	2:00 PM

A Quick Note on Risk

Economic data releases can cause sharp, fast moves in the market. Price can spike in both directions before settling. This week’s inflation data lands in the most sensitive window of the year, two weeks before Jackson Hole and six weeks before the September FOMC meeting. Make sure you understand how your FXIFY account drawdown rules work before you trade around major news events. For more on how funded traders approach volatile sessions, see our guides on trading styles for funded traders and how news events affect prop traders.