Weekly Market Preview: What’s Moving the Markets This Week (3–7 August)

Last week delivered one of the most event-heavy stretches of the year. Three central bank decisions, Core PCE, Australian quarterly CPI, and Canada GDP all landed within four trading days. Markets processed all of it, and did not like what they heard from the Fed.

This week shifts the focus entirely to the US labour market. Four labour-related releases land between Tuesday and Friday, culminating in the July Non-Farm Payrolls report on Friday morning. With the Fed’s September meeting now live at over 70% probability of a hike, every jobs data point this week feeds directly into that decision.

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

What Happened Last Week

Fed holds 9-3: the most divided FOMC vote since 2016

The FOMC voted 9-3 to hold the federal funds rate at 3.50–3.75% on July 29, marking the fifth consecutive hold. The headline decision matched expectations. The vote breakdown did not. Three regional presidents, Cleveland’s Beth Hammack, Minneapolis’s Neel Kashkari, and Dallas’s Lorie Logan, all voted for an immediate 25 basis point hike. Three hawkish dissents in the same direction have not happened since September 2016.

Fed Chair Kevin Warsh told the press conference the committee will not hesitate to act to restore price stability, while stressing the Fed is avoiding forward guidance and remains data-dependent. The statement was almost identical to June’s, providing no signal on timing. Markets sold off sharply. The Dow Jones Industrial Average fell 1,153 points, or 2.19%, its worst session since April 2025. The S&P 500 dropped 1.52% and the Nasdaq fell 1.74%. The 30-year Treasury yield hit its highest level since 2007, rising more than 9 basis points to 5.19%.

After the decision, CME FedWatch priced a 72.3% probability of a September rate hike, up from around 35% before the meeting. Warsh is expected to speak at Jackson Hole on August 27-29. That speech is now the next major monetary policy catalyst for USD direction.

Core PCE softens: still well above target

The Federal Reserve’s preferred inflation measure came in softer than expected. Core PCE rose just 0.1% month-on-month in June and 3.3% year-on-year, one-tenth below May’s annual reading. Headline PCE fell 0.1% on the month and came in at 3.7% year-on-year, down sharply from 4.1% in May, driven by falling energy prices following the US-Iran interim ceasefire. Real consumer spending rose 0.4% in June. Core inflation remains at 3.3%, well above the Fed’s 2% target, giving the three dissenting FOMC members a clear argument for September.

Bank of England: vote split widens to 6-3

The MPC voted 6-3 to hold Bank Rate at 3.75% on July 30. Three members, Megan Greene, Catherine Mann, and Huw Pill, voted to increase to 4.00%, one more hawkish dissent than June’s 7-2. Governor Bailey noted that inflation has fallen faster than expected to 2.6%, but the Bank’s central projection shows CPI peaking at around 3.2% in Q4 2026. The next BoE decision is September 17.

BOJ holds at 1%: yen intervention shocked the market

The Bank of Japan held its policy rate at 1.00% in an 8-1 decision on July 31. The BOJ warned that core inflation is likely to accelerate clearly above 2% from the second half of fiscal 2026. The bigger story was Tokyo’s apparent yen intervention overnight, with USD/JPY trading near 163 before rallying sharply to as low as 157.96. Most economists now expect one more 25 basis point hike to 1.25% before year-end, with September and October flagged as the most likely windows.

This Week’s Events

Monday, 3 August — ISM Manufacturing PMI (USD) | 3:00 PM GMT

The ISM Manufacturing PMI is the first major data point of the new month and the first read on how the US manufacturing sector performed in July. It is released on the first business day of each month at 10:00 AM ET.

The ISM Manufacturing PMI came in at 53.3 in June, down from 54.0 in May, marking continued expansion but at a slower pace. The S&P Global preliminary July manufacturing PMI edged down to 53.8 from 53.9 in June, with production growth slowing and new orders expanding at the weakest rate in four months. The 50-point mark is the dividing line. Above it signals expansion, below it signals contraction.

Given the Fed’s heightened sensitivity to economic data following last week’s 9-3 vote split, a manufacturing PMI that surprises to the upside would reinforce the hawkish case for September. A reading below 50 would be the first contraction in over a year and would immediately shift market tone.

What traders are watching:

Above 50.0 — Bullish USD. The industrial sector is expanding. Reduces pressure on the Fed to hold at September.

Below 50.0 — Bearish USD. A contraction signal would increase expectations the Fed stays on hold and weaken the Dollar.

Tuesday, 4 August — JOLTS Job Openings (USD) | 3:00 PM GMT

The Job Openings and Labor Turnover Survey measures how many unfilled positions exist across the US economy. It is a leading indicator for Friday’s NFP report. If job openings are falling, it signals labour demand is cooling before it shows up in the payrolls data.

Job openings hit a two-year high in May, coming in at 7.618 million, well above forecasts of 6.88 million. For June, economists expect job openings to come in slightly lower month-on-month. A meaningful decline would raise concern about Friday’s payrolls figure. A surprise hold or increase would support the view that the labour market remains resilient despite five consecutive Fed holds.

What traders are watching:

Higher than expected — Bullish USD. The labour market is still running hot. Supports the case for a September hike.

Lower than expected — Bearish USD. Signals hiring demand is cooling. Reduces the urgency of a September move.

Wednesday, 5 August — ADP Non-Farm Employment Change (USD) | 12:15 PM GMT

ADP releases its private sector jobs estimate for July. This is the warm-up act for Friday’s official NFP. ADP does not always match the BLS number closely, but a large deviation in either direction moves markets.

June’s official NFP came in at just 57,000, well below the 115,000 consensus forecast and the weakest result since January. May’s figure was also revised down from 172,000 to 129,000. The disappointing June print raises the stakes for Friday considerably. ADP’s July estimate will provide the first directional signal on whether July recovered or continued to soften.

What traders are watching:

Higher than expected — Bullish USD. Builds confidence that Friday’s NFP will be stronger. Dollar supported.

Lower than expected — Bearish USD. Raises concern that Friday’s official number could disappoint again. Dollar weakens ahead of the release.

Wednesday, 5 August — ISM Services PMI (USD) | 3:00 PM GMT

The ISM Services PMI covers the largest part of the US economy. Services accounts for roughly 80% of US economic output, covering sectors such as technology, banking, retail, and healthcare. A reading above 50 signals expansion.

The ISM Services PMI came in at 53.3 in June, according to Moody’s Analytics. The services sector has remained in expansion territory for over 12 consecutive months. Given that consumer spending rose 0.4% in June in real terms, the services sector is likely still holding up. However, the June NFP weakness, particularly the 507,000 drop in household employment, introduces some uncertainty about whether services activity can sustain the same pace into July.

What traders are watching:

Above 50.0 — Bullish USD. The core of the economy is still growing. Reduces pressure on the Fed to hold.

Below 50.0 — Bearish USD. A contraction in services would be a significant warning signal for the broader economy and ease September hike expectations substantially.

Friday, 7 August — Non-Farm Payrolls and Unemployment Rate (USD) | 12:30 PM GMT

The most closely watched data release in forex trading. The BLS publishes the July employment situation report at 8:30 AM ET on Friday. This is the final major piece of data before the Fed’s September 15-16 meeting.

June NFP came in at 57,000, the weakest reading since January and well below the 115,000 consensus. April was revised down to 148,000 from 179,000, and May was revised down to 129,000 from 172,000. Combined April and May revisions subtracted 74,000 jobs from previously reported figures. The unemployment rate fell to 4.2% in June, though largely due to a 0.3 percentage point drop in the labour force participation rate rather than genuine job growth.

For July, FXStreet reports the market consensus is for 91,000 jobs added, with the unemployment rate expected to edge up to 4.3%. Average hourly earnings will also be closely watched. Any acceleration above the current 3.5% year-on-year pace would add to the inflation case for a September hike.

With 72.3% September hike probability already priced in following last week’s 9-3 FOMC split, the stakes could not be higher. A strong July NFP print would validate that pricing. A weak print, particularly below 57,000 or another downward revision cycle, would rapidly unwind those expectations.

What traders are watching:

High jobs / low unemployment — Bullish USD. A resilient labour market validates the September hike case. Dollar strengthens across major pairs.

Low jobs / high unemployment — Bearish USD. Signals potential weakness in the US economy. September hike expectations ease and the Dollar weakens.

Calendar Snapshot

Date	Event	Currency	Time (GMT)
Mon 3 Aug	ISM Manufacturing PMI	USD	3:00 PM
Tue 4 Aug	JOLTS Job Openings	USD	3:00 PM
Wed 5 Aug	ADP Non-Farm Employment Change	USD	12:15 PM
Wed 5 Aug	ISM Services PMI	USD	3:00 PM
Fri 7 Aug	Non-Farm Payrolls	USD	12:30 PM
Fri 7 Aug	Unemployment Rate	USD	12:30 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 the stakes are particularly high given the Fed’s September meeting is live at over 70% probability and every labour market reading feeds directly into that decision. 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.