The week of July 7–11 is expected to be pivotal for global markets as the July 9 trade tariff deadline looms, with only a few U.S. trade agreements finalized and pressure mounting on key partners. Investor focus will also turn to the Federal Reserve’s meeting minutes following strong U.S. jobs data, which could shift expectations for future rate cuts. In the Asia-Pacific region, the Reserve Bank of Australia (RBA) is anticipated to lower rates again, while the Reserve Bank of New Zealand (RBNZ) is likely to hold steady after an aggressive easing cycle.
Meanwhile, Canadian employment figures will offer fresh insight into economic momentum in those regions. With trade uncertainty and central bank moves on the agenda, the week could bring notable market shifts. For additional insights into market movements, explore our educational hub at https://hub.onequity.com, where you can access updated financial data, analysis, and trading resources.
Key Points to Watch Out For
- The July 9 deadline for tariffs is approaching, while trade agreements remain incomplete.
- Fed minutes are expected after a strong employment report.
- The RBA is likely to cut rates; the RBNZ is expected to hold steady.
- UK GDP and Canadian employment data are also due.
The Final Stretch of Trade Negotiations
Three months have passed since President Trump postponed the implementation of reciprocal punitive tariffs, giving negotiators time to secure more favorable trade agreements with the United States’ main partners. As the Wednesday, July 9 deadline approaches, the U.S. has only finalized two trade deals—one with the UK and one with Vietnam—and has reached a formal truce with China, significantly reducing previously imposed triple-digit tariffs. Despite progress in talks with India, Japan, and South Korea, no formal agreements have yet been concluded. Surprisingly, negotiations with the European Union have gained momentum, and an agreement with Canada could also be finalized in the coming days. Even so, the likelihood of securing deals with all of the U.S.’s 18 major trading partners before the deadline appears slim. This raises the possibility of either extending negotiations or reinstating previously suspended tariffs. The most likely scenario is that President Trump will again threaten tariffs—possibly at higher levels than those proposed on “Liberation Day”—as a pressure tactic to extract last-minute concessions before granting any extension.
Implications for Markets and the U.S. Dollar Index
Market sentiment during the week will hinge on the number of finalized trade agreements. If only a small number of countries—excluding major economies like Japan, India, or the EU—reach deals, investor optimism may remain cautious. This could result in a slight rebound in risk assets but provide limited support for the U.S. dollar.
This would certainly help the US currency find stronger support in the market, even if that support is limited.
That said, the comments will set the tone for the week, as they will affect the behavior of the dollar in some way, and it is always interesting to see the different positions that the minutes may reveal.
The Federal Reserve in Focus in a Light Data Calendar
Investors will also be watching for any interest rate adjustments from the Federal Reserve. Although a rate cut in July now seems unlikely following a better-than-expected June nonfarm payrolls report, continued economic strength could dampen expectations for a cut in September as well. With no major U.S. economic data scheduled next week, attention will center on the minutes of the Fed’s June monetary policy meeting and limited public comments from FOMC members, all expected on Wednesday, July 9. If the tone appears hawkish, it could reinforce the recent rally in the U.S. dollar.
Reserve Bank of Australia Ready to Ease Again
The Reserve Bank of Australia, which has lagged other central banks in its easing cycle due to persistent domestic inflation, is expected to cut its official interest rate by 25 basis points at its meeting on Tuesday, July 8. Markets are pricing in at least two additional cuts this year. Investors will watch closely for signals from Governor Michele Bullock on whether future rate reductions will be more or less aggressive than expected. A notably dovish stance—especially given the Australian dollar’s rise against the U.S. dollar over the past four months—could trigger a short-term correction.
The RBNZ Is Expected to Pause After Its Aggressive Easing
In contrast to other central banks still weighing further stimulus, the Reserve Bank of New Zealand (RBNZ) has already taken a proactive stance, slashing its official cash rate by a cumulative 225 basis points over the past year. These six rate cuts were aimed at cushioning the economy against global headwinds and domestic challenges.
Now, with key indicators presenting a mixed picture—such as a steady unemployment rate of 5.1%, a stronger-than-expected GDP rebound in Q1, and inflation gradually approaching the 2.5% mark—the RBNZ appears to be nearing the end of its easing cycle. At its upcoming policy meeting on Wednesday, July 9, the central bank is widely expected to hold rates steady at 3.25%, with markets assigning a 20% probability to no change. However, speculation of one final 25-basis-point cut before year-end still lingers.
The RBNZ’s forward guidance will be crucial. A firm signal that the easing phase has concluded could bolster investor confidence and support the New Zealand dollar. On the other hand, any indication that further accommodation remains on the table may lead to renewed pressure on the kiwi, especially amid ongoing global uncertainty.
Conclusion
In Canada, investors will focus on the June employment report due Friday, July 11. Following a string of weak labor market data, another disappointing report could raise the likelihood of a rate cut from the Bank of Canada (BoC) later this month, currently estimated at 25%. Core inflation readings softened in May, giving the BoC some room to maneuver. If the labor market fails to show meaningful improvement and trade tensions with the U.S. continue, a rate cut—or at least a clear signal of one—could come as early as July. Fluctuations in the Canadian dollar are also likely to continue mirroring trends in the U.S. dollar.
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