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US – Labour data revision may force cut
The July labour market report upended the narrative of a solid labour market. The already weak headline figure of 73k jobs gained in July was dwarfed by the substantial revisions to the May and June figures, whose estimates declined by 125k and 133k respectively. This lowered the three month moving average from around 150k to 35k. This pace is well below even recent estimates of the ‘break-even rate,’ which would keep the unemployment rate constant, and indeed, it ticked up to 4.2%. In response, Trump fired the head of the responsible statistical agency and markets quickly priced in almost a full September rate cut. We don’t think the case is that clear.
Carbon Market Strategist - Carbon price paradoxes and policy puzzles
Carbon prices stabilized post-Israel-Iran conflict, with gas and carbon markets showing signs of decoupling. New EU-US tariffs may hinder European growth, but EU fiscal stimulus could drive recovery by 2026. Power emissions decreased, reducing allowance demand; bullish sentiment is back as September's surrender date approaches. CBAM is expected to start in 2026, leveling EU market fields; EU-UK market linkage may lower EUA prices. We anticipate stable carbon prices in Q3; fiscal stimulus may increase prices from 72 EUR/tCO2 to 82 EUR/tCO2 by Q2 2026.
Eurozone services disinflation continues; food inflation picking up
Headline HICP inflation surprised modestly to the upside in July, holding steady at the ECB’s 2% target, against our and consensus expectations for a move lower to 1.9%.
Further increase in business activity for Dutch manufacturing sector
The Nevi Dutch Manufacturing PMI rose further in July, from 51.2 to 51.9, in part reflecting a further increase in activity.
The Week Ahead - 4 - 15 August 2025
These are the Key Macro Events for the upcoming 2 weeks.
FOMC Watch - Growth moderates, inflation picks up, Fed on hold
Yesterday, the Fed kept its rates on hold, in line with broad expectations. The press release noted that both inflation and uncertainty remained elevated. It described growth as having moderated, potentially a dovish nod to the two dissenters, Christopher Waller and Michelle Bowman, who preferred to cut rates this meeting. We've previously written about public calls for cuts by these two Trump-appointed board members, and continue to see the statements as largely political, with Waller in contention for the Chair position next year. June's dot plot made it clear there were two other groups; a first camp that expects mild inflation impact or a further deterioration of the labour market, allowing for, or even requiring, two potential cuts this year, and a second camp that expects rates to stay on hold for the remainder of the year. The overall moderately hawkish press conference may suggest that the second camp is growing in size.
Gas Market Monitor - Market tightness is here to stay until 2026
In this edition: European gas prices show some stabilization post-Israel-Iran conflict… Peace talks between Russia and Ukraine could affect LNG flows and prices, with risks from US-imposed secondary tariffs… Lower European gas demand and industrial constraints persist; EU-US tariff deal will help to reduce market uncertainty… Tight LNG market remains through 2025; relief is anticipated in 2026 with new US and Canadian LNG supply… TTF prices are anticipated to maintain current levels in Q3, with an expected rise during the heating season, followed by a gradual decrease in 2026.
Eurozone Q2 GDP - Trade war collides with recovering domestic demand
Eurozone Q2 GDP surprised to the upside at 0.1% q/q, following growth of 0.6% in Q1. The Q2 outturn was well above our forecast for a small contraction (-0.2%) and a bit above consensus (0.0%). The miss on our part was largely driven by Ireland, but France also surprised to the upside (see below).
An unbalanced US-EU trade deal, given the EU’s weak hand
The US and the EU signed a trade deal last night that watered down the significant rise in tariffs that was due on 1 August, at which point the US administration was set to increase tariffs from the current 10% to 30%.
The Week Ahead - 28 July - 1 August 2025
These are the Key Macro Events for the upcoming week.