Mary Daly, the President of the Federal Reserve Bank of San Francisco, is preparing to speak to an audience. She recently showed openness to the idea of a rate cut, suggesting that two cuts by the Federal Open Market Committee (FOMC) could be appropriate in 2025. While today’s agenda features crucial data points, the Australian trade balance is currently less significant. Instead, more focus is on the inflation expectations data from the Reserve Bank of New Zealand (RBNZ); a rate cut from them is expected on August 20. This expectation is backed by the latest labor market data from New Zealand.

Economic Calendar Overview

Today’s economic calendar highlights several key data points. All times are in GMT, with figures showing previous results and median expected consensus where applicable. As of August 6, 2025, Mary Daly’s remarks from the Federal Reserve are a clear indication of market direction. When a high-ranking official like Daly refers to two possible rate cuts this year, it grabs our attention. This marks a notable shift towards a more dovish approach from the central bank compared to earlier stances. This change aligns with recent economic data, which indicates a trend of disinflation without a major economic downturn. The core PCE, the Fed’s preferred measure of inflation, has cooled to 2.5% as of June 2025, moving closer to the 2% goal. Additionally, the jobs report for July 2025 showed a softer labor market, with payrolls increasing by only 150,000 and unemployment rising to 4.1%.

Opportunities in Derivatives Trading

For derivatives traders, the upcoming weeks present opportunities to position for lower interest rates in the U.S. This involves looking into options and futures contracts that will increase in value as the chances for a Fed rate cut go up. Taking long positions in short-term interest rate futures, such as those tied to SOFR, could yield profits as their prices rise when yields drop. This climate also favors equity markets since lower borrowing costs tend to enhance corporate earnings and boost stock valuations. We should consider S&P 500 and Nasdaq 100 index call options to take advantage of potential gains. This scenario echoes the market’s response in 2019 when the Fed shifted from raising to cutting rates, triggering a strong rally in risk assets. In addition, the situation in New Zealand presents a timely opportunity as we approach the RBNZ’s meeting on August 20. Weak labor market data has reinforced expectations of a rate cut, making it feel almost certain. Supporting data shows that New Zealand’s unemployment rate for the second quarter of 2025 rose to 4.5%, while quarterly CPI inflation dropped to 3.8%. These numbers provide the RBNZ with a clear path to start easing policy to support the slowing economy. The upcoming inflation expectations data is unlikely to alter this course. Thus, shorting the New Zealand dollar becomes an appealing trade, especially since its central bank looks poised to cut rates sooner than others. We can utilize FX options to bet on a decline of the NZD against other currencies. For example, buying NZD/USD puts could be an effective way to benefit from this anticipated policy shift. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now