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Oil rig count drops by five, gas rigs rise by two as crude oil prices fall to $67.27
Baker Hughes reported that the number of oil rigs dropped by five, bringing the total down to 410. Meanwhile, gas rigs went up by two, reaching a total of 124. Overall, there has been a decrease of two rigs, making the combined count 540.
Crude oil prices fell sharply, losing two dollars to settle at $67.27. The lowest price of the day was $67.05. The hourly chart indicates that prices are testing the 200-hour moving average at $67.08. Earlier, prices dipped below the 100-hour moving average of $68.60.
Recent U.S. employment data indicates a shift toward rising unemployment and possible Federal Reserve adjustments.
Concerns about inflation are growing, but job growth is slowing down, raising worries about a possible recession. The U.S. jobs report for July has shifted attention to the labor market.
The President of the Atlanta Fed has noted this shift and suggested a reevaluation of Fed policy. The report highlights a slowdown in job growth and wider employment challenges.
July Jobs Report Results
Nonfarm payrolls rose by just 73,000 in July, which is lower than the expected 110,000. The unemployment rate increased to 4.2%. This drop in job data raises the likelihood of a rate cut by the Fed, now estimated at 90% for September. Fed Chair Powell mentioned that two more job reports will be available before the meeting in September. There are divisions within the Federal Reserve Board about the future of policy. Two dissenting votes reflect these internal disagreements. Treasury yields have fallen, and the dollar has weakened due to expectations for easier monetary policy. Gold prices surged nearly 2%. Job growth is now focused more on healthcare, but federal employment decreased by 12,000. Long-term unemployment has risen, and the labor force participation rate has dropped to 62.2%.Market Strategy Amid Uncertainty
There are ongoing risks from tariffs and other pressures. Revisions to labor market data show 258,000 fewer jobs for May and June, indicating sharp declines. Given the jobs report from August 1, 2025, we need to quickly change our strategy to account for a more aggressive Fed rate cut. The significant disappointment in the report and the downward revisions strongly suggest a rate cut is forthcoming in September. We can expect continued downward pressure on short-term Treasury yields, making bets on lower interest rates very appealing. Market reactions support this view, with the chance of a rate cut in September, as per the CME FedWatch Tool, now at 90%. The 2-year Treasury yield fell over 20 basis points, the biggest drop since the banking issues of 2023, indicating a major policy shift. This signals a need to adjust our positions sensitive to short-term rates. For equity derivatives, the S&P 500 breaking below its 200-hour moving average is a strong bearish indicator, overshadowing any positive news from a potential rate cut. The underlying economic weakness is now the main concern, so we should consider buying VIX call options or S&P 500 put options. These options will help protect against further declines due to recession fears in the weeks ahead. In currency and commodity markets, trends are becoming clearer. The U.S. dollar is likely to keep weakening, so we’re planning to short dollar index futures. As a result, gold has emerged as a key safe-haven asset, and its recent rise suggests that long positions in gold futures will likely remain profitable. The combination of ongoing wage growth and a struggling job market creates uncertainty, meaning volatility can work to our advantage. The public divisions within the Fed board also add unpredictability as we approach the September meeting. This situation is suitable for using options strategies like straddles on major indices, which can benefit from significant price movements in either direction. We can take lessons from the Fed’s actions in 2019, which could serve as a guide for the current market. Back then, the central bank started cutting rates amid global slowdown concerns, providing support for assets even when economic data was weak. This history suggests that while we need to be cautious about the economy, assets that thrive in a lower-rate environment could still perform well. Create your live VT Markets account and start trading now.The S&P Global Manufacturing PMI in the United States reached 49.8, surpassing forecasts of 49.5.
The S&P Global Manufacturing PMI for the United States was 49.8 in July, which was better than the expected 49.5. Although this number is above predictions, it reflects challenges in the manufacturing sector.
The EUR/USD pair jumped above 1.1550 after weak US employment numbers and ISM Manufacturing PMI data. Similarly, GBP/USD turned positive above 1.3250 after six days of decline.
Gold prices climbed to $3,350, thanks to lower US Treasury bond yields and a refreshed market outlook on the Federal Reserve’s rate plans. In the crypto market, Bitcoin dipped below $115,000, indicating turbulence amid market volatility.
In Europe, the economy appears strong, boosted by an EU-US agreement and rising spending in Germany. However, there are concerns about potential interest rate cuts from the European Central Bank (ECB) in late 2025 or early 2026.
The article highlights the risks of foreign exchange trading. Leverage can work for or against traders, so it’s essential to understand your investment goals and risk tolerance. It’s wise to consult independent financial advisors for a clearer picture of the risks in forex trading.
Data from July 2025 shows a cooling US economy. The Manufacturing PMI at 49.8 is below the 50-point mark, signaling contraction for the first time since late 2024. This, along with a recent Non-Farm Payrolls report showing only 95,000 new jobs instead of the expected 180,000, suggests a slowdown.
This economic weakness is pressuring the US dollar, setting us up for its further decline in the near future. The EUR/USD breaking above 1.1550 is the highest since late 2024, while GBP/USD is showing a strong rebound. Strategies benefiting from a weakening dollar, such as buying call options on the euro or pound, look promising.
Gold’s rise to $3,350 indicates a flight to safety, a trend likely to continue amid ongoing economic uncertainty. The drop in the 10-year US Treasury yield to 2.85%, its lowest this year, makes non-yielding gold more appealing. Gold-backed ETFs also saw over $15 billion in inflows last month, signaling strong institutional confidence.
On the other hand, we should be cautious with riskier assets like cryptocurrency. Bitcoin’s drop below $115,000 reflects a significant 20% decline from its June 2025 peak, suggesting traders are pulling back from speculative markets. It might be wise to consider bearish strategies on crypto assets or avoid them altogether for now.
The European economy shows more stability, partly due to the new ‘Atlantic Digital and Trade Pact,’ which benefits export-driven countries like Germany. This relative strength supports the euro’s rise against the dollar. However, we must keep in mind that futures markets are anticipating a 40% chance of an ECB rate cut before March 2026, which could create challenges ahead.
The Manufacturing PMI in Canada increased to 46.1 from 45.6.
The S&P Global Manufacturing PMI for Canada is at 46.1 for July, up from 45.6. This still indicates that the Canadian manufacturing sector is facing ongoing difficulties.
The EUR/USD pair has risen above 1.1550 after disappointing US non-farm payrolls and ISM Manufacturing PMI data, which weakened the US Dollar. Meanwhile, GBP/USD has also increased, surpassing 1.3250, as a result of a weaker USD and poor US employment figures.
Gold prices hit a weekly high near $3,350, benefiting from a decline in US Treasury bond yields. This shift occurs as the market adjusts its views on the Federal Reserve’s rate decisions after weaker US economic data.
In the crypto market, Bitcoin had a strong July but has fallen below $115,000. This drop is due to increased selling pressure and concerns about further declines.
In the euro area, economic stability continues due to the EU-US deal and increased spending in Germany. However, a final rate cut is still on the table, depending on wage performance.
Given the poor US jobs and manufacturing data from July 2025, we expect the US Dollar to stay under pressure. Historically, weak reports like the notable non-farm payroll miss in May 2021 have led to long periods of dollar weakness. Thus, we may explore options to bet against the dollar in the next few weeks.
The rise in EUR/USD above 1.1550 and GBP/USD above 1.3250 marks important breakouts driven by the dollar’s decline. We plan to buy call options on both pairs to take advantage of this upward momentum. However, we should be cautious as talks from the European Central Bank regarding a potential rate cut might limit the Euro’s gains.
The drop in US Treasury yields makes gold more appealing, and we expect its price to challenge the $3,350 level again. This situation is similar to the early 2020s when low interest rates drove gold to record highs. We believe that buying gold futures or call options is a solid trade as long as the market expects the Federal Reserve to hold rates steady.
Despite overall market optimism, we are cautious about Bitcoin after its drop below the crucial $115,000 level. This decline appears to be profit-taking, similar to sharp pullbacks during the 2021 bull market, which often led to deeper corrections. We may consider buying put options to protect against further sell-offs.
Canada’s manufacturing PMI, though slightly improved, still shows contraction at 46.1, close to mid-2024 levels that indicated economic slowdown. This weakness in the Canadian economy leaves its currency vulnerable, particularly against a strengthening Euro. We would avoid being long the Canadian dollar and may look for chances to short it against the Euro.
Major European indices end the week lower due to global economic concerns and tariff news
European indices fell sharply due to worries about growth, tariffs, and inflation affecting global stocks. The German DAX dropped 2.66%, France’s CAC fell 2.91%, the UK’s FTSE 100 decreased by 0.70%, Spain’s Ibex declined 1.88%, and Italy’s FTSE MIB fell by 2.55%. Over the week, the German DAX lost 3.27%, France’s CAC lost 3.68%, the UK’s FTSE 100 fell by 0.57%, Spain’s Ibex decreased 0.78%, and Italy’s FTSE MIB dropped by 1.92%.
Most European benchmark 10-year yields ended lower. Switzerland’s yield fell by 5.85%, the UK’s by 1.03%, Germany’s by 0.78%, Spain’s by 0.21%, and France’s by 0.15%. Italy’s yield increased by 0.25%. In the U.S., indices were also down, but not at their lowest. The Dow decreased by 0.97%, S&P dropped by 1.16%, NASDAQ fell by 1.63%, and Russell 2000 went down by 1.51%.
US Market and Commodities
U.S. yields dropped significantly as the market saw a nearly 90% chance of a rate cut in September. The 2-year yield fell by 22 basis points, 5-year by 16.3, 10-year by 12.2, and 30-year by 7.1. In commodities, crude oil fell to $67.43, gold rose by 1.6%, silver increased to $36.85, and copper gained 1.61%. Bitcoin decreased by $200, reaching $115,542. The steep drop in European stocks, particularly the German DAX and French CAC hitting their lowest points since March 2025, shows significant fear in the market. This is reflected in the CBOE Volatility Index (VIX), which has risen to over 28, indicating high market stress. This may prompt investors to buy put options on indices like the Euro Stoxx 50 and S&P 500 to bet on further declines. The sharp drop in U.S. bond yields is noteworthy, driven by a surprisingly weak July 2025 jobs report that fell short of expectations. With a 90% chance of a Federal Reserve rate cut in September, traders might consider going long on interest rate futures to capitalize on this trend. This situation parallels the central bank shifts seen in late 2018 and 2019, leading to a significant bond rally.Commodities and Market Strategies
Crude oil dropping below its 200-day moving average of $67.98 is a major bearish sign for the global economy. This follows recent data showing China’s Caixin Manufacturing PMI for July 2025 fell to 48.5, indicating a contraction and raising concerns about demand. Selling crude futures or buying puts seems like a wise response to ongoing growth fears. In this risk-off climate, gold is proving to be a safe haven with a strong rally to $3,342. The decrease in real yields, as bond yields drop faster than inflation expectations, makes holding non-yielding gold more appealing for institutional investors. We recommend buying call options on gold or gold-backed ETFs to gain exposure to this safe haven. Expectations of a U.S. rate cut may weaken the dollar, creating opportunities in currency derivatives against the euro or yen. Meanwhile, Bitcoin’s decline suggests it is being seen as a high-risk asset rather than a digital haven during this downturn. Traders should approach crypto assets with caution until the market stabilizes. Create your live VT Markets account and start trading now.Gold prices soar to $3,350 after disappointing US NFP data raises Fed rate cut expectations
Gold is holding steady around $3,300 as the markets await the US Nonfarm Payrolls (NFP) report. The US Dollar remains strong due to a hawkish Federal Reserve and positive economic data, while new trade tensions from US tariffs add some support for gold.
Gold is trading close to $3,300. Its gains are limited by the strong US Dollar after the Federal Reserve decided to keep interest rates steady and indicated future increases based on economic performance. Positive US economic indicators, such as GDP growth and a solid job market, continue to boost the dollar, affecting gold prices.
The Impact Of The NFP Report
Everyone is watching the NFP report closely, as it will impact gold and expectations for interest rates. While gold bounced back on Thursday, it struggled to hold its gains due to the dollar’s strength and is trading below $3,300, although trade tensions are providing some support. President Trump’s executive order has imposed tariffs between 10% and 41% on 70 countries, starting August 7. This heightens trade tensions, especially since tariff discussions with China and Mexico are still ongoing. Gold and Treasury yields are under pressure from strong US economic data. The likelihood of a rate cut in September has dropped to 39%, while the probability of a 25 basis point cut in October is now at 47%. Gold remains in a holding pattern, awaiting the NFP data, with support and resistance levels defining its trading range. Gold’s technical indicators show market uncertainty, with prices consolidating within a tight range. The NFP report could shift gold’s direction, as its effect on the US Dollar will influence market sentiment. Gold is currently caught in a tug-of-war around the $3,300 mark. The strong US dollar, driven by a confident Federal Reserve, is pulling prices down. In contrast, the threat of new tariffs is providing some upward pressure. The market is anxious about the upcoming Nonfarm Payrolls (NFP) report, which could break this stalemate.Potential Market Moves After The NFP Report
If today’s NFP report reveals job growth significantly above the expected 190,000, we anticipate a notable strengthening of the US Dollar. This would support the Fed’s hawkish approach and could push gold prices below the $3,280 support level. Traders may view this as an opportunity to consider bearish strategies, such as buying put options in the coming weeks. Conversely, a weak jobs report would challenge the view of a strong economy and increase the likelihood of a rate cut in September. This could weaken the dollar and allow gold to break through the $3,325 resistance level, making call options appealing for potential upside. We observed a similar trend in early 2024, where signs of a slowing job market consistently led to increases in gold prices. Additionally, we must keep the new tariffs starting August 7 in mind. These create a foundation of support for gold, as uncertainty usually boosts its appeal as a safe haven. Historical trade disputes show that tariff announcements often led to short-term spikes in gold prices, even amid strong economic data. This environment of conflicting influences suggests that volatility is likely to increase. The Gold Volatility Index (GVZ) is already up to 18.5, indicating that options traders are bracing for a significant price movement in either direction. Given this setup, strategies that benefit from volatility, such as a long straddle, may be worth considering as we approach the NFP release and the tariff deadline. Once the dust settles from the jobs report, we will quickly shift our focus to how the market adjusts expectations for a Fed decision on rates. We must watch whether the current 39% chance of a September rate cut falls or rises. This shift in market sentiment will guide our derivative trading strategies for the rest of August. Create your live VT Markets account and start trading now.US Dollar Index falls near 99.00 as the week comes to a close
The US Dollar bounced back by the end of the week after recent losses. The US Dollar Index finished near 99.00, influenced by a disappointing US Nonfarm Payrolls report that showed only 73,000 jobs were added in July.
The US unemployment rate ticked up to 4.2%, while average hourly earnings grew by 3.9% annually. These economic signals suggest possible interest rate cuts by the Federal Reserve in September.
US Treasury Yields
US Treasury yields dropped, reaching their lowest points in weeks for various maturities. Now, attention will turn to the upcoming ISM Manufacturing PMI and U-Mich Consumer Sentiment reports. Technically speaking, if the US Dollar Index (DXY) continues to fall, it could hit a multi-year low of 96.37 from July. On the other hand, if it rises, it could test the 100.25 level from early August. The US Dollar serves as the official currency of the United States and has been the world’s reserve currency since World War II. The Federal Reserve plays a big role in influencing the Dollar through monetary policy, adjusting interest rates based on inflation and employment data. Quantitative easing and tightening also play a significant role in the Dollar’s strength, affecting liquidity in financial markets.Options And Derivatives
Given the weak jobs report for July 2025, we expect the US Dollar to trend lower. With only 73,000 jobs added, the chances of a Federal Reserve rate cut in September increase, which would weaken the dollar’s yield advantage. This changes the market landscape that has been stable for the past year. This uncertainty is evident in the options market. The VIX index, which measures stock market volatility, has risen from around 14 to over 18 in the last week. Historically, a sudden slowdown in the labor market combined with persistent inflation results in higher volatility. This indicates that holding a short position may be risky, and using derivatives to manage risk is a smarter strategy. For derivative traders, buying put options on the US Dollar Index (DXY) could be a good move in the coming weeks. This strategy allows us to prepare for a decline toward the July low of 96.37 while keeping our potential loss limited to the amount we pay for the options. We should focus on September expiration dates to benefit from potential changes after the Fed’s next meeting. Looking back to the summer of 2019, we see a similar situation. Weak economic data led the Fed to start cutting rates after a series of hikes, resulting in ongoing dollar weakness and increased volatility— a pattern that might be repeating now. Recent Commitment of Traders reports indicate that large investors are starting to take net short positions against the dollar, reflecting this shift in sentiment. Another way to express this outlook is through currency pairs sensitive to interest rate changes, like the dollar against the Japanese yen. With US Treasury yields at multi-week lows, the incentive to hold dollars over yen is decreasing. Thus, we consider shorting USD/JPY futures or buying puts on that pair as a reasonable alternative strategy. As we look ahead, we must closely monitor the upcoming ISM Manufacturing PMI and University of Michigan Consumer Sentiment reports. Weakness in these figures would strengthen the bearish outlook for the dollar. However, unexpectedly strong data could lead to a sharp reversal, making it wise to use options to limit our risk. Create your live VT Markets account and start trading now.The Atlanta Fed lowers Q3 growth forecast to 2.1% due to weak economic data
The Atlanta Fed GDPNow model has lowered its growth estimate for the third quarter from 2.3% to 2.1%. This change comes after new economic data showed weaker forecasts for personal consumption and private fixed investment.
– Growth projections for personal consumption dropped from 1.9% to 1.6%.
– Forecasts for private fixed investment went down from 2.5% to 2.0%.
On a positive note, the anticipated contribution of inventory investment to GDP growth increased from 0.63 percentage points to 0.74 percentage points.
Real-Time Estimate of GDP Growth
The GDPNow model provides real-time GDP growth estimates and updates frequently. The next update is set for Tuesday, August 5. This estimate incorporates data from various sources, including the US Bureau of Labor Statistics and the US Census Bureau. Today’s data shows the Q3 growth forecast is now 2.1%. This slowdown is directly linked to weaker consumer spending and business investment. We will continue to monitor this trend in the coming weeks. This revision follows several disappointing reports. The July jobs report revealed the economy added only 155,000 jobs, significantly fewer than the expected 190,000. Additionally, the ISM Manufacturing index dipped to 50.2, just above the expansion threshold. July’s retail sales remained flat, indicating a cautious consumer outlook.Market Volatility and Investment Strategies
Given this uncertainty, we expect market volatility to increase from its current low levels. The VIX, which measures market fear, has already risen to around 18, and option premiums are likely to rise. This suggests it’s a good time to consider buying protection or taking positions that benefit from larger price fluctuations. We recommend defensive positions in the stock market. Buying put options on the S&P 500 or Nasdaq 100 can provide a direct hedge against a potential market downturn. This approach is similar to strategies we used during slowdowns in 2019 and 2022, where proactive defense paid off. Slower growth also makes near-term interest rate hikes from the Federal Reserve less likely. We see an opportunity in interest rate derivatives, particularly through call options on long-term bond ETFs like TLT. This strategy would benefit if bond prices rise as yields fall due to a weaker economic outlook. Sector-wise, defensive industries are likely to perform better than cyclical ones in this environment. We are looking into buying puts on consumer discretionary ETFs while simultaneously considering calls on consumer staples and utilities. This strategy aims to create a relative value position that could do well even if the market remains stagnant. Create your live VT Markets account and start trading now.US government turmoil delays export approvals, negatively impacting AI chip shipments and exporters
Thousands of export approvals are facing delays due to confusion within the US government, impacting US exporters. The US Commerce Department is reportedly dealing with its worst backlog in over thirty years.
Nvidia’s AI chips are particularly affected, with no new export licenses issued this week. This situation jeopardizes billions of dollars in AI chip orders.
Deeper Issues Within The Department
These ongoing export licensing delays highlight deeper problems within the department. It’s unclear how long this backlog will impact US exports. This development brings significant uncertainty to the tech sector in the coming weeks. We can expect increased implied volatility, making options pricier yet more effective. Traders should brace for sudden price swings driven by headlines instead of smooth trends. Nvidia is at the heart of this situation, having already seen its stock drop 4% in the last two trading days of July 2025. Since nearly half of Nvidia’s revenue last year came from international sales, buying puts with September 2025 expirations seems like a smart way to protect against further losses if these licensing delays continue. This issue extends beyond Nvidia; it affects the entire sector. The VanEck Semiconductor ETF (SOXX) has already declined by 3.5% since its peak in July, indicating that the market is starting to factor in this risk. This shows the negative sentiment is spreading beyond just one company.Market Precedents And Strategy
We’ve seen similar situations before during the 2018-2019 trade disputes. At that time, chip stocks experienced quick corrections of 10-15% based on tariff-related news, even if orders were only delayed, not canceled. History suggests the market tends to sell first and ask questions later. Given the unpredictable nature of the situation, any positive news could lead to a rapid recovery, making shorting stocks risky. Using defined-risk strategies like put spreads allows us to bet on a decline while limiting our maximum loss. This backlog is a clear obstacle for the Nasdaq 100, considering its heavy tech focus. The VIX has already risen from its summer low near 14 to over 18 this week, indicating that traders are actively seeking protection. Watch for potential weakness in Nasdaq futures (NQ) as a broader reflection of this trend. Create your live VT Markets account and start trading now.Euro rises significantly against the dollar following disappointing US nonfarm payrolls data
The Euro surged against the US Dollar after a disappointing jobs report in July. The Euro rose nearly 150 pips, trading at about 1.1556, which is a 1.20% increase for the day, following earlier lows.
The US Dollar Index fell to 99.3 from a two-month high of 100.26. The Nonfarm Payrolls report showed only 73,000 new jobs in July, much lower than the expected 110,000. June’s numbers were also revised down, dropping from 147,000 to 14,000. The Unemployment Rate went up to 4.2%.
Wage growth remained steady. Average Hourly Earnings increased by 0.3% from the previous month and by 3.9% from a year ago. This was slightly above the forecast of 3.8% and in line with past levels.
Market expectations for a rate cut in September jumped to 67.1%, up from 37%. Recent comments from Fed Chair Jerome Powell might cool those hopes. Now, attention shifts to the July ISM Manufacturing PMI, expected to decrease to 49.5 from 49.0.
Given the strong market reaction to the jobs data, we expect increased volatility in the coming weeks. We should think about strategies that benefit from large price movements, like buying options straddles on the EUR/USD pair. This will allow us to gain whether the Euro climbs further or drops back down due to new information.
For those who want to take a position, there’s a clear opportunity to bet against the US Dollar. Purchasing call options on the EUR/USD offers potential gains with limited risk, which is smart given the current uncertainty. This perspective is backed by recent comments from European Central Bank officials in July 2025, who seem more inclined to keep interest rates stable, differing from the Fed’s approach.
We’re looking at past patterns for insight, and this situation feels similar to what we saw in 2025. In the spring of 2024, disappointing US economic reports led to a significant shift from the Federal Reserve, causing the dollar to weaken against other major currencies for several months.
According to the latest Commitment of Traders report from late July 2025, large speculators were already cutting back on their long positions in the US Dollar, indicating we are in line with institutional trends. The EUR/USD breaking above the 1.1500 level is a key moment, as this level served as major resistance in the second quarter of 2025. We now see it as a potential support level for the pair.
For those with long positions in the dollar, it’s important to protect against further declines. Buying put options on the US Dollar Index can secure profits and minimize losses ahead of the September Fed meeting. Everyone is watching the upcoming ISM Manufacturing data closely, which will either confirm the new economic weakness or trigger a strong rebound in the dollar.
