Harmovest Capital | Key Market Focus This Week

This week, the market will focus on key U.S. economic data and signals from the Federal Reserve.

Following the release of U.S. CPI, PPI, and retail sales data last week, market expectations surrounding inflation and economic growth have shifted. This week, attention will turn to the Federal Reserve‘s July FOMC Meeting Minutes, U.S. housing data, initial jobless claims, the Philadelphia Fed Manufacturing Index, and August PMI data to assess whether the U.S. economy is continuing to cool and to further evaluate the Fed’s rate policy outlook for September.

Key Events to Watch This Week

• Federal Reserve July FOMC Meeting Minutes

• U.S. Housing Starts and Building Permits

• U.S. Industrial Production

• U.S. Initial Jobless Claims

• Philadelphia Fed Manufacturing Index

• U.S. August Manufacturing and Services PMI

Among these, the FOMC Meeting Minutes released on Wednesday will be one of the most important policy signals of the week. Markets will closely examine Fed officials views on inflation, the labor market, and the potential direction of interest rates in September.

Market Outlook for the Week

U.S. inflation data released last week showed signs of moderation, with PPI remaining unchanged month-on-month, while retail sales unexpectedly declined and consumer sentiment weakened.

These developments have further reduced market expectations for a September rate hike and placed some pressure on the U.S. dollar. Short-term U.S. Treasury yields have also been affected, while expectations for the Fed to keep interest rates unchanged in September have increased.

Overall, the key market dynamic this week is that continued signs of cooling in the U.S. economy could further reduce expectations for a September rate hike, limiting the upside potential of the U.S. dollar and providing some support for gold. Meanwhile, U.S. equities remain at elevated levels, but short-term volatility may increase as markets reassess the outlook for U.S. economic growth and the Feds future policy path.

Financial Instruments to Watch

• U.S. Dollar Index

• Precious Metals: Gold, Silver, Platinum

• Major U.S. Indices: S&P 500, Nasdaq, Dow Jones

Market Sentiment Analysis

Overall market risk sentiment remains relatively positive, but investors are increasingly paying attention to the potential impact of slowing U.S. economic growth.

Major U.S. equity indices performed strongly last week, with both the S&P 500 and Nasdaq recording their third consecutive weekly gains. However, weaker retail sales and declining consumer sentiment have prompted markets to reassess the resilience of U.S. consumer spending. As a result, market sentiment this week is expected to remain risk-on, but with greater caution at elevated levels.

Precious Metals Strategy This WeekXAUUSD | Gold

Gold has recently been highly sensitive to changes in U.S. interest-rate expectations and movements in the U.S. dollar.

From a fundamental perspective, recent U.S. inflation and consumer data have shown signs of moderation, while expectations for a September rate hike have declined. As a result, gold continues to receive some fundamental support.

However, following its recent gains, gold remains at relatively elevated levels, creating the potential for short-term profit-taking. Therefore, it may be preferable to avoid chasing the market purely based on fundamental expectations this week.

Technical Factors to Watch

Key levels and indicators to monitor this week include:

• Whether gold can break and hold above its previous high;

• Whether pullbacks can regain support;

• Whether the U.S. Dollar Index continues to weaken;

• Whether U.S. Treasury yields continue to decline.

If gold stabilizes after a pullback and subsequently breaks above its previous high, the bullish structure could continue.

Conversely, if prices break below key support levels and begin forming lower highs and lower lows, the risk of a short-term correction should be monitored.

Overall Market View for the Week

The key market theme this week remains centered on whether the U.S. economy is continuing to cool and how the Federal Reserve may approach its September policy decision.

U.S. inflation pressures have moderated to some extent, while consumer spending has also shown signs of slowing. As a result, market expectations for a September rate hike have eased significantly.

This weeks FOMC Meeting Minutes and upcoming economic data will provide further confirmation of this policy outlook.

If U.S. data weakens, the USD may face pressure while gold and equities could gain support; conversely, stronger data could support the USD while increasing correction risks for gold and pressure on equities. This week, markets will closely monitor the FOMC Meeting Minutes, key U.S. economic data, Treasury yields, and golds technical structure.