Trump wants to fire Jerome Powell again. The RBA is likely to cut rates at its next meeting

At the end of Wednesday, the Dow Jones (US30) Index rose by 0.53%. The S&P 500 (US500) Index rose by 0.32%. The Nasdaq (US100) Technology Index closed higher by 0.25%. The US stocks rebounded from session lows and closed higher on Wednesday after President Trump said he had no plans to fire Fed Chairman Jerome Powell, easing concerns sparked by earlier reports that he was considering taking action. Markets initially fell on reports that Trump was considering Powell’s resignation, exacerbating investor concerns about persistent inflation and ongoing trade tensions. The June Producer Price Index, which remained unchanged, brought some relief after Tuesday’s Consumer Price Index came in higher than expected and showed the fastest annual inflation since February. On the corporate front, Bank of America fell by 0.3% after earnings came in below expectations, while Morgan Stanley declined by 1.3% despite solid profits. Meanwhile, Goldman Sachs added 1% after beating earnings expectations, and Johnson & Johnson jumped 6.2% after strong results and an upgrade to its full-year expectations.

On Thursday, Bitcoin hovered around $118,000, moving sideways after retreating from record highs earlier in the week as investors assessed developments on key digital assets regulation bills. The House of Representatives approved rules for debating cryptocurrency legislation late Wednesday, the result of intense negotiations and direct intervention by President Trump. While the procedural breakthrough signaled progress, new opposition from moderate Republicans and key committee members over the changes raised doubts about the bill’s ultimate passage. The continuing uncertainty affected sentiment as markets await a clearer direction for regulation.

European stock markets were mostly lower yesterday. The German DAX (DE40) fell by 0.21%, the French CAC 40 (FR40) closed down 0.57%, the Spanish IBEX35 (ES35) rose by 0.08%, and the British FTSE 100 (UK100) closed down 0.13%. The Frankfurt DAX Index has been falling for five consecutive trading sessions. The index is affected by ongoing trade uncertainty and weak corporate earnings of European companies. While investors were hoping for a more favorable tariff agreement than previously planned, President Trump again threatened to extend tariffs to pharmaceutical products and semiconductors, possibly as early as August 1, when his “retaliatory” tax policy expires. Volkswagen fell by 3.7%, Porsche AG lost 3%, and Mercedes-Benz Group fell by 1.9%.

WTI crude oil prices fell to $66.3 per barrel on Wednesday, marking the third consecutive day of decline. The decline was driven by renewed concerns about potential oversupply and the impact of US trade tariffs on global economic growth and fuel demand. The EIA’s weekly report showed a decline in total US crude oil inventories of 3.86 million barrels, but inventories at the Cushing, Oklahoma hub rose to their highest level since June. Traders remain concerned about the risk of oversupply as OPEC+ accelerates the return of previously cut production volumes and production in North and South America continues to grow.

On Wednesday, silver prices rose to $38 per ounce, recovering from a two-day decline as the US dollar and Treasury yields retreated from recent highs. The pullback came as investors reassessed the outlook for Federal Reserve policy and monitored changes in trade dynamics. On Tuesday, silver came under pressure after US consumer inflation data caused traders to abandon expectations of an imminent Fed rate cut.

Asian markets were mostly down on Wednesday. Japan’s Nikkei 225 (JP225) fell by 0.04%, China’s FTSE China A50 (CHA50) lost 0.31%, Hong Kong’s Hang Seng (HK50) decreased by 0.29%, and Australia’s ASX 200 (AU200) showed a negative result of 0.79%.

The Bank of Indonesia lowered its base interest rate by 25 basis points to 5.25% at its July 2025 policy meeting, in line with market expectations. This move reflects the inflation projections for 2025–2026, which remains within the target range of 2.5±1%. Annual inflation rose to 1.87% in June from 1.60% in May, slightly above expectations but still within the target range. Meanwhile, the rupiah exchange rate against the US dollar rose by 0.34% in June and remains stable in mid-July, mainly due to stabilization measures by the Bank of Indonesia. Economic growth in 2025 is expected at between 4.6% and 5.4%.

The Australian dollar weakened to below $0.650 on Thursday, reversing the previous session’s gains, as weaker-than-expected employment data reinforced expectations of an RBA rate cut in August. The Australian Bureau of Statistics reported that the unemployment rate rose to a more than three-year high of 4.3% in June, ending a five-month hold and exceeding projections of 4.1%, while employment increased by only 2,000 people, significantly below the expected increase of 20,000. Weak labor market data added to evidence of an economic slowdown, strengthening the case for policy easing. Markets now see an 89% chance of a 25 basis point rate cut at the Central Bank’s August meeting.