By Spec FX | August 4, 2025
A Bloody Friday on Wall Street
U.S. equity markets closed the week with a resounding thud after a stunning Non-Farm Payrolls (NFP) miss triggered a broad-based selloff across global risk assets. Friday’s jobs report printed a meager +73k new jobs, well below the consensus +106k, but the real shock came from the massive downward revision to the prior month—from +147k to just +14k.
The Nasdaq led the bloodbath, plunging 2.25% to 20,650, while the S&P 500 dropped 1.60% and the Dow shed 1.23%. Bond markets ripped higher as traders rapidly repriced interest rate expectations, with the 2-year yield collapsing 27.6bps to 3.681%, and the 10-year yield falling 14.1bps to 4.216%.
Dollar Dives, Gold Soars, Oil Stumbles
The U.S. Dollar Index (DXY) got crushed, sinking 0.83% to 99.14, its first close below the key 100 level in months. The move reflected a sharp dovish shift in Fed expectations and an accelerated unwind of USD longs.
Gold caught a strong bid on both safe haven demand and dollar weakness, surging 2.23% to $3,362.03/oz—its largest single-day gain since March.
Meanwhile, oil markets weren’t spared. Comments from OPEC+ around possible production increases hit sentiment, sending Brent crude down 2.83% to $69.67 and WTI off 2.79% to $67.33.
Fed Rate Cut Odds Surge: September in Play
In just hours, the NFP data flipped the market’s rate outlook on its head. Before the report, traders were pricing in just 34bps of cuts for 2025. Now? That number has exploded to 63bps, with September rate cut odds jumping to 90%.
This is a dramatic turnaround from the Fed’s hawkish tone earlier last week. Markets are now questioning whether the labor market is starting to show deeper cracks, which could force the Fed’s hand much sooner than expected.
Week Ahead: Eyes on Swiss CPI
The week kicks off quietly on the macro calendar, with Australian and Canadian markets closed on Monday, potentially dampening liquidity across the Asia and U.S. sessions.
The only notable event on deck is Swiss CPI, expected to post a 0.2% MoM decline, reversing last month’s increase. Any upside surprise could trigger a swift reaction in CHF pairs.
For now, Friday’s payroll shock remains the dominant narrative, and positioning around Fed policy is likely to keep driving markets in the short term.
Spec FX Takeaway:
Markets are no longer waiting for the Fed to pivot — they’re pricing it in. We’re watching for follow-through in gold, tech, and bonds as the rate outlook resets. Traders should stay nimble as volatility returns with a vengeance.
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