After Wednesday’s Fed Chair firing fiasco left markets rattled and dollar bears prowling, today’s US delivered the plot twist everyone needed: reminders that U.S. economic data is rock-solid and why fundamentals usually win over headlines.
From retail sales crushing expectations to jobless claims plummeting, the American consumer stepped up as the unlikely hero of the story. The result? A classic “good news is good news” rally that sent stocks soaring, oil surging, and the dollar flexing its muscles against every major currency in sight.
Here are headlines you may have missed in the last trading sessions!
Headlines:
- Japan Reuters Tankan Index for July 2025: 7.0 (7.0 forecast; 6.0 previous)
- New Zealand Food Price Index for June 2025: 4.6% y/y (4.5% y/y forecast; 4.4% y/y previous)
- Japan Balance of Trade for June 2025: 153.1B (-100.0B forecast; -637.6B previous)
- Australia Consumer Inflation Expectations for July 2025: 4.7% (4.7% forecast; 5.0% previous)
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Australia Employment Change for June 2025: 2.0k (25.0k forecast; -2.5k previous)
- Australia Unemployment Rate for June 2025: 4.3% (4.1% forecast; 4.1% previous)
- Swiss Balance of Trade for June 2025: 4.3B (3.7B forecast; 2.0B previous)
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U.K. Employment Change for May 2025: 134.0k (50.0k forecast; 89.0k previous)
- U.K. Claimant Count Change for June 2025: 25.9k (21.0k forecast; 33.1k previous)
- U.K. Average Earnings incl. Bonus (3Mo/Yr) for May 2025: 5.0% (5.2% forecast; 5.3% previous)
- U.K. Unemployment Rate for May 2025: 4.7% (4.6% forecast; 4.6% previous)
- Euro area Consumer Price Index Growth Rate Final for June 2025: 2.0% y/y (2.0% y/y forecast; 1.9% y/y previous); 0.3% m/m (0.3% m/m forecast; 0.0% m/m previous)
- Canada CFIB Business Barometer for July 2025: 50.9 (47.5 forecast; 47.3 previous)
- Canada Foreign Securities Purchases for May 2025: -2.79B (-9.36B previous)
- U.S. Philadelphia Fed Manufacturing Index for July 2025: 15.9 (-3.0 forecast; -4.0 previous)
- U.S. Philly Fed Employment for July 2025: 10.3 (-9.8 previous)
- U.S. Philly Fed Prices Paid for July 2025: 58.8 (41.4 previous)
- U.S. Initial Jobless Claims for July 12, 2025: 221.0k (230.0k forecast; 227.0k previous)
- U.S. Retail Sales for June 2025: 3.9% y/y (3.6% y/y forecast; 3.3% y/y previous); 0.6% m/m (0.2% m/m forecast; -0.9% m/m previous)
- On Thursday, the US Congress passed the first federal legislation to regulate stablecoins
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Risk-on playas got their groove back Thursday as traders brushed off Trump-Powell drama and solid economic data reminded everyone that the US consumer isn’t ready to throw in the towel just yet. The star of the show was better-than-expected US retail sales and unemployment claims data, which came in hot at 8:30 AM, correlating with the turn higher in “risk-on” assets like equities, oil and crypto.
Crude Oil led the charge with a stellar +1.19% performance for the day, shrugging off earlier supply concerns and likely riding the wave of economic optimism. The commodity had been choppy through Asian and London sessions but found its mojo once U.S. retail sales hit, suggesting traders are betting stronger US consumer spending means more gas guzzling and economic activity ahead.
Equity indices joined the party fashionably late but made up for lost time. The S&P 500 notched a solid +0.72% gain on the day, with its rally really kicking off immediately after retail & employment data dropped. Markets seem to be saying “recession, what recession?” as signs of consumer resilience continue to emerge. The tech-heavy index hit session highs around 10:30 AM and held those gains like a champ.
The U.S. Dollar Index flexed its muscles with a +0.36% advance, likely benefiting from the economic strength narrative and probably some relief that the Powell firing drama from Wednesday was just political theater. This is also likely why we saw Gold also took it to the chin starting in the Asia session, sliding to a -0.26% result on the day after a US session rebound after being down over -1.00% at one point.
Bitcoin had a wild ride as the crypto king started declining Wednesday evening and couldn’t catch a break, briefly touching -1.80%. It was at the release of the positive US data that bulls jumped in, and thanks to the first US federal legislation to regulate stablecoins, bitcoin shot up back above $120K right after the Wednesday close.
Bond yields told an interesting story, seeing early strength in Asia but began to fade starting in the London session. This suggests bond traders aren’t too worried about the Fed changing course just yet, and possibly viewing the US retail strength as healthy growth rather than inflation-stoking overheating. The US 10-year yield finished around 4.45% after peaking around 4.48%.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The US dollar saw a dominant but steady climb against all majors during the Asia and morning London session hours, and with no major fresh catalysts to directly attribute to, this likely reflected traders shaking off Wednesday’s Fed Chair firing fiasco.
Once Trump walked back those Powell dismissal rumors, the dollar seemingly found its footing again. So the overnight strength was likely a combination of short-covering and renewed confidence in Fed independence – because nothing says “buy dollars” like central bank credibility being restored. It’s also likely traders still have strong US CPI data in the back of their minds, limiting Fed rate cut bets.
USD’s broad-based gains also probably got an extra boost from weakness in other major economies. Australia’s unemployment unexpectedly jumping to 4.3% likely made AUD/USD particularly vulnerable, while the UK’s sticky inflation at 3.6% probably kept GBP on the defensive as traders wrestled with BoE policy uncertainty and how damaging high inflation rates can be to an economy.
Volatility picked up in the US session, correlating with when stellar U.S. economic numbers hit the tape. US retail sales crushed expectations at +0.6% versus forecasts of +0.2%, likely sending a clear message to traders: American consumers are still spending like there’s no tomorrow! Meanwhile, jobless claims dropping to 221k (way below the 234k forecast) probably reinforced the “U.S. economy is built different” narrative that’s been preventing complete dollar collapse amid net negative tariff deals and US debt themes. We actually saw the Greenback pull back after the data release, likely some profit taking and sell the news behavior after a strong rebound day for the US dollar.
Upcoming Potential Catalysts on the Economic Calendar
- Japan Consumer Price Index Growth Rate for June 2025 at 11:30 pm GMT
- New Zealand Credit Card Spending YoY for June 2025 at 3:00 am GMT
- Germany Producer Price Index Growth Rate for June 2025 at 6:00 am GMT
- Euro area Current Account for May 2025 at 8:00 am GMT
- Euro area Construction Output for May 2025 at 9:00 am GMT
- U.S. Building Permits & Housing Starts for June 2025 at 12:30 pm GMT
- U.S. University of Michigan Consumer Sentiment Index for July 2025 at 2:00 pm GMT
Japan CPI (11:30 PM GMT) Japan’s inflation reading will likely be the yen’s moment of truth. With BOJ normalization hopes already shaky, a softer print could probably draw JPY bears and vice versa.
Germany PPI (6:00 AM GMT) German wholesale prices could signal whether Trump’s tariff threats are building cost pressures in the eurozone pipeline. A hot reading might complicate ECB dovishness and potentially draw in euro support, while softer data would likely reinforce the “Europe is struggling” narrative.
US Consumer Sentiment (2:00 PM GMT) After Thursday’s stellar retail sales, this will probably test whether Americans are genuinely optimistic or just spending out of habit. Strong sentiment could cement “US economic exceptionalism” and boost dollar strength further. But if tariff fears are creeping into consumer psychology, a disappointing print might remind markets that trade war consequences are real and take wind out of the dollar’s sails.
As always, stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!
