Finance
Morning Bid: Bad news is good news for markets craving Fed 'rocket fuel'
Published by Global Banking and Finance Review
Posted on August 5, 2025
3 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on August 5, 2025
3 min readLast updated: January 22, 2026
Disappointing U.S. job data raises hopes for Fed rate cuts, influencing global markets. Asian markets respond positively, anticipating economic policy shifts.
A look at the day ahead in European and global markets from Rocky Swift
Markets are trying hard to see the bright side of bad news in the United States, anticipating dour data will trigger the economic "rocket fuel" of Federal Reserve interest rate cuts so craved by President Donald Trump.
Odds for a September cut now stand at about 94%, CME Fedwatch showed, from 63% last week. Market participants see at least two quarter-point cuts by year-end.
The odds shot up after disappointing non-farm payrolls data on Friday, causing equity markets to swoon and Trump to shoot the messenger, firing the head of labour statistics and promising to replace her within days.
Institutional independence is turning into a short bet in the U.S. The early resignation of Fed Governor Adriana Kugler will let Trump pick her successor, adding to concerns about partisan loyalty invading the staid world of central bank policy.
Asian markets followed gains on Wall Street, with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.4%. South Korea's Kospi stood out with a 1% jump, while Vietnamese shares traded near a record high.
Data today from the region's two biggest economies showed resilience in their service sectors in the face of headwind from Trump's chaotic introduction of tariffs on goods from trading partners.
In Japan, the S&P Global final services purchasing managers' index (PMI) climbed to 53.6 in July from 51.7 in June for the strongest expansion since February. China's services activity last month expanded at its fastest pace in more than a year.
A slew of PMIs for July are due for release today across Europe.
In earnings, the second-quarter U.S. results season is winding down, but investors are still looking forward to reports this week from big names including Walt Disney and Caterpillar.
Equity futures are pointing to gains in European and U.S. markets, with the pan-region Euro Stoxx 50 futures up 0.13% and the S&P 500 e-minis rising 0.14%.
Key developments that could influence markets on Tuesday:
* France industrial output for June * July purchasing managers indexes in France, Germany, eurozone, Britain * Europe earnings: Diageo, BP, Deutsche Post, Telecom Italia * U.S. earnings: Caterpillar, Pfizer, Yum! Brands, MarriottInternational, Fox CorpTrying to keep up with the latest tariff news?
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(By Rocky Swift; Editing by Christopher Cushing)
Monetary policy refers to the actions taken by a central bank to manage the money supply and interest rates to influence economic activity.
Interest rates are the cost of borrowing money, expressed as a percentage of the amount borrowed, and are influenced by central bank policies.
Economic growth is the increase in the production of goods and services in an economy over a period, typically measured by GDP.
A central bank is a financial institution that manages a country's currency, money supply, and interest rates, and oversees the banking system.
Financial markets are platforms where buyers and sellers engage in the trading of assets such as stocks, bonds, currencies, and derivatives.
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