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2025-07-31 21:58:15
Euro Bulls' Night of Despair: A Last Escape Signal Before the Fed's Knife Falls? ⑴ The euro's decline against the dollar is likely to intensify, as the collapse of expectations for a Fed rate cut is fueling the dollar bulls' ferocity. US data released late on July 31st (Beijing time) completely shattered the illusion of easing. ⑵ Weekly initial jobless claims, better than expected, combined with a 0.9% increase in the Q2 Employment Cost Index, demonstrate the US labor market's remarkable resilience. This combined blow directly shattered the probability of a September rate cut—the CME FedWatch tool shows the probability plummeting from 46.7% to 39.3% in 24 hours. ⑶ Even more devastating is the lingering specter of inflation: June's PCE rose by 0.3% month-over-month, in line with expectations, but the details of the upward revision of May's data from 0.1% to 0.2% reveal that price pressures remain far more viscous than market expectations. ⑷ Powell's hawkish stance is unfolding. He explicitly identifies the unemployment rate as a core indicator of economic health, but the current downward trend in job creation and persistently high inflation create a policy impasse. 5. Capital has voted with its feet: December 2025 SOFR futures prices have fallen to a 5.5-month low, with technical indicators showing a standard downward trend. This is the most blatant slaughter of traders' expectations of a rate cut. 6. All eyes are now on the non-farm payroll data due at 8:30 PM Beijing time on August 2nd. If the employment data exceeds expectations again, the 1.1050-1.1100 range will become a bloody defense for euro bulls.
