Market Commentary: Tuesday 12th August

Overall market optimism grew after US President Trump extended pause on Chinese tariffs for another 90 days. Asian stocks gained 0.4%, and equity-index futures in Europe rose 0.3%.

Volatility in the precious metals market continues on the tariff news. Overnight, President Trump posted a one-line announcement on Truth Social: “Gold will not be tariffed!” However, a formal updated policy has yet to be issued. Spot gold initially dropped 1.6% after the news but has since recovered as traders await further clarification.

In the UK, employment data for July showed small signs of easing, with Payrolled Employees Monthly Change improving. This suggests the slump in the jobs market—seen since the Labour Party ramped up taxes for businesses—may be coming to an end. The data reinforces the case for the Bank of England to slow the pace of monetary easing.

All eyes are now on the US July CPI data, due this afternoon at 1:30 pm. The OIS market is currently pricing in an 85% chance of a 25-basis-point rate cut by the Federal Reserve at its September meeting.

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