Weekly Market Sentiment – 10 AUGUST 2026

This week’s weekly market sentiment shifted decisively after Friday’s payroll shock wiped out rate hike expectations and sent risk assets higher. The dashboard below captures where each major currency, index, and commodity stands heading into the new trading week

Strength Dashboard

Geopolitical Spotlight

The Iran-Oman negotiations over the Strait of Hormuz dominated headlines this week. Iran’s Foreign Minister said both countries are “very close” to a framework deal, while the US signalled optimism that an agreement could come within days. The strait has been effectively closed since the war began in late February, disrupting roughly 20% of the world’s seaborne oil trade.

Oil prices reacted sharply. Brent crude fell from around $90 at the start of the week to roughly $82 by Friday as markets priced in the possibility that millions of barrels of Middle Eastern supply could return to global markets. That said, key sticking points remain. Iran wants to exclude US and Israeli vessels from transit and impose fees on what it calls “hostile” nations, while Washington insists on unrestricted passage.

Meanwhile, the US jobs report landed on Friday with a surprise loss of 23,000 payrolls, well below the 80,000 expected. Combined with 103,000 in downward revisions to May and June, the labour market looks weaker than previously thought. Markets immediately cut the probability of a Fed rate hike in September from 67% to about 44%.

Forex Markets

The dollar was the big loser this week. The DXY broke below 100 and ended around 99.60 after the payrolls shock. The 9-3 FOMC vote at the July meeting already showed internal division, and Friday’s data gave dovish members fresh ammunition. Average hourly earnings slowed to 3.2% year-on-year, the lowest since May 2021.

GBP held steady around 1.3490 against the dollar. The Bank of England held at 3.75% and the 150 basis point gap above the ECB rate continues to support sterling. EUR edged higher to 1.1560 as the ECB’s June hike to 2.25% keeps the floor under it, but growth concerns in the eurozone are capping upside. JPY saw another volatile week. USD/JPY dropped from around 163 to 157.67 as the joint US-Japan intervention and softer Treasury yields pulled the pair lower. The yen weakened back toward 158 on Friday but remains well off its recent lows.

AUD broke above 0.70 and held above it all week, closing near 0.7071. The RBA decision on Tuesday (expected hold at 4.35%) will be the next test. NZD recovered modestly to 0.5895 after the RBNZ hiked to 2.50% in July, but the kiwi remains one of the weaker performers over the past 2.5 months. CHF benefited from safe-haven demand with USD/CHF dropping to 0.8077. The SNB remains at 0.00%, making the franc a pure risk-off play.

Currencies to watch

USD/JPY: The pair is caught between intervention support for the yen and the Fed’s hawkish lean. If CPI comes in soft, 155 is in play. A hot number could push it back toward 160.

AUD/USD: The RBA decision on 11 August is the short-term catalyst. A hold is priced in, but any hawkish language from Governor Bullock could push AUD through 0.71.

GBP/EUR: Sterling is trading near one-year highs around 1.16 against the euro. The rate differential favours GBP, and further eurozone weakness could see this extend.

Indices

US equities had their best week since April. The S&P 500 closed at a record 7,757.64, up 3.58% on the week. The Nasdaq surged 5.19% to 26,690.62, led by a 7%+ jump in the semiconductor ETF (SOXX). The Dow Jones added 2.96%, closing at 54,036.93.

The logic is straightforward. Weak jobs data means the Fed is less likely to raise rates, and lower rates are good for equities, especially high-growth tech. Market expectations for a September hike dropped to 44% on Friday, from 67% just a week earlier. Earnings season also helped. The beat rate for Q2 hit its highest since 2021, with 77% of S&P 500 companies topping expectations. Atlassian surged 35% on strong revenue guidance, and Microchip Technology jumped nearly 14%.

SpaceX rose 15.8% following the expiry of its first share lockup after the record June IPO. Airbnb gained 17.4%, the best performer on the S&P 500 for the day.

Gold & Oil

Gold had its best week since January. XAU/USD rose roughly 5% to close around $4,342, briefly touching $4,372 on Friday. Three things drove the move: falling Treasury yields after the payrolls miss, a weaker dollar, and a drop in oil prices that reduced inflation expectations. Lower yields cut the opportunity cost of holding gold, and the metal benefited directly.

Gold had been stuck in a six-week range between $4,000 and $4,200 through July. The breakout above the yearly open at $4,312 is significant technically. It suggests the downtrend from the February all-time high ($5,602) may be over, at least for now.

Brent crude fell sharply from nearly $90 at the start of the week to around $82 by Friday. The main driver was optimism around the Iran-Oman Hormuz deal, which could restore millions of barrels to global supply. OPEC+ also added a token 188,000 barrels per day for September. Reports that the US could lift its naval blockade once shipping resumes added further downside pressure. However, Iran targeting vessels it considers “hostile” in the strait kept a floor under prices.

Week in Review