NFP shows US labour market weakness

The US jobs report for July 2025 revealed the weakest three-month employment stretch since the pandemic, with May-July averaging just 35,000 monthly gains—far below the roughly 100,000 needed to match population growth. July added 73,000 jobs, but devastating revisions slashed May to 19,000 and June to 14,000, erasing 258,000 positions from earlier estimates.

This marks the worst job creation since 2020’s lockdowns, signaling deep economic strain. The three-month total of just 106,000 jobs represents a dramatic deterioration from the 333,000 average in early 2025. The unemployment rate rose to 4.2% in July from 4.1% in June, while those unemployed for over 27 weeks reached 1.82 million—the highest since December 2021.

Manufacturing weakness compounded these concerns, with the Manufacturing PMI registering 48.0 in July, a one-point decrease compared to the 49.0 recorded in June PRNewswire , marking the fifth consecutive month of contraction. The survey’s measure of manufacturing employment decreased to 43.4, the lowest level since July 2020, from 45.0 in June.

President Trump responded by firing the Bureau of Labor Statistics chief, baselessly claiming the data was “rigged” to damage Republicans. Economists condemned this unprecedented attack on the agency’s independence, warning it undermines confidence in US economic statistics.

Dubai welcomed 9.9mn visitors over the first half of the year, y/y growth of 6%. This marked a new record for the sector which has become one of the most important growth drivers in Dubai and the wider UAE over the past several years. Western Europe was the largest source market at 22%, while Eastern Europe & CIS and South Asia both accounted for 15%. Hotel occupancy stood at 80.6%.

Abu Dhabi’s non-oil trade rose 34.7% y/y in H1, rising to AED 195.4bn (USD 53.2bn). Exports were up 64% to AED 78.5bn, while imports were up 15% to AED 80bn. Re-exports were up 35% at AED 36bn.

Today’s Economic Data and events

11:00 Turkey CPI. Forecast: 34.1 YoY

18:00 US Factory Orders, June. Forecast: -4.8%

Fixed Income

• Yields on US Treasuries declined after weak data and market nervousness ahead of expected policy actions. The 2yr yield fell 20bps to close at 3.68%, while the 10yr yield dropped 15bps to 4.23%.

FX

• The dollar index sank, snapping its recent rally, and closed down 0.83%. The Euro continued to strengthen, closing up 1.5% at 1.1587. GBP advanced to 1.3279, up 0.5%, and the JPY gained 2.2% to 147.4.

Equity Markets

• US equity indices fell sharply on growth concerns and new tariff announcements. The S&P 500 dropped 1.6%, the Dow Jones fell 1.2% and the NASDAQ lost 2.2%.
• Locally, DFM closed down 0.77%. ADX dropped 0.52%. Saudi Arabia’s Tadawl closed down 0.8%.

Commodities

• Oil prices experienced a sharp decline on Friday, with Brent and WTI falling 3.9% and 2.8% to USD 69.67/band USD 67.33/b. This drop happened as traders grew increasingly anxious ahead of a major OPEC+ meeting, responding to widespread speculation and leaks that the group might agree to boost oil production. The selloff intensified amid worries about oversupply and weaker-than-expected U.S. economic data, which added to concerns about slowing demand.
• On Sunday, OPEC+ confirmed these market fears by officially deciding to raise output by 547,000 barrels per day in September 2025, fully unwinding earlier voluntary cuts by key members such as Saudi Arabia and Russia.
• Gold prices posted a sharp rise, closing at USD 3,362.68 per ounce, up 2.2% on the day as investors shifted into safe-haven assets on signs of a US labor market slowdown and rising monetary easing expectations. Silver followed suit, gaining 0.88% to close at USD 37.04 per ounce.