July JOLTS Data Fuels Fed Rate Cut Expectations

The July JOLTS report revealed accelerated labor market cooling, with job openings falling 176k to 7.18mn and June data revised down 80k. The job openings to the unemployed dropped to 0.992 from 1.049, nearing pre-pandemic levels. Healthcare, entertainment, and retail saw the largest vacancy declines. While layoff rates held steady at 1.1% and quits remained at 2.0%, workers report job offers are becoming harder to obtain. This data reinforces policymakers’ view that labor markets aren’t driving inflation, with demand falling faster than supply. Market expectations for a September Fed rate cut have surged to over 95%, up from 62% a month ago.

Turkish inflation decreased less than economists anticipated in August, declining to 33% annually from 33.5% in July, while analysts had projected 32.6%. Monthly inflation reached 2.04%, down slightly from July’s 2.06% but above the expected 1.75%. The persistent inflation levels suggest consumer demand remains strong despite ongoing economic pressures. Food, transportation, and rent were primary drivers of monthly price increases, with rent being particularly challenging for monetary policy to address since it’s typically based on historical inflation rates. Core inflation, which excludes volatile items like food and energy, improved from 34.7% to 33%, showing some moderation in underlying price pressures.

Etihad Airways achieved record-breaking H1 2025 performance with profit after tax reaching AED1.1bn, up 32% y/y. Total revenue rose 16% driven by strong passenger and cargo demand, while EBITDA increased 24% to AED2.7bn with improved 20% margins. The airline carried 10.2m passengers, a 17% increase y/y with an 87% load factor and expanded its fleet beyond 100 aircraft, including new A350s and A380 reintroductions. Etihad ordered 28 Boeing wide-body aircraft and launched its new A321LR product featuring wide-body luxury on narrow-body operations. The airline now serves almost 90 destinations, having launched 27 new routes this year, positioning Abu Dhabi as a major global aviation hub.

FedEx has established a new regional hub in Riyadh, Saudi Arabia, and obtained a license to operate as a foreign air carrier in the kingdom. The hub will handle 24 monthly cargo flights through King Khalid International Airport, positioning Riyadh as a key logistics connection point between Europe, Asia, and the Americas. This expansion represents FedEx’s shift from working through local partners to operating independently in Saudi Arabia. The move aligns with Saudi Arabia’s broader strategy to become a major Middle East logistics hub, supported by significant government investment in transportation infrastructure including ports, railways, and roads. The Saudi government aims to increase the transport sector’s contribution to GDP from 6% in 2021 to 10% by 2030, reflecting the kingdom’s commitment to diversifying its economy and strengthening its position in global trade networks.

Qatar Investment Authority (QIA) has become a “significant” investor in Anthropic’s USD 13bn funding round that valued the AI startup at USD 183bn. The QIA praised Anthropic’s enterprise focus, particularly in coding automation and business applications. Qatar joins other major investors including Amazon, Goldman Sachs, and prominent venture capital firms, while positioning itself competitively against Gulf neighbors in the AI race. This investment reflects broader Middle Eastern engagement in AI, with Abu Dhabi’s MGX backing OpenAI and Elon Musk’s xAI raising funds from QIA, MGX, and Saudi Arabia’s Kingdom Holdings. The QIA, managing USD 524bn, plans to invest USD 500bn in the US over the next decade and indicated Anthropic is just the beginning of more AI investments to come.

Today’s Economic Data and Events

12:30 S&P Global UK Construction PMI. Aug. Forecast: 45.0

16:15 US ADP Employment Change. Aug. Forecast: 68k

16:30 US Initial Jobless Claims. Aug. Forecast: 230k

16:30 US Trade Balance. July. Forecast: -77.9bn USD

Fixed Income

• The 2yr yields and the 10yr yields closed flat on Wednesday.

FX

• The dollar index declined 0.26% to 98.142
• The pound rose 0.4% to 1.3444.
• The Euro declined 0.2% to 1.1662.

Equities

• In the US, the Dow Jones closed unchanged, the S&P 500 rose 0.5%, and the Nasdaq rose 1%.
• In the region, the Abu Dhabi Securities Exchange (ADX) rose by 0.2% while Dubai Financial Market (DFM) declined 0.6%. Saudi Arabia’s Tadawul closed down 0.5%.

Commodities

• Oil prices dropped after the rising market expectations that OPEC+ will increase production at the upcoming meeting.
• Brent futures declined 2.2%% to USD 67.6/b. and WTI dropped 2.47% to 63.97/b
• Gold prices continued to rise and setting new record prices. Gold rose 0.74% to 3559/troy oz.
• Silver set a new 14-year high rising 0.8% to 41.2/try oz.