Insights 
VT 
President Trump’s latest economic strategy is doing more than raising eyebrows, it’s rewriting the rules. In a sharp departure from traditional free-market policy, the U.S. government is now stepping in as an equity investor, acquiring stakes in companies it deems vital to national security.
This isn’t happening during a recession or a world war. It’s happening in peacetime, which makes it all the more market-moving.
A New Kind of Market Player
Let’s start with the headlines. When Japan’s Nippon Steel attempted to acquire U.S. Steel, the deal only proceeded after the Trump administration secured a “golden share.”
This special share gives the U.S. president veto power over decisions like shutting down plants or shifting production abroad. The government didn’t put money into the company, but it now holds a seat at the table.
Then there’s the Pentagon’s $400 million equity injection into MP Materials, the only rare earths miner and processor on U.S. soil.
That deal made the Department of Defense the largest shareholder and locked in a price floor for rare earth magnets used in everything from fighter jets to electric vehicles. In short, the government has skin in the game…and a product pipeline to protect.
Golden Shares and Strategic Stakes
Markets reacted fast. MP Materials stock surged on the news, as traders priced in reduced risk and guaranteed government demand. Traders are now looking for similar plays: which company might Washington back next?
The short list includes defence contractors, AI developers, quantum labs, and clean tech manufacturers. In other words, anyone building the backbone of national security or the energy transition.
But it’s not all upside. These moves introduce new kinds of risks. When the government gets involved, politics follows. Decisions may prioritise policy over profit. And if these companies underperform, taxpayers take the hit. There’s also the chance that private traders get cold feet if they feel crowded out or blindsided by sudden state moves.
Winners, Risks, and Reaction
Still, the bigger shift is psychological. Traders now need to weigh the odds of a firm becoming part of a public-private partnership. A golden share here, a sovereign-style investment vehicle there, and suddenly, “market forces” start to look a bit more…curated.
This could spark sector-wide momentum in areas flagged as strategic, but it also means every earnings call, takeover bid, or policy memo could carry deeper meaning.
Zooming out, the S&P 500 is still holding strong above the 6400 mark, showing that broader market sentiment hasn’t soured. Yet, there’s a growing sense that a new kind of tailwind—government backing—is powering some stocks beyond the usual fundamentals.
As the U.S. leans further into industrial policy, allies may follow suit. We could see a global pivot from pure-market competition to state-coordinated economic blocks.
That’s especially relevant in sectors where China currently dominates supply chains. Rare earths are the canary in the coal mine here.
If the U.S. builds out domestic capacity successfully with the Pentagon acting more like a venture capitalist than a defence agency, it sets a precedent. Other critical resources, like lithium, semiconductors, or even data infrastructure, may follow.
The Global Shift Begins
The timing is also key. With the Fed holding rates steady at 4.5 percent and rate cut chatter heating up for September, Trump’s investment strategy may run parallel to monetary loosening.
Job numbers on Friday are forecasted to drop to 108K from 147K last month, and unemployment is expected to tick up to 4.2 percent. If those numbers land as predicted, the case for a September cut strengthens. That would take some pressure off the dollar in the short term, especially as traders adjust for a more hands-on White House in both monetary and industrial strategy.
For now, traders should keep a close eye on names in strategic sectors and monitor Washington’s language for hints of further intervention.
Price action will likely favour firms with public sector exposure or those seen as candidates for golden-share treatment. But expect volatility, especially if legal challenges, poor performance, or election cycle noise disrupt this new model.
Trump has added a new player to the market, the U.S. government itself. And it is no longer just a regulator or a lender of last resort. It is a buyer, a shareholder, and in some cases, a decider.
Key Movements of the Week
The dollar index (USDX) remains at the centre of market attention this week. After falling from the 97.50 zone, it hasn’t formed a clean consolidative structure. This is key. Without consolidation, the recent weakness may just be a pullback before another upward push.
If that push materialises, watch 97.75 and 98.10 for bearish price action. A failure to break these levels with conviction could set the stage for the next downturn—but if it surges past them, the dollar may gain further traction.
EURUSD moved higher from the 1.1700 zone, as anticipated, but now we’re in the wait-and-see phase. The pair needs stronger price action to confirm direction. If it reverses and breaks lower, the 1.1665 level becomes crucial. Bullish signals here could offer a clear re-entry. Without them, momentum could slip away, especially if USD strength returns.
GBPUSD dipped below the 1.3470 area last week. That drop opens the door to a bounce from current levels, but this isn’t a clean reversal yet. If the pair continues to slide, the 1.3310 area becomes the next testing ground for bulls looking for an entry point. Price action at that level could give us the edge to rejoin any potential upward trend, especially if broader dollar sentiment cools.
USDJPY closed above 147.70, which holds as a short-term pivot. If price falls, 147.15 is the level to watch for renewed support. On the upside, 148.40 now acts as the next hurdle. We’re watching both for rejection or breakout behaviour to shape our bias. With U.S.–Japan trade policy in flux and inflation data on deck, this pair could swing quickly.
USDCHF fell away from 0.7970. If that pullback loses steam and price rebounds, the 0.8000 area becomes the red zone for fresh bearish setups. Until then, short-term traders may sit tight, especially with the pair floating in no man’s land between zones.
AUDUSD ended the week at the 0.6550 mark. This is an active decision point. Should the pair consolidate here, we’ll be eyeing 0.6580 to 0.6590 for fresh bearish patterns. If it drops, bulls could re-enter around 0.6515. That level has held well in recent months, and unless broken decisively, still offers a reliable bounce setup.
NZDUSD mirrored this structure, closing at 0.5995. If the pair consolidates, expect bearish signals to emerge near 0.6030. On the flip side, the 0.5955 level remains key for bulls. Should we test that lower boundary and see strength, it may offer a high-probability long opportunity in the days ahead.
USDCAD is the pair to watch if we see a classic consolidation. If price settles and coils, the 1.3670 and 1.3655 zones could invite fresh bullish pressure, especially with Canadian rate expectations already baked in. A push from these levels may be supported if oil prices soften further, as that tends to weigh on CAD.
Speaking of oil, USOil has pulled away from its trendline again, signalling the market’s hesitation as supply-side narratives evolve. If crude pushes lower, the 63.35 and 61.00 zones stand out as potential supports. A bounce here could align with geopolitical headlines or OPEC commentary expected in early August.
Gold has fallen from the 3390 level. If the slide continues, bulls will be watching 3295 closely. This level has acted as a launchpad in previous moves, but we’ll need to see clear bullish structure before entering. Otherwise, gold may remain under pressure, especially if rate cut hopes weaken.
The S&P 500 is trading around the 6400 handle. If the index breaks higher, 6630 is the next decision point. Traders are watching for exhaustion or continuation here. With mixed earnings and monetary policy still uncertain, this range may hold for the short term unless catalysts drive clear movement.
Bitcoin is staging a recovery after briefly taking out the 15714 low. The next critical step is whether price can close decisively above 120350. A clean breakout here might signal readiness to attack a new all-time high. If BTC falters or consolidates instead, watch for bullish setups at 113345 or 111000. These levels remain strong supports and could spark renewed rallies if tested again.
Natural Gas is playing a waiting game. If price consolidates soon, look for bearish patterns near 3.20 or 3.28. These areas remain sell zones unless we see a fundamental shift in demand or weather-linked supply headlines.
Key Events of the Week
This week’s calendar may not bring any surprises from central banks directly, but the data hitting markets from Tuesday to Friday could sharpen the focus on whether the Federal Reserve will move to cut in September. Each release builds on the next, tightening the pressure on policymakers and adding fuel to short-term volatility.
Tuesday, 29 July, opens with the JOLTS Job Openings report, forecasted at 7.49 million compared to the previous 7.77 million. This continued decline suggests the labour market is cooling gradually, which leans into the Fed’s preferred trajectory. Should the figure print softer than expected, dollar weakness may deepen—at least temporarily. Any upside surprise, however, could delay market bets on September easing.
On Wednesday, 30 July brings two key events. First, the U.S. Advance GDP is expected to rebound to 2.4 percent from last quarter’s -0.5 percent contraction. That kind of bounce would suggest the broader economy remains resilient, even under high interest rates. Paired with any existing dollar softness, a strong GDP reading could offer a short-term lift. Also on the radar is the Bank of Canada’s rate decision, with markets expecting no change at 2.75 percent. However, if the BoC doubles down on plans to cut again in 2025, USDCAD may push higher, especially if the Fed remains noncommittal.
Thursday, 31 July is the most eventful day. The Fed is set to hold rates steady at 4.5 percent, but the market will be hanging on every word of the accompanying statement. Traders want clarity on whether a September cut is in play, especially after Trump hinted that his recent meeting with Fed officials leaned dovish. Meanwhile, the Bank of Japan is also expected to keep its rate at 0.5 percent. The newly struck trade deal with the U.S. reduces some of the economic pressure on Japan, opening the door for a more hawkish lean. If the BOJ signals even mild intent to normalise further, USDJPY could pull back. Finally, the Core PCE Price Index is forecasted at 0.3 percent, slightly hotter than last month’s 0.2 percent. If inflation proves sticky, it may throw a wrench in rate cut expectations. If it cools, traders may find renewed confidence in a September shift.
Friday, 1 August wraps with the U.S. Non-Farm Payrolls report, expected at 108,000 jobs versus last month’s 147,000, and a forecasted uptick in unemployment to 4.2 percent from 4.1 percent. These numbers will anchor the week’s macro narrative. If the jobs market is indeed slowing, it strengthens the case for rate cuts. But if the data holds firm or surprises to the upside, the path forward becomes murkier, especially if inflation remains above target.
While no single release may tip the scales, the combination of labour, inflation, and growth data could tilt sentiment decisively in one direction. As of now, dollar pairs remain range-bound, equities are sitting near resistance, and gold hovers above key support. This week’s numbers may not just shape expectations—they could set the tone for the rest of the quarter.
