Trump’s tariff announcements trigger another risk-off reactionDollar is stable, but equity markets underperform despite strong tech earningsUS jobs data in the spotlight; nonfarm payrolls expected to rise by 110kInflated expectations for a solid report raise the risk of a sharp reaction if data disappointsTariffs in the SpotlightDespite the eventful calendar so far this week – with the FOMC meeting and the various tech stock earnings standing out – market volatility had remained low until yesterday. This widespread complacency proved to be misplaced, as President Trump once again made headlines ahead of the August 1 deadline for the extension of reciprocal tariffs.After securing trade deals with the EU and Japan, Trump shifted his focus to countries deemed uncooperative. A revised list of reciprocal tariffs has been published, with most countries that have yet to reach a deal with the US now facing a lower tariff rate compared to those announced on April 2.However, there are some notable exceptions, as Switzerland, with its heavy pharmaceutical sector, will face a 39% tariff, and Canada will ‘pay’ for PM Carney’s intention to recognize the Palestinian state, with a 35% tariff rate applied to products not covered by the USMCA agreement. The new reciprocal tariffs will take effect from August 7, apart from Canada’s, which will begin today.Meanwhile, the elephant in the room is China. Despite another 90-day extension being agreed, a comprehensive and complete US-China deal remains elusive. If one adds Brazil and India into the mix, both of which are being penalized with high tariff levels for different reasons, and considering Trump’s intention to target other sectors, such as pharmaceuticals where 17 letters were sent out on Thursday, the door for further flare-ups remains wide open until the aforementioned countries give in to Trump’s demands.Risk-Off Reaction, but the US Dollar Is StableWhile the US dollar has not reacted materially to the latest tariff headlines, risk appetite took a sizeable hit yesterday, with the S&P 500 index quickly erasing its recent gains and ignoring the positive sentiment from the ongoing earnings season. Following the strong Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META) earnings, both Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) beat their respective EPS and revenue forecasts, but highlighted the treacherous outlook due to tariffs. Despite these developments, US equity indices managed to close July in the green, with the US 100 index leading the rally with a 2.4% gain.Meanwhile, cryptocurrencies remain under pressure this week, with Bitcoin hovering around the $115k level. The much-anticipated US crypto policy report held few surprises, apart from confirming the US administration’s commitment to making cryptocurrencies mainstream. Notably, despite this week’s wobbles, bitcoin posted an 8.3% jump in July, but was overshadowed by altcoins, with ether climbing by 49% and XRP adding 33% in the previous month.Notably, gold failed to benefit from yesterday’s risk off reaction and, at the time of writing, is hovering below the $3,300 level. The previous metal continues to trade inside the recent $3,260-$3,440 range, partly suffering from the recent dollar strength.Could Today’s Jobs Data Rejuvenate September Fed Cut Expectations?Amidst the current tariff-led uncertainty - partly confirming Fed Chair Powell’s insistence on patience until the tariff dust settles – and following the decent Q2 GDP report and the hotter-than-expected PCE inflation figures, the focus will shift to today’s US busy data calendar.Economists are looking for a 110k gain in the nonfarm payrolls figure, with the private sector expected to record a 100k increase. However, Wednesday’s solid ADP employment report and decent weekly jobless claims have somewhat fueled expectations for a stronger nonfarm payrolls print today and a possible boost to the dollar. This also means that a possible downside surprise, particularly if nonfarm payrolls drop to double-digit territory, could prove highly market-moving.With inflation running above target, a marked deterioration in the labour market is necessary for the September-February rate to be firmly back on the table. Therefore, today’s forecast for a modest increase in the unemployment rate to 4.2% might not be sufficient. Notably, two days have passed since the Fed meeting and we haven’t heard from FOMC members, particularly Waller and Bowman who voted for a rate cut on Wednesday.