- US June non-farm payrolls +147K vs +110K expected
- US June ISM services index 50.8 vs 50.5 expected
- US initial jobs claims 233K versus 240K estimate
- US factory orders for May 8.2% versus 8.2% estimate
- US May trade balance -71.5B vs -71.0B expected
- Canada May trade balance -5.90B vs -5.90B expected
- Bessent: Expect to see about 100 countries get minimum 10% reciprocal tax
- Fed’s Bostic: Significant risk that upward pressure on prices will be around for some time
- Atlanta Fed Q2 GDPNow 2.6% vs 2.5% prior
- Kremlin: Putin said Russia ready to keep talking on Ukraine
- Bessent: I’ll leave the rockets to Elon, he can leave the finances to me
- Bessent: Does not believe CBO estimates. Is sure the US will grow faster than deficit
- Zelenskyy: Ukraine is ready for a meeting of leaders to end the war
- Geopolitics: Hamas is inclined to accept a proposal for 60-day cease-fire
- Baker Hughes oil rig count -7 to 425
- US June S&P Global final services PMI 52.9 vs 53.1 prelim
Markets:
- S&P 500 up 0.8%
- WTI crude oil down 26-cents to $67.19
- US 10-year yields up 5.5 bps to 4.35%
- Gold down $28 to $3328
- USD leads, JPY lags
The soft ADP employment report on Wednesday left the market anxious ahead of non-farm payrolls but the headline was strong, even if some of the details took the shine of the report. The US dollar initially surged 40-100 pips led by USD/JPY. Those gains against the pound and commodity currencies were erased in short order but USD/JPY hung onto a 100 pips gain, though failed to extend it as trading thinned later in the day due to the US holiday.
The euro was choppy. It fell to 1.1720 from 1.1780 on the NFP headline only to climb all the way back in the next two hours. From there though, the sellers returned and it slid to 1.1750. Some of the selling might relate to tariff angst with US and EU officials set for intense discussions over the weekend. It’s tough to imagine they will get to the finish line without some kicking and screaming on Truth Social.
Treasury Secretary Scott Bessent did offer some concrete details on trade late in the day as he said about 100 countries will get 10% tariff rates. It will be interesting to see how that unfolds but the thinking is increasingly that trading partners will just have to tolerate the competitive moat without retaliating.
Happy 4th of July.
This article was written by Adam Button at www.forexlive.com.