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Markets steady as data cadence slows and underlying trends stay in place

Good morning. Foreign exchange markets are enjoying a quiet, range-bound session, with most currencies little changed against the dollar amid a lack of first-tier economic data and a paucity of geopolitical catalysts. Treasury yields are inching lower, equity futures are pointing to a modest drop in the Nasdaq at the open, and all of the major currency pairs are less than 0.1% off yesterday’s close. Oil markets are refusing to rally. Brent and West Texas Intermediate prices are holding near five-month lows even after a fully-laden Qatar-owned LNG carrier was struck by a projectile near the Omani coast while exiting...

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Holding steady

• US markets. US stocks rose with the tech sector leading the way. USD Index treads water. The AUD ticked up thanks in part to strength on the crosses.• Data flow. Limited data releases in Australia & the US. RBNZ meets tomorrow. Will the RBNZ deliver its first interest rate hike of this cycle? Global Trends It has been a relatively positive start to the new week in US markets. US equities rose overnight (S&P500 +0.7%), with the tech focused NASDAQ outperforming (+1.1%). Oversold semiconductor and AI stocks rebounded after last week’s falls. Elsewhere, long end bond yields held steady...

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Dollar shrugs off soft jobs data ahead of Fed minutes

Good morning. The dollar is holding firm even after Thursday’s disappointing non-farm payrolls report triggered a pullback in Federal Reserve tightening expectations. American employers added just 57,000 workers in June, far short of the 115,000 forecast, and revisions lopped a combined 74,000 from the previous two months. The unemployment rate fell to 4.2%, but not because of a pickup in hiring—labour-force participation dropped to 61.5%, its lowest since March 2021. With a no-hire, no-fire equilibrium persisting and wage pressures seen remaining contained, investors are placing 20% odds on a hike in July and 45% on a move by September, down...

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US jobs data underwhelms

• US jobs. Non-farm payrolls weaker than expected. Some noise in the monthly report. US Fed rate hike pricing pushed back. USD softer. AUD a bit firmer.• JPY focus. Reports out of Japan indicate officials may move to a less predictable FX intervention strategy. Will they step in during the US holiday? Global Trends Ahead of the US’ Independence Day long weekend markets were focused on the latest monthly jobs report. The topline results were generally weaker than predicted with US non-farm payrolls growth slowing to 57,000 in June (its smallest gain since the falls recorded in February), and the...

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US job creation slows, clobbering Fed tightening bets

The US job creation engine slowed in June, weighing on expectations for a renewed tightening cycle from the Federal Reserve in the second half of this year. According to the Bureau of Labor Statistics, just 57,000 jobs were added in the month—representing an undershoot relative to the 110,000 median consensus forecast—while the previous two months were revised down by a total 74,000 positions, lowering the three-month average pace of job creation to 111,000, from 188,000 ahead of the update. The unemployment rate ticked down to 4.2% from 4.3% in May, driven by employment gains that outpaced labour force additions. After...

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