• NASDAQ closed at new record levels each day of this trading week
• US Sen Warren seeks to assemble a group of Democratic senators to ask Biden to exit race
• Key events and releases for traders in the upcoming trading week
• Crude oil futures settle at $83.16
• Geopolitics: Head of Israel’s Mossad returned from Doha after initial cease-fire meetings
• Baker Hughes oil rig count 479 unchanged on the current week 101
• New York Fed Nowcast growth estimate for Q2 falls to 1.8% down from 1.93% last week
• European equity close: French stocks cautious ahead of Sunday’s vote
• SNB’s Jordan „relatively comfortable“ with inflation
• Fed mon pol report: Labor supply-demand balance resembles pre-pandemic period
• Rachel Reeves becomes Britain’s first female Chancellor
• Timiraos: The Fed may start the debate about a Sept cut at the upcoming meeting
• Putin: We see Orban’s visit as an attempt to restore the dialogue
• Canada June PMI 62.5 vs 52.0 expected
• The gold market may have found a second leg
• Kickstart the FX trading day for July 5 w/a technical look at the EURUSD, USDJPY & GBPUSD
• US dollar chops after non-farm payrolls
• Canada June employment change by -1.4K versus 22.5K estimate
• US May non-farm payrolls +206K vs +190K expected
• The JPY is the strongest and the USD is the weakest as the NA session begins
• What are the Fed odds saying ahead of the jobs report later?
• ForexLive European FX news wrap: On to the NFP next

The US jobs report showed Non-Farm Payroll up a greater than expected 206K vs 190K estimate. However, the details of the report were less than stellar.

• Revisions to prior 2 months was -111K. That more than offset the above expected growth this month.
• The unemployment rate moved to 4.1%. The highest rate since November 2021
• Average hourly earnings YoY came in at 3.9% which is the lowest level June 2021
• The gain in Non-farm payroll was helped by a large 70 K rise in government jobs private education and health also added 82K. The two sectors accounted for 74% of the total gain for the month
• Temporary help fell -48K which is indicative of a slowing job market
• Professional and business services fell -17 K
• Leisure and hospitality – a strong job grower in the post pandemic recovery and indicative of discretionary spending – rose only 7K .

Below is a summary of the jobs data:

The initial reaction in the forex market was the dollar moving higher, but those gains were quickly reversed as yields also reversed to the downside.

The USD is ending the day as the 2nd weakest of the major currencies behind the CAD. The largest declines were versus the GBP (-0.45%), the CHF (-0.49%) and the NZD (-0.48%).

In the US debt market, yields moved lower with the shorter end moving the most as traders increased the expectations for rate cuts in September and through the end of the year.

Looking at the yield curve, a snapshot shows:

• 2-year yield 4.605%, -8.7 basis points
• 5-year yield 4.226%, -8.3 basis points
• 10-year yield 4.278%, -6.9 basis points
• 30-year yield 4.475%, -4.4 basis points

For the trading week yields were solidly lower as well with :

• 2-year yield down -14.8 basis points
• 5-year yield down -14.9 basis points
• 10-year yield down -11.8 basis points
• The 30-year yield down -8.0 basis points

The declining yields also helped to push stocks higher and complete a week that saw the NASDAQ index close at record levels for each day the holiday shortened week.

• Dow Industrial Average average rose 0.17%.
• S&P index rose 0.55%.
• NASDAQ index rose 3.5%, its best week since April 22

Despite the sharp rise in broader stock indices, bitcoin had a horrible week on by nearly $6000 to -$56,718 currently.

Crude oil prices did rise by $1.62 or 1.99% despite being lower today by $0.72 for -0.86%.

This article was written by Greg Michalowski at www.forexlive.com.

All three major indices closed higher today. For the NASDAQ it closed higher for the fourth consecutive day. Each of those days was a new record close. The S&P index has higher for its fourth consecutive day with three of those closes being at new record levels.

A snapshot of the closing levels shows:

• Dow Industrial Average average rose 67.87 points or 0.17% at 39375.86
• S&P index rose 30.19 points or 0.55% at 5567.20.
• NASDAQ index rose 164.46 points or 0.90% at 18352.76

The small-cap Russell 2000 fell -9.89 points or -0.49% at 2026.72

For the trading week:

• Dow Industrial Average average +0.66%
• S&P index +1.95%
• NASDAQ index rose 3.5%
• Russell 2000-1.02%

For the trading year:

• Dow Industrial Average average of 4.47%
• S&P index +16.72%
• NASDAQ index plus a 22.26%
• Russell 2000 is unchanged this year

Some of the record highs today included Alphabet, Meta Platforms,, Amazon, Microsoft, Oracle, and Apple.

Tesla closed higher for its seventh consecutive day. For the trading week, shares rose by 27.12%. For the trading year, Netflix has erased all his losses and trade up 1.22% on the year. At session lows this year the price was down -109.68 points or -43%.

In comparison to the other 6 of the Magnificent 7

• Nvidia rose 1.85%, and is up 154.09% this year
• Meta Platforms rose 7.08%, and is up 52.53% this year
• Amazon rose 3.49%, and is up 31.63% this year
• Alphabet rose 4.64%, and is up 36.44% this year
• Apple rose 7.46%, and is up 17.56% this year
• Microsoft rose 4.61%, and is up 24.34% this year

Shares of Netflix are closing just below its record high close of $691.69 from November 17, 2021. The closing level today was $690.65, up 2.34% on the week.

Oracle shares closed higher by 2.57%, and is up 37.37% for the year

This article was written by Greg Michalowski at www.forexlive.com.

US Sen. Mark Warren is seeking to eight symbol a group of Democratic senators to ask Pres. Biden to exit the race for president. Biden has been losing support on Capitol Hill and also amongst his financial supporters according to sources..

This article was written by Greg Michalowski at www.forexlive.com.

Next week will events and key releases include the US CPI and PPI, U.S. Treasury auctions (three year, 10 year, 30-year). Reserve Bank of New Zealand interest-rate decision, and Fed Chair Powell’s testimony on Capitol Hill on Tuesday and repeated on Wednesday.

Sun, Jul 7

• All Day: EUR – French Parliamentary Elections

Mon, Jul 8

• No major events listed

Tue, Jul 9

• 10:00 am: USD – Fed Chair Powell Testifies on Capital Hill
• 1:01 PM ET: U.S. Treasury sells 3-year notes
• 9:30 pm ET: CNY – CPI y/y. Estimate 0.4% versus 0.3% last month
• 9:30 pm ET: CNY – PPI y/y. Estimate -0.8% versus -1.4% last month
• 10:00 pm ET: NZD – Official Cash Rate. No Change expected
• 10:00 pm ET: NZD – RBNZ Rate Statement

Wed, Jul 10

• 10:00 am ET: USD – Fed Chair Powell Testifies on Capital Hill
• 1:01 pm ET: USD – 10-y Bond Auction

Thu, Jul 11

• 2:00 am ET: GBP – GDP m/m. 0.2% versus 0.0% last month
• 8:30 am ET: USD – Core CPI m/m. 0.2% versus 0.2% last month
• 8:30 am ET: USD – CPI m/m. 0.1% versus 0.0% last month
• 8:30 am ET USD – CPI y/y. 3.1% versus 3.3% last month
• 8:30 am ET: USD – Unemployment Claims. Estimate 236K
• 1:01 pm ET: USD – 30-y Bond Auction

Fri, Jul 12

• 8:30 am ET: USD – Core PPI m/m. Estimate 0.1% versus 0.0% last month
• 8:30 am ET: USD – PPI m/m. Estimate 0.1% versus -0.2% last month
• 10:00 am ET: USD – Prelim UoM Consumer Sentiment. 67.0 versus 68.2 last month
• 10:00 am ET: USD – Prelim UoM Inflation Expectations. Last month 3.0%

This article was written by Greg Michalowski at www.forexlive.com.

A July move is a non-starter but the odds of a September rate cut are currently at ~80%. As for the year itself (four meetings left), a total of ~48 bps of rate cuts are being priced in. In other words, traders are seeing roughly two rate cuts by the Fed before year-end.

Looking at the balance of risks, I would argue that there is a strong sense that we could lean closer towards pricing in one rate cut rather than three rate cuts moving forward. Inflation developments still need to mark better progress, otherwise the Fed might continue to play down softness in other areas of the economy.

Meanwhile, I would say that the bar for the Fed to cut three times this year looks a little high. But one can argue that once they do get the ball rolling, there is a case to be made that they could continue to keep cutting in back-to-back meetings.

For now though, we’re not quite anywhere near that yet. It’s all about taking one data set at a time so let’s see what the jobs report today has to offer.

This article was written by Justin Low at www.forexlive.com.

Headlines:

• What NFP data could surprise the market?
• Labour party wins UK general election, beating 326-seat majority threshold in the Commons
• Bitcoin tumbles to its lowest since February as downside momentum intensifies
• Fed’s Williams: Still a way to go to reach our 2% target
• Germany May industrial production -2.5% vs +0.2% m/m expected
• Eurozone May retail sales +0.1% vs +0.2% m/m expected
• UK June Halifax house prices -0.2% vs -0.1% m/m prior

Markets:

• JPY leads, USD lags on the day
• European equities higher; S&P 500 futures flat
• US 10-year yields down 1.2 bps to 4.335%
• Gold up 0.3% to $2,364.04
• WTI crude flat at $83.85
• Bitcoin down 5.4% to $55,185

It wasn’t an exciting session as markets are caught waiting on the US jobs report later today.

The hangover from the US holiday yesterday isn’t helping, with a largely more tentative mood seen among FX as well during the session. The dollar is hanging in there after the more sluggish showing from the softer US ISM services PMI earlier in the week.

EUR/USD is marginally higher by 0.1% to 1.0820 while USD/JPY is down 0.3% to 160.80 on the day.

The pound barely reacted to the results of the UK general election, which went very much as expected. It was a complete domination by Labour and GBP/USD held steady at around 1.2770-80 levels for the most part.

Meanwhile, commodity currencies also barely moved with a range of 15 pips locking in USD/CAD, AUD/USD, and NZD/USD respectively.

It’s all on to the non-farm payrolls data next to see how that will shake things up before the weekend. Will we see a continuation to the flows after the US ISM services PMI? Or is the dollar going to have a chance to bounce back?

This article was written by Justin Low at www.forexlive.com.

• We still have a way to go to reach our 2% target on a sustained basis.
• We are committed to getting the job done.
• Uncertainty will continue to be the defining characteristic of the monetary policy landscape for the foreseeable future.

There’s nothing new here that he hasn’t already said recently.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Fundamental
Overview

After a couple of weeks of
consolidation, the S&P 500 this week found some footing and eventually
extended the rally into a new all-time high following the soft US Jobless Claims and ISM Services PMI reports.

Overall, the data didn’t
change much in terms of interest rates expectations, but it reinforced the view
that the Fed is going to deliver at least two rate cuts by the end of the year.
The soft-landing narrative is still the main driver of the market, and the data
is indeed backing it for now with ongoing disinflation and resilient economy as
we head into the easing cycle.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that after two weeks of consolidation, the S&P 500 reached a new all-time
high following some soft US data. From a risk management perspective, the
buyers will have a better risk to reward setup around the trendline. At the moment though, it’s hard to
envision such a big pullback unless we get some ugly US data.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action of the last couple of weeks with
the recent breakout. This is where the buyers are stepping in with a defined
risk below the resistance
now turned support to position for a rally into new highs. The sellers, on
the other hand, will want to see the price falling back inside the range to
position for a drop into the 5500 support.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a bit of consolidation now around the 5587 level as the market
awaits the US NFP report. If we get bad data, the market might go into risk-off
and we will likely see the sellers piling in aggressively for a selloff into
the 5500 support.

The buyers will want to see
a good or benign report which could even lead to a dip-buying opportunity on a possible
pullback into the 5560 zone. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US NFP report where the data is expected
to show 190K jobs added in June and the Unemployment Rate to remain unchanged
at 4.0%.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

In the Asian session, Eamonn published a nice article on the range of estimates for today’s US NFP report. These ranges are important in terms of market reaction. Here’s what Eamonn wrote on this topic:

WHY THE RANGE OF ESTIMATES IS IMPORTANT

Data results that fall outside of market low and high expectations tend to move markets more significantly for several reasons:

• Surprise
  Factor: Markets often price in expectations based on forecasts and
  previous trends. When data significantly deviates from these
  expectations, it creates a surprise effect. This can lead to rapid
  revaluation of assets as investors and traders reassess their positions
  based on the new information.

• Psychological
  Impact: Investors and traders are influenced by psychological factors.
  Extreme data points can evoke strong emotional reactions, leading to
  overreactions in the market. This can amplify market movements,
  especially in the short term.

• Risk
  Reassessment: Unexpected data can lead to a reassessment of risk. If
  data significantly underperforms or outperforms expectations, it can
  change the perceived risk of certain investments. For instance,
  better-than-expected economic data may reduce the perceived risk of
  investing in equities, leading to a market rally.

• Triggering
  of Automated Trading: In today’s markets, a significant portion of
  trading is done by algorithms. These automated systems often have
  pre-set conditions or thresholds that, when triggered by unexpected
  data, can lead to large-scale buying or selling.

• Impact
  on Monetary and Fiscal Policies: Data that is significantly off from
  expectations can influence the policies of central banks and
  governments. For example, in the case of the NFP due today, a weaker
  jobs report will fuel speculation of nearer and larger Federal Open
  Market Committee (FOMC) rate cuts. A stronger report will diminish such
  expectations.

• Liquidity
  and Market Depth: In some cases, extreme data points can affect market
  liquidity. If the data is unexpected enough, it might lead to a
  temporary imbalance in buyers and sellers, causing larger market moves
  until a new equilibrium is found.

• Chain
  Reactions and Correlations: Financial markets are interconnected. A
  significant move in one market or asset class due to unexpected data can
  lead to correlated moves in other markets, amplifying the overall
  market impact.

WHY THE DISTRIBUTION OF FORECASTS IS IMPORTANT

Another important input in market’s reaction is the distribution of forecasts. In fact, although the range of estimates for the US unemployment rate today is 3.9%-4.1%, only 8.7% of forecasters see a 4.1% rate, while 71% expect 4.0% and 20.3% anticipate 3.9%.

This means that even if the unemployment rate prints within the range of estimates at 4.1%, it would still be seen as a surprise and trigger a big market reaction. I can see the market going into risk-off on a 4.1% unemployement rate.

For the Non-Farm Payrolls, although the range of estimates is between 140K and 250K, a number outside the 170K-230K range would be seen as a surprise.

Lastly, for the Average Hourly Earnings Y/Y, 66% of forecasters see a 3.9% figure, while 17.3% expect 4.0% and 17.2% a 3.8% reading.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Headlines:

• The UK heads to the polls today
• What has changed after yesterday’s US data?
• Bitcoin drops again, faces mounting technical pressure
• ECB’s Lane: Wage tracker shows much lower wage growth in 2025 and 2026
• ECB accounts show some mixed views on confidence towards inflation outlook
• Germany May industrial orders -1.6% vs +0.5% m/m expected
• Germany June construction PMI 39.7 vs 38.5 prior
• UK June construction PMI 52.2 vs 53.6 expected
• Switzerland June CPI +1.3% vs +1.4% y/y expected

Markets:

• JPY leads, USD lags on the day
• European equities higher; CAC 40 +0.8%
• Gold up 0.1% to $2,358.40
• WTI crude down 0.8% to $83.17
• Bitcoin down 3.1% to $57,667

With it being a US holiday, there wasn’t much for traders to work with as well in European morning trade today.

The dollar remains sluggish, keeping with the mood from yesterday after the softer US ISM services PMI data. The greenback was lightly changed early on but is now down a touch across the board.

The changes in the euro and pound are light but USD/JPY is down 0.4% to test waters back under 161.00 on the day. Besides that, USD/CHF is also down 0.2% to 0.8995 and AUD/USD up 0.4% to 0.6730 currently.

In the equities space, European indices were more tentative early on but are now picking up steam again with French stocks continuing to rally ahead of the second round of the elections this weekend. Regional markets also seem to pass the test of the latest French 10-year bond auction earlier in the day.

Besides that, there is a bit of focus on Bitcoin as it tumbles further to its lowest levels since early May. The cryptocurrency is under pressure on a fall back below $60,000, with key technicals being challenged on the week.

Liquidity conditions will be thin in US trading later, so just be wary of that with the greenback starting to see its resilience crack this week. All this ahead of the non-farm payrolls data tomorrow.

This article was written by Justin Low at www.forexlive.com.