The US dollar is set to end the week lower despite strong June jobs data (147K jobs, 4.1% unemployment) as fiscal and trade uncertainties weighed on sentiment. The euro stayed just below $1.18, supported by optimism around ECB policy and cautious EU stance before US tariff decisions. The pound held steady after PM Starmer backed Chancellor Reeves, with markets still expecting a BoE cut in August. The yen is on track for weekly gains, supported by strong household spending data and a softer dollar amid trade uncertainty.
Gold rose to $3,330, heading for a weekly gain on US fiscal and trade concerns, though gains were capped by strong US jobs data. Silver held above $36.80 near 13-year highs, supported by trade tensions but limited by the labor report. Brent crude is set for a 2% weekly gain, recovering from a selloff, supported by the US-Vietnam trade deal, while supply concerns persist ahead of an OPEC+ hike and new US sanctions on Iran.
US 10-year yields ended the week at 4.35%, as strong jobs data reduced Fed rate cut expectations. Markets priced out a July cut and lowered September odds to 80%. Powell reiterated a cautious, data-dependent stance. Japan’s 10-year yield is set to end lower despite strong domestic data, as trade uncertainty weighed after Trump signaled new tariff plans, with prior threats of up to 35% on Japanese goods.
The UK economy expanded by 0.7% quarter-on-quarter in Q1 2025, matching earlier estimates and marking the strongest growth in a year. The services sector rose 0.7%, driven by a 3.7% increase in administrative and support services and 1.6% in wholesale and retail trade. Production climbed 1.3%, with manufacturing up 1.1%, led by transport equipment at 2.8% and machinery at 4%. Investment rose, with gross fixed capital formation up 2% and business investment increasing 3.9%. Net trade contributed positively as exports grew 3.3% and imports 2%, while household consumption rose 0.4%. Public spending declined by 0.4%. Annually, GDP increased by 1.3%, slightly lower than Q4’s 1.5%.
Germany’s annual inflation eased to 2.0% in June from 2.1% in May, falling below expectations of 2.2% and reaching its lowest since October 2024. Service inflation moderated to 3.3%, while goods inflation declined to 0.8%. Food price growth slowed to 2%, and energy prices dropped 3.5%. Core inflation, excluding food and energy, dipped to 2.7%, while monthly consumer prices remained flat after a 0.1% rise in May.
The Chicago Business Barometer slipped slightly to 40.4 in June from 40.5 in May, missing expectations of 43 and marking 19 consecutive months below 50. Production, employment, and order backlogs declined, while new orders rebounded. Inventories fell, and order backlogs hit their lowest since May 2020. Prices paid surged to their highest since May 2022, with 70% of firms reporting higher input costs.
Inflation in the Eurozone edged up to 2.0% year-on-year in June, from 1.9% in May, aligning with the ECB’s target. Germany saw a surprise decline in inflation, while France and Spain recorded modest increases. Services inflation accelerated to 3.3%, while energy price declines slowed. Inflation for non-energy goods eased slightly, and core inflation held steady at 2.3%, its lowest since January 2022.
The PMI rose to 52.9 in June from 52 in May, marking the sharpest expansion in factory activity in over three years. Output grew for the first time in four months, and new export orders increased despite tariff pressures. Employment rose at the fastest pace since September 2022, while input and output prices climbed at the fastest rate in nearly three years, reflecting strong demand.
The ISM Manufacturing PMI edged up to 49 in June from 48.5 in May, indicating a slower contraction. Production and inventories improved, while new orders, employment, and order backlogs fell further. Inflationary pressures increased slightly, with tariffs contributing to rising costs. Supplier delivery performance showed improvement, signaling easing supply chain constraints.
US private payrolls fell by 33,000 in June, the first decline since March 2023, missing forecasts of a 95,000 gain. Service sectors saw significant losses, while goods-producing sectors added jobs, including gains in manufacturing and construction. Wage growth for job-stayers eased to 4.4%, and for job-changers to 6.8%, indicating a cooling labor market.
Average hourly earnings increased by 0.2% in June to $36.30, slowing from May’s 0.4% rise. Year-on-year, earnings rose 3.7%, the slowest pace in nearly a year, indicating moderating wage pressures.
Initial claims fell by 4,000 to 233,000, below expectations, while continuing claims remained at 1.964 million, indicating a gradual softening in the labor market while remaining historically strong.
Nonfarm payrolls increased by 147,000 in June, above the forecast of 110,000, while the unemployment rate fell to 4.1%. Government and healthcare led job gains, reflecting continued labor market resilience despite ongoing policy and trade uncertainties.
The unemployment rate decreased to 4.1% in June from 4.2% in May, defying expectations of a rise to 4.3%. Labor force participation edged lower to 62.3%, while employment rose modestly, indicating a stable labor market.
The Services PMI dipped to 52.9 from 53.7 in May, still indicating steady growth in the services sector, supported by rising domestic demand despite export declines due to tariff concerns.
The ISM Services PMI increased to 50.8 in June from 49.9 in May, signaling a return to growth in the services sector. Business activity and new orders rose, while price pressures remained elevated, with tariffs cited as a key concern.
The US dollar index is set to end the week lower despite strong jobs data, with markets adjusting Fed rate cut expectations. The euro traded just below $1.18, its highest since August 2021, supported by ECB policy signals, while the pound remained steady amid dovish BoE commentary. The yen strengthened, supported by strong domestic spending data and trade uncertainty, as Trump’s tariff threats added pressure.
Gold traded around $3,330, supported by fiscal concerns despite a strong jobs report. Silver held firm above $36.80, nearing 13-year highs, supported by safe-haven demand amid trade uncertainty. Brent crude rebounded over 2% for the week, supported by a US-Vietnam trade deal, though OPEC+ supply increases and fresh US sanctions on Iran’s oil trade weighed on sentiment.
US stocks rose over 0.8% on Thursday, with the S&P 500 and Nasdaq 100 hitting record highs after NFP data beat expectations. Tech stocks led gains, supported by strong AI-related earnings and lifted export restrictions on chip design software to China. Market optimism was further supported by the passage of Trump’s $3.4 trillion tax-and-spending package and progress on US-Vietnam trade negotiations.
The US dollar strengthened on Friday after President Trump announced a 35% tariff on Canadian imports and signaled potential EU tariffs, increasing safe-haven demand.
The dollar weakened on Thursday after Fed minutes revealed policymakers see rate cuts as likely later this year, pushing Treasury yields lower and lifting the euro and pound.
Detail Commodities Slip as Markets Brace for FOMC Minutes (07.09.2025)EUR/USD slipped toward 1.1700 ahead of the FOMC minutes, while the Japanese yen weakened past 147 for a third session as tensions over US-Japan trade talks deepened.
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