North American Summary and Highlights 3 Jul
Overview - The USD bounced on a stronger than expected US employment headlines but with details mixed only USD/JPY was able to sustain its gain, responding to higher UST yields.
North American session
US non-farm payrolls saw a stronger than expected 147k increase with a fall in unemployment to 4.1% from 4.2%, but details were mixed with private payrolls at 74k and average hourly earnings at 0.2% both weaker than expected. At the same time weekly initial claims fell to 233k from 237k in a third straight decline. Later ISM services rose to 50.8 from 49.9 and in the afternoon the House passed the Senate’s budget bill, sending it on to President Trump.
The USD initially bounced on the employment report and UST yields rose with the fall in unemployment making a July ease look unlikely. However, the bounce was sustained only for USD/JPY, which rose over a big figure to 145. Other pairs largely returned to near pre-data levels, which is where GBP/USD and AUD/USD broadly remained. EUR/USD at 1.1750 ended below pre-data levels but off post-data lows while USD/CAD after bouncing above 1.37 on the data fell slightly below pre-data levels.
European morning session
The USD was little changed in a quiet European morning. GBP made a modest recovery after Wednesday’s losses, helped by PM Starmer saying Chancellor Reeves was doing an excellent job, undermining speculation that she would be sacked or would resign. GBP was also helped by an upward revision in UK June PMI to 52.0 from 50.7, due to an upward revision in services. Eurozone PMI was also revised higher, albeit more modestly.
Swiss CPI came in above the 0.1% consensus at 0.2% m/m in June and EUR/CHF initially dipped to a low of 0.9322 before rebounding above opening levels to 0.9345.