Morning Commentary: Thursday 3rd July

Markets are looking ahead to the NFP report today, following poor results from yesterday’s ADP Non-Farm Employment data.The data is likely to show slower hiring and the highest unemployment rate since 2021, as the Trump administration’s trade and immigration policy shifts begin to leave an imprint.

Following the ADP report, at least two rate cuts are now forecast — the first expected in September — with today’s figures having the potential to expedite them.

There was a broad USD sell-off yesterday, but the GBP weakened against peers due to concerns about Chancellor of the Exchequer Rachel Reeves’ future.

UK Prime Minister Keir Starmer confirmed Reeves will remain Chancellor, aiming to end speculation about her position that triggered a bond sell-off.

House Republican leaders struggled to find the final votes needed to advance Trump’s massive tax and spending package.

Trump has struck a deal with Vietnam: a 20% tariff will be placed on Vietnamese exports to the US, with a 40% levy on goods deemed to be transshipped through the country.

Bloomberg Economics says the deal is likely to provoke China.

• Bitcoin rose 0.1% to $109,375.11

• Ether fell 0.1% to $2,588.57

• Spot gold was little changed

• Crude fell 0.7% to $66.95

Aside from the NFP report,  we have the US ISM Services PMI at 3:00 PM. 

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