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Markets held steady ahead of US non-farm payrolls and ISM services PMI releases, with bond yields stabilizing, equities at fresh highs, and trade and fiscal policy developments providing additional backdrop.
📉 US trade deficit widens to $71.5 B in May
In May, the US goods and services trade deficit jumped 18.7% to $71.5 billion, as exports of industrial supplies and capital goods fell 4.0%, while imports dipped only 0.1% to $350.5 billion.
A larger trade deficit subtracts from GDP growth and signals slowing external demand for US manufacturers, potentially weighing on industrial equities and real-estate-linked sectors.
📊 Weekly jobless claims fall to six-week low
For the week ending June 28, initial jobless claims decreased by 4,000 to 233,000—the lowest since mid-May—beating forecasts of 240,000. Continuing claims held near 1.964 million.
Stabilizing initial claims support consumer spending and equities, but persistently elevated continuing claims caution that long-term unemployment remains a drag on household income.
⚖️ June labor data paints conflicting picture
ADP’s June report showed private-sector payrolls fell by 33,000—the first drop in over two years—while the Labor Department reported nonfarm payrolls rose by 147,000 and unemployment dipped to 4.1%. Markets cut odds of a July Fed rate cut from 25% to 5%.
Divergent private and public metrics make gauging labor-market momentum harder, keeping the timing of Fed easing uncertain and maintaining volatility in fixed-income yields and equity sentiment.
🪙 Bitcoin gains on strong ETF inflows
Bitcoin climbed 1.7% to $109,758—close to its all-time high—as institutional inflows into spot Bitcoin ETFs neared $50 billion over three months.
Growing institutional participation may dampen crypto volatility over time and bolster Bitcoin’s case as a portfolio diversifier for long-term investors seeking alternative assets.
🏦 ECB signals pause on rate cuts amid trade uncertainty
At its June meeting, the European Central Bank delivered its eighth rate cut in a year but warned that erratic global trade policy—especially US tariff shifts—could stall momentum, suggesting a pause in further easing.
A pause keeps borrowing costs in the euro area higher than expected, supporting the euro and tempering export-led growth, with ripple effects for currency and fixed-income allocations.