The opening of the G20 meeting today will most likely be completely sidelined by financials since, as usual, no key decision will be taken there. Maybe we’ll get some action should Donald Trump make another incredible declaration that only he knows how to make. The key event this Friday is the June US jobs report which is due for release at GMT 12:30. After disappointing substantially last month as it printed at 138k versus 182k median forecast, June’s non-farm payrolls are expected to come in at 178k.
However, the fact that the continuous improvement of the past months in the job market has failed to translate into sustained wage pressure has considerably diminished investors’ interest for this data. Average hourly earnings are expected to have risen 2.6% y/y last month, compared to 2.5% in May. Finally, the unemployment and participation rate should remain stable at 4.3% and 62.7% respectively.
EUR/USD inched up 0.75% yesterday and is on its way to test the 1.1445 resistance from June 30th. We remain constructive on the euro as we anticipate the ECB is finally on its way to start talking - even cautiously - about reducing its support to the economy, while the Federal Reserve will likely be forced to slow down its tightening pace against the backdrop of weakening inflationary pressure.
By Arnaud Masset