Strong U.S. Jobs Data Lowers Rate Cut Odds, Lifts Yields and Stocks to Record Highs- 03.07.2025

This financial markets daily summary highlights today’s key themes across global assets. From U.S. jobs data and Fed caution to European bond moves and Asia’s mixed sentiment, investors navigate an uncertain backdrop.

Financial Markets Daily Summary: United States

July 2 highlights

• The S&P 500 and Nasdaq closed at record highs amid trade optimism and a rally in tech stocks.
• Treasury yields rose modestly ahead of Friday’s non-farm payrolls report; the 10-year yield ended around 4.34%.
• A UBS survey revealed growing concerns among central banks about the Fed’s independence and legal stability in the U.S., prompting some to boost gold reserves.

July 3 outlook

• Markets anticipate the June payrolls report, with estimates around 147k jobs added and unemployment holding near 4.3%.
• Fed officials remain cautious, suggesting a “meeting-by-meeting” approach with rate cuts unlikely before late 2025.
• Investors are watching developments around the large fiscal package (“One Big Beautiful Bill”) that could add over $3 trillion to the U.S. debt load.

Financial Markets Daily Summary: Europe and UK

• Europe: The STOXX 600 rose modestly, supported by gains in renewable energy and auto sectors. Bank bonds stabilized after volatility driven by UK debt concerns.
• UK: Gilt yields declined slightly after prior turbulence linked to uncertainty over fiscal policy. Equities edged higher as political noise subsided.

United Kingdom Economic Overview

• UK equities posted slight gains. The bond market stabilized following sharp moves driven by political and fiscal uncertainty around leadership in the Treasury.

Asia and China Economic Trends

• China: Mainland blue-chip stocks rose ~0.6% amid expectations for further stimulus. However, services PMI data remained weak, reflecting tepid domestic demand.
• Broader Asian markets were mixed, with cautious sentiment prevailing ahead of the U.S. payrolls report.

Emerging Markets and EMEA Snapshot

• India: The rupee strengthened to around 85.60 per USD, supported by optimism over a potential U.S.–India trade deal and weak U.S. private payroll data.
• Other Asian EM currencies (yen, won, ringgit, baht) mostly weakened amid concerns over potential U.S. tariffs and global trade uncertainty.

Commodities and Crypto Overview

• Oil: Brent crude declined slightly to ~$68.6 per barrel after Iran paused its cooperation with the U.N. nuclear agency, adding geopolitical complexity.
• Gold: Slight decline, but remains supported by continued central bank demand amid concerns over global legal and fiscal stability.
• Crypto: No major headlines; market remains range-bound amid broader risk-on sentiment in equities.
  
  

Key Takeaways and Market Themes:

• Markets are fixated on Friday’s U.S. jobs data.
• Fed remains cautious, pushing potential rate cuts into late 2025.
• Global bond markets are stabilizing, though political risks and fiscal headlines remain under scrutiny.