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Hello everyone, today XM Forex will bring you "[XM Forex Market Review]: The US Treasury Secretary warns that tariffs may return to April 2 levels, and strong non-agricultural measures to suppress the Federal Reserve's expectation of interest rate cuts." Hope it will be helpful to you! The original content is as follows:
On Friday (July 4, Beijing time), spot gold traded around $3,330 per ounce, and gold prices fell 1% on Thursday as stronger-than-expected U.S. employment data consolidated the Fed's expectation that it was unlikely to cut interest rates early as previously expected, weakening the attractiveness of gold; oil prices fell slightly on Thursday, with investors worried that U.S. tariffs could slow energy demand and major crude oil producers expected to increase supply. Due to the US Independence Day holiday, market trading is light.
U.S. stocks rose on Thursday, a record high, with chip maker Nvidia approaching $4 trillion, and investors were excited by the unexpectedly strong U.S. jobs report, who were slim about the U.S. rate cut this month.
The S&P 500 and Nasdaq both closed at record highs, rising for the third consecutive week. The Dow Jones Industrial Average closed up 0.41%, close to its all-time high.
Chip maker Nvidia rose 1.3% to a market value of $3.89 trillion. The www.edoyoko.company is about to surpass Apple to become the world's highest-capitalized www.edoyoko.company in history. Friday is the Independence Day holiday, trading hours are shortened on Thursday and trading volume is shrinking.
Kristina Hooper, chief market strategist at ManGroup in New York, said: "We are going through a truly irrational boom; the stock market is very tilted to optimism. But there is some basis. I think people are relieved to some extent because the employment report is not as weak as expected." She said the rise was invested by retail investors.Promoted by investors, they basically ignore the upcoming inflationary pressure and tariff uncertainty, and "focus on real things, that is, today's employment report."
The S&P 500 rose 0.83% to 6279.36 points; the Nasdaq rose 1.02% to 20,601.10 points; the Dow Jones Industrial Average rose 0.77% to 44,828.53 points.
Data showed that non-farm jobs increased by 147,000 in June, 33% more than the 110,000 forecast by economists surveyed by Reuters. The unemployment rate fell to 4.1% in June, better than expected by 4.3%.
Traders quickly ruled out the possibility of a rate cut in July, and according to CME’s Fedwatch tool, the market expects a 68% chance of a 25 basis point cut in September, down from 74% a week ago.
The U.S. House of Representatives passed President Trump’s massive tax cuts and spending bill under the impetus of Republican lawmakers, overcoming the party’s differences over its costs.
Non-partisan analysts said the bill is expected to increase the current U.S. debt of $3.4 trillion over the next decade.
Sharp tax cuts and increased government spending can stimulate demand in the economy. This could increase inflationary pressure, especially as the economy shows strong signs, such as the latest jobs report.
F/mInvestments CEO Alex Morris said, “Some of the data such as the jobs report are positive and attractive, but if we take a step back, the situation is less optimistic.
This week, the S&P 500 rose 1.72%, the Nasdaq rose 1.62%, and the Dow rose 2.3%. The Russell 2000 small-cap index rose 3.41%. Morris said, “It’s a little confusing and it feels like the last bull market that has been really summed up before.” ”
U.S. stock market closed early at 1:00 p.m. ET. U.S. stock exchanges accumulated 10.85 billion shares, well below the average daily trading volume of 17.82 billion shares over the past 20 full trading days.
Gold fell 1% on Thursday as stronger-than-expected U.S. employment data consolidated expectations that the Fed was unlikely to cut interest rates early as expected, weakening the attractiveness of gold.
Spot gold fell 0.9% to 3,328 ounces .63 USD, down more than 1% at the beginning of the session. U.S. gold futures closed up 0.4% to $3,342.9.
The U.S. dollar and U.S. stock index futures rose after the U.S. Bureau of Labor Statistics announced that non-farm jobs increased by 147,000 last month. Economists surveyed by Reuters had previously predicted that 110,000 jobs would increase. The strengthening of the dollar made gold more expensive for overseas buyers.
David Meger, head of metal trading at HighRidge Futures, said"Better-than-expected employment means we think the possibility of the Fed cutting interest rates early is less than expected. Therefore, the strengthening of the dollar has added pressure to the gold market," the key is that the idea or possibility of a rate cut in July is no longer there. "
Investors currently expect the Fed to cut interest rates from October and cut interest rates by 51 basis points by the end of the year, lower than the forecast of about 66 basis points before the report was released.
Spot silver was $36.84 per ounce, up 0.7%; platinum was $1374.89, down 3.1%; palladium was $1137.69, down 1.5%.
Oil prices fell slightly on Thursday, with investors worried that U.S. tariffs could slow energy demand and major crude oil producers expected to increase supply.
Brent crude oil futures fell 0.45% and settled at $68.80 per barrel, U.S. crude oil Futures fell 0.67% to settle at $67.00 a barrel. Trading volume was smaller on the eve of the Independence Day holiday.
The 90-day moratorium on President Trump’s tariff hikes will end on July 9, while several large trading partners, including the EU and Japan, have not yet reached a trade deal. Oil traders are concerned that this will have an impact on economic and fuel demand.
The preliminary trade deal between the United States and Vietnam boosted oil prices on Wednesday, but the uncertainty of overall tariffs remains high.
OPEC+ is expected to agree to increase production by 411,000 barrels per day at a policy meeting this weekend, which also puts pressure on oil prices. U.S. crude oil inventories have increased unexpectedly, which is also Intensified concerns about the country.
The U.S. Energy www.edoyoko.comrmation Administration (EIA) announced on Wednesday that U.S. domestic crude oil inventories rose by 3.8 million barrels last week to 419 million barrels. A Reuters survey analysts had previously expected inventory to drop by 1.8 million barrels.
The U.S. energy services www.edoyoko.company Baker Hughes reported on Thursday that U.S. energy www.edoyoko.companies will cut seven active oil rigs this week, the least since September 2021. This is an indicator of future output.
The U.S. job growth was steady in June and the unemployment rate fell unexpectedly. However, nearly half of the new non-farm jobs came from government departments, while private sector jobs increased Growth slowed sharply, industries such as manufacturing and retail are struggling to cope with Trump's drastic hike in tariffs on imported products. David Laut, chief investment officer of Abound Financial, said: Thursday's job report was stronger than expected, which shows that the economic resilience we have seen in the past few months is still intact. We still expect the Fed to continue to take a wait-and-see attitude towards interest rates.
The dollar rose against major currencies such as the yen, the euro and the Swiss franc on Thursday after data showed that the U.S. economy created more jobs than expected, suggesting that the Fed may take longer to cut interest rates.
The U.S. dollar rose 0.94 against the yen%, to 145.075 yen, up 0.39% against the Swiss franc to 0.7955 CHF. The US dollar is expected to rise against the two safe-haven currencies for the second consecutive trading day. The euro fell 0.41% to $1.175,350, a second straight day of decline.
The U.S. Department of Labor released data on Thursday showed that non-farm jobs increased by 147,000 in June. Economists surveyed by Reuters had previously predicted an increase of 110,000. Since July 4 is the U.S. Independence Day holiday, the report was released one day in advance. "In such a strong labor market, it will be very difficult for the Fed to cut interest rates," said Axel Merk, president and chief investment officer of MerkHardCurrencyFund in California. "Powell's argument that the Fed maintains a wait-and-see stance remains tenable."
The dollar index for a basket of currencies such as the yen and the euro rose 0.40% to 97.135, rising for two consecutive trading days, but is still close to multi-year lows.
After the data was released, the US dollar rose, while U.S. Treasury yields also rose. The two-year U.S. Treasury yield, which usually fluctuates in line with Fed rate expectations, rose 9.7 basis points to 3.789%. The benchmark U.S. 10-year Treasury yield rose 5.5 basis points to 4.348%.
U.S. stocks rose, with indicators S&P 500 and Nasdaq hitting intraday highs. "From the current situation, the U.S. economy is expected to outperform the rest of the year, which is why we have seen such a strong reaction in the last three weeks. The dollar has fallen about 13% against the euro since February. This is largely due to speculation that the Fed will cut interest rates sooner or later," said Joseph Trevisani, senior analyst at FXStreet. Thursday's economic data have dispelled those expectations.
According to CME’s Fedwatch tool, the market expects the possibility that the Fed will keep interest rates unchanged at its July meeting rose to 95.3% from 76.2% a day ago.
The U.S. House of Representatives passed a massive tax cut and expenditure bill proposed by President Trump on Thursday and sent it to Trump for signature into law.
U.S. Treasury Secretary Bescent Besent said in an interview with Bloomberg that he expects a series of trade agreements to be reached before the expiration of the tariff moratorium on July 9.
The pound rose, falling on the previous trading day as British Treasury bonds were sold. British Prime Minister Stamer's office supports Chancellor Reeves, alleviating concerns about her future. The pound rose 0.07% against the dollar to $1.3646.
Russian President Putin and U.S. President Trump discussed the Ukraine issue during the call Thursday. The Kremlin has suggested that Trump's efforts to push for a ceasefire have made little progress. Kremlin's foreign policy assistance"Donald Trump once again mentioned the issue of stopping hostilities as soon as possible," Yuri Ushakov told reporters. Ushakov added that Putin said Russia "will not give up" its war goals. The call between the two leaders lasted nearly an hour on Thursday. Ushakov called the talks "frank, pragmatic and specific", adding that leaders of the two countries agreed to continue www.edoyoko.communication soon. He said Putin and Trump also discussed the situation in Iran and the Middle East in "quite in detail". He said the two leaders did not discuss the meeting or talk about the U.S. decision to stop providing weapons to Ukraine.
The U.S. trade deficit widened in May because U.S. exports fell. According to the U.S. Department of www.edoyoko.commerce, imports fell slightly to $350.5 billion in May, down from $350.8 billion in April. But exports fell even more, from $290.6 billion in April to $279 billion. This led to a trade deficit of $71.5 billion, up 19% from $60.3 billion in April, higher than economists' expectations of $70.9 billion. The White House's negotiating stance has caused large fluctuations in monthly trade data this year.
The U.S. Treasury prices plummeted, and the stronger-than-expected non-farm employment report prompted traders to withdraw bets on the Federal Reserve's interest rate cut this month. Short-term Treasury bonds led the decline, with 2- and 5-year yields rising by nearly 10 basis points, and 10-year yields jumped by 6 basis points to 4.34%. Gregory Faranello, head of U.S. interest rate trading and strategy at AmeriVet Securities, said there is almost no possibility of a rate cut in July, "the Fed will suspend actions in the summer", and "employment data is the key to the Fed's policy adjustment", and the report provides room for Powell to continue to hold back. Interest rate swap data show that traders believe the possibility of a rate cut from July 29-30 has dropped to nearly zero, while the probability of a rate cut in September is about 75%. Data shows that the number of non-farm employment increased by 147,000, significantly higher than the median estimate of 106,000 obtained by Bloomberg, and the data was slightly revised in the first two months. The unemployment rate fell from 4.2% to 4.1%.
The U.S. Department of Labor released data on Thursday that seasonally adjusted initial unemployment claims fell by 4,000 to 233,000 in the week ended June 28, a six-week low since mid-May, lower than economists’ forecast of 240,000. However, the total number of renewed unemployment benefits for the week ended June 21 remained at a high of 1.964 million, the highest level since the fall of 2021.
U.S. Treasury Secretary Bescent warned U.S. trading partners not to extend trade negotiations, saying that tariffs could rebound if no progress is madeto April 2 levels. Becente revealed that he will meet with EU negotiators today. When asked about the results of the discussion, he simply said, "We will see what happens with the EU." On the issue of U.S. debt, Becent expressed confidence in market demand. He said “there is a lot of demand for U.S. Treasury bonds,” and demand for U.S. Treasury bonds at home and abroad remain strong. He described the debt management process as “methodical.” Becent also www.edoyoko.commented on interest rates, suggesting that “two-year Treasury bonds tell you that overnight interest rates are too high” and that “inflation expectations should fall.” He criticized the Fed, saying the www.edoyoko.committee's judgment "seems a bit biased." Regarding the Fed's operations, Becent said, "It is beneficial for the Fed to control spending" and he hopes to "see the Fed's reasonable adjustment to the size of its budget." When asked if he wanted Fed Chairman Powell to resign, Becent refused to give a specific response. He noted that there were “a lot of strong candidates for Fed chair” and mentioned the possibility of “filling two Fed board positions next year.”
The 27th Senate election in Japan issued an announcement on the 3rd, and the candidate registration was launched on the day of acceptance. The voting date is scheduled for the 20th of this month. In last year's House election, the ruling alliance between the Liberal Democratic Party and the Komeito Party failed to win more than half of the seats. Japanese experts and scholars said that Ishiba's cabinet is currently facing many issues and the Senate election may face severe challenges.
According to CCTV News, according to the official website of Ukrainian Supreme Lada (Parliament) on July 3 local time, Ukrainian President Zelensky signed a bill to amend the Budget Code, allowing the transfer of mineral mining funds to the Ukrainian-US reconstruction investment fund. On May 1, local time in Ukraine, Ukrainian First Deputy Prime Minister and Minister of Economic Affairs Sverrikenko revealed on social media that according to the agreement reached by Ukrainian President Vladimir Zelensky and US President Donald Trump, she and US Treasury Secretary Scott Besent signed the "U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S.-U.S. The agreement intends to create a fund with the allocation ratio of 50% of each party.
The United States has taken measures to limit Iran's oil trade and has stepped up pressure on the country, even though Trump has previously suggested that sanctions may ease after bombing Iran's nuclear facilities. The U.S. Treasury Department and the State Department announced on Thursday that they would impose sanctions on www.edoyoko.companies and the Shadow Fleet that helped Iran export crude oil. The U.S. Treasury sanctions target www.edoyoko.comworks of businesses accused of buying and transporting billions of dollars in Iranian oil. The U.S. Treasury Department said that some of the proceeds from oil sales flowed into the Iranian Islamic Revolutionary Guard Corps Quds Force, which the United States has listed as a terrorist organization. Finance Minister Scott Besent said in a statement that the Treasury will continue to target GermanyHelan's source of income, increasing economic pressure to prevent the regime from obtaining sources of funds for its destabilizing activities. Meanwhile, the U.S. State Department imposed penalties on six www.edoyoko.companies, including four vessels that assisted Iran in exporting oil. The two departments specifically noted that these vessels helped Iran circumvent sanctions by loading cargo from Iranian ships and covering up their sources.
According to the www.edoyoko.comrmation of Marine Petroleum Engineering Co., Ltd., the second phase of the largest distributed photovoltaic, power energy storage and charging pile integration project in the field of marine oil and gas equipment manufacturing in China was put into use in the Zhuhai deep-water equipment manufacturing base of the offshore oil engineering project. The project is constructed in three phases, the first phase of which was put into use in July 2023, with an installed capacity of 6,500 kilowatts and an average annual power generation of 6.45 million kilowatt-hours. The distributed photovoltaics put into production this time covers a total area of 80,000 square meters and has an installed capacity of 9,300 kilowatts. The new power generation can be increased by 9.2 million kilowatt-hours on the basis of clean energy power generation in the first phase of the project, further reducing the dependence on non-renewable energy such as thermal power generation.
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