💸 TL;DR

Labour data supports the narrative of a soft landing in the US, but the market maintains its risk-off of sentiment ahead of uncertainty around US CPI data on Wednesday and the start of Q2 earnings season. US and EU futures point lower.

📰 What’s moving markets?

• US jobs report came in weaker than expected on Friday with nonfarm payrolls increasing by 209,000 (consensus: 220,000) supporting the narrative that Fed hikes are beginning to slow the economy in order to achieve a soft landing in the US.

• Stocks started the trading session strong on Friday but sold off later in the day, led by mega-cap tech names indicating some profit-taking after a very strong first half of the year.

• Asia indices are mixed this morning with Nikkei 225 losing 0.70% lower while India’s Nifty 50 and China’s Hang Seng are both in the green. US and European futures are down c. 0.40% this morning.

• Second-quarter earnings season begins this week, with JPMorgan Chase, Citigroup, Delta Air Lines, and PepsiCo among the companies reporting. Expectations for this earnings season are downbeat, with analysts forecasting a roughly 7% year-over-year drop.

• USD Index has started to recover after selling off last week, up 0.20% to 102.5 this morning with the biggest mover USDJPY up 0.50% to 143 as investors move towards the safe-haven dollar ahead of CPI and earnings report uncertainty this week.

• Oil prices rose to 6-week highs due to supply concerns outweighing fears about rate hikes and economic growth. Supply concerns have been made worse by a devastating fire on a major offshore platform in Mexico's Cantarell Field on Saturday leading to the loss of 2 lives and 700,000 barrels of crude oil production. Brent Oil is currently trading at around $78.

📊 Chart of the day

When the bond yields rise, the Nasdaq 100 usually falls (as shown by the positive correlation between Nasdaq 100 price and inverse US 10yr yield on the below chart). However, recently, bond yields have been rising along with the Nasdaq 100.

Nasdaq 100 versus US 10yr Yield (inverted)

📅 Coming up this week

Monday 10th July

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Tuesday 11th July

• UK Average Earnings (including bonuses) expected: 6.80%, last: 6.40%

• UK Unemployment Rate expected: 3.80%, last: 3.80%

• Germany Headline CPI (YoY) expected: 6.40%, last 6.10%

• Japan PPI Inflation (YoY) expected: 4.30%, last 5.10%

Wednesday 12th July

• US Headline CPI (YoY) expected: 3.10%, last: 4.00%

• US Core CPI (YoY) expected: 5.00%, last: 5.30%

• Bank of Canada Interest Rate Decision expected: 5.00%, last: 4.75%

Thursday 13th July

• UK GDP (MoM) expected: -0.40%, last: 0.20%

• France Headline CPI (YoY) expected: 4.50%, last 5.10%

• US PPI Inflation (YoY) expected: 0.40%, last 1.10%

• US Initial Jobless Claims expected: 249k, last 248k

• South Africa Gold Production (YoY) expected: -1.10%, last 27.40%

• South Africa Mining Production (YoY) expected: 3.30%, last 2.30%

Friday 14th July

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📈 The markets at a glance