US jobs data dominates the economic calendar this week and sits firmly at the top of traders’ agendas. Investors will pore over JOLTS, ADP private payrolls, jobless claims, and the all-important Non-Farm Payrolls (NFP) report. Consensus NFP estimates point to 114k jobs created in June, a slowdown from the 172k added in May. The ADP figures were a bit softer than expected at 98k vs the 118k that was expected, although this (ADP) private payrolls release isn’t always the best predictor for the more wide-ranging NFP data.
The NFP data’s release has been shifted to Thursday due to the US public holiday on Friday. Anything north of 100k will likely reinforce the view that inflation, rather than a cooling labour market, remains the Federal Reserve’s bigger headache. However, a bumper upside surprise closer to 200k could spark fresh concerns that the jobs market itself is becoming another pocket of inflationary pressure. In essence, a strong print would keep the Fed on track for a potential rate hike as soon as September, maintaining elevated pressure on risk assets and non-yielding instruments alike.
Events over the past week have once again illustrated that the so-called US-Iran “ceasefire” remains something of a misnomer. Both sides exchanged military strikes over the weekend, with a Singapore-flagged tanker also reportedly targeted by Iran, before hostilities were again paused. While oil markets are currently priced for a gradual return to supply normalisation, traffic through the Strait of Hormuz has yet to recover to pre-war levels. Brent crude dropped a sharp 21% in June, offering welcome relief to consumers and risk assets. Markets are breathing easier at current oil prices, but questions linger over whether they can hold here. The US and Iran are still not singing from the same hymn sheet regarding what “normalisation” actually entails, particularly around tolls, security guarantees, and long-term access arrangements. Any renewed flare-up could quickly reroute energy prices higher and reintroduce volatility across financial markets.
The US Dollar has enjoyed a prosperous first half of 2026, with the Dollar Index (DXY) climbing around 2.7% year-to-date. This strength reflects a significant pivot in Fed expectations, from anticipated rate cuts to the distinct possibility of further hikes as inflation pressures proved stickier than hoped. Supported by rising Treasury yields, the greenback has notably outperformed the Japanese yen, with USDJPY up 3.7% YTD. In contrast, the Australian Dollar has more than held its own against the USD, gaining roughly 3.6% year-to-date, thanks to a series of Reserve Bank of Australia rate hikes that have bolstered the Aussie. As long as expectations for additional US rate hikes in the second half remain intact, the Dollar should retain its supportive tailwinds.
Gold continues to be badgered by rising US rate-hike expectations and the accompanying strength in the US Dollar. However, the price did move higher overnight as oil softened. Spot gold is hovering above the $4,000 level but is still finding it difficult to generate any sustained upside momentum while the DXY sits relatively comfortably above 101. The second quarter of 2026 marked gold’s first quarterly decline since 2024. This highlights both the impressive bull-run the metal had been enjoying and the fact that macroeconomic tailwinds have swiftly turned into headwinds, primarily in the form of a more hawkish anticipated US interest rate trajectory. Support awaits around $3980, with resistance at $4100 followed by $4135.
Technology stocks regained some of their mojo on the final trading days of the second quarter. However, even though we are only a few days into the new month, semiconductor stocks have again come under selling pressure. High valuations combined with rising capital expenditure in the AI space mean that traders are becoming considerably more discerning than they were earlier in the cycle. This selectivity suggests that the rate of ascent for tech may not be quite as steep going forward. Nevertheless, despite several episodes of wobbles throughout the year triggered by geopolitical shocks and monetary policy uncertainty, the tech-heavy Nasdaq index still managed to outperform both the DJIA and the S&P 500 over the first half of 2026.
Looking ahead, the all-important NFP figures on Thursday will set the tone for how markets assess the balance between growth and inflation, while developments in the Middle East will influence currency, commodity, and equity positioning to round out the week.