The Morning Update

The USD is unchanged, oil prices slip, equity markets are up, and US yields ease ahead of the key US jobs report. The U.S. dollar is little changed in early trading as investors await today's closely watched U.S. nonfarm payrolls report, which is expected to provide the clearest signal yet on the strength of the labour market and the Federal Reserve's interest rate outlook. Global equity markets are mostly higher as investors await today's closely watched U.S. nonfarm payrolls report, with strong corporate earnings continuing to support risk sentiment. European equities are advancing, U.S. futures are modestly firmer, and markets remain focused on the labour market data for fresh clues on the Federal Reserve's next policy move. Elsewhere, oil prices slip as uncertainty over U.S.-Iran negotiations keeps traders cautious, while gold and bitcoin edge higher ahead of today's closely watched U.S. nonfarm payrolls report. In focus today: Markets will be watching the U.S. nonfarm payrolls report, unemployment rate and average hourly earnings, alongside Canada's employment change and unemployment rate, with the data expected to provide fresh direction for currency markets.

‍

News Headlines. Meta told to pay nearly $1 billion penalty over social media harm to children. Google's AI shake-up boosts Brin as DeepMind's Hassabis steps aside. Treasury yields hold steady ahead of key nonfarm payrolls and jobless data. Iran's chief negotiator accuses Trump of 'theatre diplomacy' with Hormuz traffic standstill. The US selling euro to prop up the yen blindsided the ECB. Refining crunch keeps fuel prices high as crude retreats. Top Canadian and US trade officials met in Washington as 50% tariff loom.

‍

In currency markets. The coordinated U.S.-Japan intervention last Friday continues to support the Japanese yen after the U.S. Treasury reportedly sold euros to help finance the operation, a move that reportedly blindsided the European Central Bank because it was carried out without prior consultation. Comments from U.S. Treasury Secretary Scott Bessent and Japanese Finance Minister Satsuki Katayama signalling a willingness to intervene again if necessary have reinforced market expectations that authorities remain prepared to act against excessive yen weakness.

‍

In commodity markets. WTI -0.53% | Nat Gas -0.04% | Gold +1.81% | Silver +5.06% | Copper -0.37% | Palladium +1.06% | Coffee +0.88% | Cocoa -1.24% | Soybeans +0.38% | Wheat +0.32%

‍

CAD holds steady near seven-week highs as investors await today's Canadian employment report, with economists expecting the economy to add around 15,000 jobs in July while the unemployment rate is forecast to remain at 6.5%. The labour market data, alongside the U.S. nonfarm payrolls report, will be closely watched for fresh clues on the Bank of Canada's policy outlook, although softer oil prices today may temper near-term support for the commodity-linked loonie.

‍

EURCAD edges higher through the 1.6150 level as easing oil prices weigh modestly on the commodity-linked Canadian dollar ahead of today's key Canadian employment report. With both the Canadian and U.S. labour market releases due later today, investors are expected to remain sidelined until the data provides fresh direction for the cross.

‍

EUR holds above the 1.1500 level as the single currency consolidates recent gains despite weaker Eurozone retail sales and lingering geopolitical uncertainty. Markets are firmly focused on today's U.S. nonfarm payrolls report, with the labour market data expected to provide the next major catalyst for both the euro and the U.S. dollar.

‍

GBPEUR steadies above the 1.1650 level after sterling found support from mixed German economic data, with stronger-than-expected industrial production offset by a narrower trade surplus. However, expectations that the European Central Bank could tighten policy further, while markets continue to scale back Bank of England rate hike expectations, are likely to keep gains in the pound limited.

‍

GBP eases toward the 1.3450 level as investors remain cautious ahead of today's closely watched U.S. nonfarm payrolls report, which is expected to provide fresh guidance on the Federal Reserve's policy outlook. With the UK data calendar remaining light, sterling is likely to take its direction from the U.S. labour market release and broader shifts in global risk sentiment.