Markets and macro: relief for now

plus: trade agreements, consumer spending, sentiment and more

“After all, the wrong road always leads somewhere.” – George Bernard Shaw ||

Hi everyone! All of you battling a heatwave, I hope you’re managing to stay cool. I have wet towels draped on my arms, but it’s not helping to make my keyboard any less hot to touch. Ufff.

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Programming note: time for a short summer break – this newsletter will be skipping publication on Thursday July 3rd – Saturday July 5th. Back on Monday!

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IN THIS NEWSLETTER:

• Coming up: central banks, jobs, Congress and a holiday

• Movement on the trade front

• Macro-Crypto Bits: consumer spending, relieved surveys, relieved markets

If you’re not a premium subscriber, I hope you’ll consider becoming one! You get ~daily commentary on markets, tokenization, regulation and other signs that crypto IS impacting the macro landscape. As well as relevant links and music recommendations ‘cos why not.

WHAT I’M WATCHING:

Coming up: central banks, jobs, Congress and a holiday

It’s a holiday-shortened week with the 4th of July falling on Friday, but that doesn’t mean things aren’t happening.

Today, Congress starts debating Trump’s Big Beautiful Bill, as a narrow vote late on Saturday agreed to move it forward. The pressure is on, as the US President has said he wants it passed by this coming Friday.

On the other side of the Atlantic, today sees the official start of the European Central Bank annual gathering in Sintra, Portugal, an invite-only event attended by global central bank officials, economists and selected media. This year, the theme is “Adapting to Change” – a safe choice, I guess.

The occasion gives the heads of the world’s leading central banks a chance to compare stress levels, I mean strategies, as well as discuss global trade and warn about risks both hidden and in plain sight. One of the highlights will be a panel on Tuesday at 9:30am ET, with Jerome Powell (US Fed), Christine Lagarde (ECB), Kazuo Ueda (Bank of Japan), Chang Yong Rhee (Bank of Korea) and David Bailey (Bank of England) – you should be able to see the livestream here.

Also tomorrow, we get some economic data reports from the US. One set will be the manufacturing Purchasing Managers Index from both S&P and ISM for June, expected to show little change in activity from May, but an uptick in prices.

Another set is the US job openings report (JOLTS), which economists think will show a slight uptick.

On Wednesday, we get more jobs data in the form of the private ADP payrolls report, expected to show a strong rebound to 105,000 (in line with the average over the past year) from last month’s surprisingly low 37,000. We also find out the latest monthly data on job cuts – the weekly initial unemployment claims reports suggest that these have not seen a notable increase.

The big jobs report, and the key economic catalyst for the week, is the official Bureau of Labor Statistics data out on Thursday, a day earlier than usual given the July 4th holiday. The consensus forecast is for an increase of 113,000 non-farm jobs in June, the lowest in four months but still robust. Unemployment, however, is expected to edge up to 4.3% from 4.2%.

On Friday, US markets are closed for the 4th of July holiday, which means… low volumes, barbecues and a welcome short break!

Movement on the trade front

The intense flurry of trade-related comment over the past few days hints that there has been progress of sorts and that we could see some confirmation of “understandings” in coming days. On Thursday, US Commerce Secretary Howard Lutnick said that the US would reach agreements within the next two weeks with 10 key trading partners – but he’s been saying things like that for ages, so, grain of salt.

Nevertheless, even I am starting to think there could be some signs of momentum soon. Cautiously, of course.