MARKET WRAPS
Watch For:
Services PMI for eurozone, Germany, France, Italy, U.K.; France industrial production; no major corporate updates expected
Opening Call:
European stock futures traded higher early Friday. Asian stock benchmarks advanced; the dollar edged lower; Treasury yields were mixed; while oil and gold futures rose.
Equities:
Stock futures point to a higher open in Europe on Friday as traders dialed back bets on rate hikes by the Federal Reserve after softer-than-expected U.S. jobs data.
"There was this thought process that the Fed would be squarely focused on inflationary pressures," said José Torres, senior economist at Interactive Brokers. "Now, they are going to have to at least consider the labor side of their mandate as well."
Equity investors are essentially betting on a just-right scenario in which inflation cools while the job market holds steady, said Mark Vitner, chief economist at Piedmont Crescent Capital. That would offer a boost to equities, without stoking fears of a slowdown.
"I think we're closer to that than we are to a case where the Fed has to aggressively raise interest rates," Vitner said. "I just don't see a scenario where that happens."
Forex:
National Australia Bank has made "meaningful" upward revisions to its U.S. dollar projections across all major currencies, having earlier been hesitant to make changes due to the "fog of war." The key driver of the revisions is that the U.S. economy is proving much more resilient than anticipated, keeping inflation elevated and prompting a hawkish pivot by the Fed, NAB said.
Still, NAB isn't yet forecasting that the Fed will lift rates, but it notes that the U.S. dollar's upswing since May has closely tracked the evolution of Fed policy expectations.
Bonds:
The yield curve is narrowing toward a point where it typically signals an economic downturn might be ahead. "Be prepared for a US yield curve inversion," said Daniel Von Ahlen, head of macro strategy at TS Lombard.
Typically, an inversion says a recession is looming. And although that warning isn't perfectly accurate, an inversion can have an impact on risky assets and push banks to tighten credit standards as they start earning less from their long-term loans.
"We don't expect a recession. But at the margin, they will be a headwind to risky assets and are one reason why we expect the S&P 500 to tumble to 6,500 by the end of next year," said Capital Economics Senior Market Economist James Reilly.
Energy:
The reopening of the Strait of Hormuz has reduced the risk of outright liquefied natural gas supply loss in the world market, but LNG shipping flows are recovering much more slowly than crude oil, likely leaving export capacity constrained well into 3Q, said Daniel Hynes, senior commodity strategist at ANZ.
Metals:
Gold's medium-term role as a target for asset diversification remains valid, but its price is likely to be weighed by a tougher macroeconomic backdrop, said OCBC. Demand is likely to be anchored by the official sector, with central banks indicating they intend to raise their gold reserves over the next 12 months.
However, this is unlikely to fully offset near-term macro pressure from rising real yields and a firmer dollar as investors price in Fed rate hikes. OCBC expects gold prices to reach $4,360 a troy ounce by end-2026 and $4,680 an ounce by end of 2Q 2027.
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Iron ore fell in Asian trading amid record-high inventories sitting at Chinese ports, ANZ said. Still, the metal is finding support after China signaled plans to restrict the use of certain inventories held at mainland ports. However, any price gains are likely to be limited, ANZ said.
TODAY'S TOP HEADLINES
Trump blasts 'hostile' Fed and says Warsh 'has to do what he has to do' on interest rates
President Donald Trump declined to offer advice to Fed chief Kevin Warsh following the latest U.S. jobs report, saying in an interview that the new chair "has to do what he has to do."
Speaking in a CNBC interview Thursday, Trump said Warsh at the Fed faces a board that is "a little bit hostile."
This Year's Job Market Is Shaping Up to Be Surprisingly Stable
Halfway through the year, the labor market is flashing a virtue that proved elusive for much of 2025: stability. American hiring in 2026 hasn't quite boomed, but it has broadly improved.
The latest numbers, released Thursday by the Labor Department, were a disappointment. June's 57,000 new jobs fell well short of Wall Street forecasts. Sectors that reflect the current health of the economy, including retail and leisure and hospitality, lost jobs.
Investors Seek to Pull Nearly $16 Billion From Private-Credit Funds
The giant sucking sound in private-credit funds got louder in the second quarter as investors tried to pull more money out and got less back.
Investors asked to withdraw $15.6 billion from widely held private-credit funds in the second quarter, up from the roughly $13.9 billion they tried to pull from those funds in the prior quarter.
Trump Loyalty Demands Set Stage for Tense NATO Summit
The North Atlantic Treaty Organization summit in Ankara, Turkey, will be a critical test for the alliance, as anxieties about U.S. military drawdowns and President Trump's frustration with allies over the war in Iran threaten to overshadow the official agenda.
In an interview with WSJ World Coverage Chief Gordon Fairclough, NATO Secretary-General Mark Rutte addressed the friction between Washington and European leaders, and how the alliance plans to confront lagging weapons production.
Hegseth Prepared a Bombshell Plan to Cut Troops in Europe. Then It Got Nixed.
WASHINGTON-Defense Secretary Pete Hegseth was planning to head to Brussels last month to deliver what would be a bombshell announcement in a meeting with the North Atlantic Treaty Organization's top military chiefs.
The U.S., he planned to say, was preparing additional cuts to its forces in Europe that would go beyond the canceled deployment of an armored brigade to Poland and the earlier withdrawal of an infantry brigade from Romania, people familiar with the matter said. But Hegseth's proposal was nixed after it was shared with Marco Rubio-President Trump's national-security adviser-and other senior officials, the people said.
KKR and Energy Capital Partners Look to Bet on DCC's Industry Pivot
Energy Capital Partners and KKR & Co. could benefit from DCC's newfound focus on the energy sector if they overcome investor resistance to take the European fuels supplier private, according to industry analysts.
The New York buyout firm and Energy Capital Partners bumped up their proposed offer to what equates to about GBP66.72 a share for DCC on June 10, giving the Dublin-based company a market value of around GBP5.7 billion, or roughly $7.6 billion. Directors of London-listed DCC, who spurned the bidders' April approach, said last month that they are "minded to recommend" the higher offer to shareholders.
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Expected Major Events for Friday
00:01/IRL: Jun Ireland Services PMI
06:45/FRA: May Industrial production index
07:00/TUR: Jun CPI
07:00/TUR: Jun PPI
07:00/SPN: May Industrial Production
07:15/SPN: Jun Spain Services PMI
07:45/ITA: Jun Italy Services PMI
07:50/FRA: Jun France Services PMI
07:55/GER: Jun Germany Services PMI
08:00/EU: Jun Eurozone Services PMI
08:00/ITA: May Retail Sales
08:30/UK: Jun UK Official Reserves
08:30/UK: Jun S&P Global UK Services PMI
09:00/CYP: Jun Registered Unemployed
09:00/EU: 1Q Quarterly sectoral accounts
09:00/EU: 1Q Quarterly Balance of Payments
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(END) Dow Jones Newswires
July 03, 2026 00:01 ET (04:01 GMT)
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