News

A high-stakes U.S.-China call has yet to resolve a metals shortage that businesses say could halt production of cars and other industrial parts this summer.

This also marks a third straight rate cut since February, and comes below the median estimates of 5.75% in a Reuters poll.

Deutche Bank is out with a note highlighting that the focus on jobs might be the wrong one. The big change in the US economy is in immigration, which has cratered this year — falling more than 90% from the January 2022 to June 2024 average.

They note that this is equivalent to an annual slowdown in labor force growth of more than 2 million people.

Last year we were writing that the US was benefitting from a goldilocks
mix of high employment growth and low wages precisely because of high
immigration numbers. If recent immigration trends continue, it must follow that
over the course of the year the reverse will happen. As the 2022 energy shock
showed, a negative supply shock is not good news for a currency.

Between this and trade, you have some big structural changes happening in the economy under the surface. Add in a out-of-control deficit and it’s not a great recipe.

This article was written by Adam Button at www.forexlive.com.

Nonfarm payrolls were expected to increase 125,000 in May while the unemployment rate stayed at 4.2%.

This is the first hint at a timeline for China-US talks, and it’s a rapid one. That’s a good sign that both sides are aiming for some kind of deal before long.

But let’s hope that Navarro isn’t invited because that’s not the guy to make a deal with China.

This article was written by Adam Button at www.forexlive.com.

Tesla CEO Elon Musk and President Trump launched a war of words at each other Thursday over Musk’s criticism of the Republican’s “One Big, Beautiful” tax bill

• Prior +7.4k
• Unemployment rate 7.0% vs 7.0% expected
• Prior 6.9%
• Full-time employment +57.7k vs +31.5k prior
• Part-time employment -48.8k vs -24.2k prior
• Participation rate 65.3% vs 65.3% prior
• Average hourly wages +3.5% vs +3.5% prior

StatCan notes that overall, there has been virtually no employment growth since January, following strong gains from October 2024 to January 2025.

Anyway this report won’t change anything for the Bank of Canada which is expected to deliver another rate cut by the end of the year.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior was +177K (revised to +147K)
• Two-month net revision: -95K versus -58K prior
• Unemployment rate: 4.2% versus 4.2% expected
• Prior unemployment rate: 4.2%
• Unrounded unemployment rate: 4.244% versus 4.1872% prior –highest unrounded print since October 2021
• Participation rate: 62.4% versus 62.6% prior
• Average hourly earnings (m/m): +0.4% versus +0.3% expected and +0.2% prior
• Average hourly earnings (y/y): +3.9% versus +3.7% expected and +3.8% prior
• Average weekly hours: versus 34.3 expected and 34.3 prior
• Change in private payrolls: +140K versus +120K expected and +167K prior (revised to +146K)
• Change in manufacturing payrolls: versus -5K expected and -1K prior
• Government jobs: -1K versus +10K prior
• Full-time jobs: -623K versus +305K prior
• Part-time jobs: versus +33K +56K prior
• Household survey -696K vs +436K prior

USD/JPY was trading at 144.26 just ahead of the data and the market was pricing in 80 bps in easing in the year ahead, which is at 79 bps afterwards.

There was a slight hawkish reaction to the data which I would classify more as a ‘sigh of relief’ that jobs were better than ADP. With the revisions, it was slightly less than expected and also note falling labor force participation; if not for that the unemployment rate would have risen further. There is also an argument that the revisions tell you more about the economy than the headlines, and the revisions weren’t great for the second month, the household survey was also poor (though it’s volatile).

Note the composition as well:

• Healthcare: +62,000 jobs (hospitals +30,000, ambulatory care +29,000, nursing facilities +6,000).

• Leisure & hospitality: +48,000 jobs (mostly food/drinking places +30,000).

• Social assistance: +16,000 jobs.

• Federal government: -22,000 jobs (down 59,000 since January).

The government job losses are a solid sign that the private sector is doing better but healtcare is government-adjacent and the rest of the jobs aren’t high quality.

This article was written by Adam Button at www.forexlive.com.

EUR/USD

• 1.1500 (EUR 3.19bn)
• 1.1400 (EUR 2.38bn)
• 1.1300 (EUR 1.28bn)

USD/JPY

• 146.00
  (US$ 1.35bn)
• 142.00 (US$ 2.08bn)

GBP/USD

• 1.3600 (GBP 413mn)
• 1.3410 (GBP 896mn)

USD/CHF

• 0.8300 (CHF 415mn)
• 0.8250 (CHF 470mn)

USD/CAD

• 1.4040 (US$ 1.11bn)
• 1.3600 (US$ 1.13bn)

AUD/USD

• 0.6300 (AUD 1.64bn)

NZD/USD

• 0.5590 (NZD 766mn)

For more information on how to use this data, you may refer to this post here.

This article was written by Giuseppe Dellamotta at www.forexlive.com.