US payrolls miss spurs 55bps of Fed cut bets, Eurozone CPI slows to 1.8%, dollar dips, gold climbs, and bond yields fall.
The 10‑year Treasury yield fell 5bps to 4.15% as the weak payrolls report ignited a flight to safety. Markets ramped up bets on 55bps of Fed easing in 2026, compressing yields across the curve.
If the Fed clearly signals a pivot, the 10‑year yield could test 4.00% by quarter‑end. Near‑term support is at 4.12%, with a break below targeting 4.05%.
It depends on the next CPI print. A sustained cooling in inflation would cement the fed‑cut narrative and push yields lower. A hot print, however, would likely spark a sharp reversal.
Gold rose 0.3% to $1,950/oz as the dollar index slipped on weaker‑than‑expected US payrolls. Lower real yields from the spike in Fed cut bets also boosted bullion’s appeal.
Gold faces resistance at $1,965, but the combination of a softer dollar and declining real yields supports a push toward $1,980. A break above $1,965 could accelerate gains.
Yes, if upcoming CPI surprises to the upside, hawkish Fed rhetoric could lift the dollar and real yields, quickly unwinding gold’s upward move. Support sits at $1,930.
The dollar index fell 0.3% to 104.50 after the US nonfarm payrolls gain of 125K undershot the 150K consensus. Markets rapidly repriced to 55bps of Fed cuts in 2026, eroding the yield advantage that had supported the dollar.
It hinges on incoming data. If inflation proves sticky, the Fed may push back on rate‑cut expectations, supporting the dollar. A break below 104.00 could target 103.50.
A sharp miss in US payrolls boosted expectations for a dovish Fed pivot, reducing the dollar’s interest rate advantage. Traders sold the dollar aggressively in the immediate aftermath of the data.
EUR/USD slipped 0.1% to 1.0720 as Eurozone CPI cooled to 1.8% from 2.0%, trimming ECB tightening expectations. Although the dollar also weakened, the euro underperformed slightly due to the direct inflation miss.
The Eurozone inflation miss directly reduced the need for ECB rate hikes, which weakened the euro relative to other currencies. This effect slightly outweighed the dollar‑bearish impact of the US payrolls miss, pushing EUR/USD lower.
Support sits at 1.0700; a close below would open the way to 1.0640. Resistance is at 1.0780, the pre‑data high.
S&P 500 futures rose 0.4% after the US payrolls miss spurred bets on a more dovish Fed. Traders rotated into growth stocks expecting lower discount rates, pushing the index higher despite softer labor demand.
Softer labor data reduces the odds of aggressive Fed tightening, which lowers the discount rate on future earnings, benefiting growth and tech stocks. Markets focused on the easing signal rather than the growth concern.
Short‑term momentum depends on upcoming CPI data and Fed speakers. If inflation remains sticky, the rally could stall; if it confirms cooling, further upside is likely.
US nonfarm payrolls added 125,000 jobs in June, missing the 150,000 consensus and stoking expectations for 55 basis points of Fed easing in 2026. Eurozone CPI cooled to 1.8% year‑on‑year from 2.0%, trimming pressure on the ECB to tighten further. The dollar and euro both weakened, lifting gold and European equities while Treasury yields declined.
The miss on payrolls reinforces expectations that the Fed will cut rates by 55bps in 2026, as a cooling labor market reduces the urgency to keep policy restrictive. Traders now see a faster pivot to easing.
Weaker US hiring lowered the dollar by boosting Fed cut bets, while Eurozone CPI cooling dampened the euro by reducing ECB tightening expectations. The relative weakness kept EUR/USD range-bound with a slight euro downside.
US equities gained as rate-sensitive sectors like tech rallied on hopes for lower borrowing costs. Treasury prices jumped across the curve, pushing the 10‑year yield down 5bps to 4.15%.