FED: Gov Cook Saw July Jobs Report As "Concerning", Possible "Turning Point"
Cumulative 2025 Fed rate cut pricing marginally extended to session highs (a little over 61bp, up 3bp on the day) as Fed Gov Cook notes that last week's Employment Report was "concerning" and could mark a "turning point":
- "We just received this jobs market report and this is concerning, you know, 35,000 jobs per month over the last three months ending in July. And there were major revisions to May and June. And these revisions are somewhat typical of turning points, which again, speak to uncertainty.... We want to know not just where we've been but where we're going. So if we're at an inflection point, we want to look at data, for example, that speak to inflection points. And it's not always payrolls - the unemployment rate is still a good indicator of slack in the system."
- Nothing here to suggest she wouldn't support a 25bp rate cut at the next meeting.
- We had guessed going into July's FOMC meeting that she was one of the 8 Committee members who were in line with the "median" rate cut projection of 50bp in the June Dot Plot.
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USDJPY TECHS: Trades Through The 50-Day EMA
- RES 4: 148.65 High May 12 and a reversal trigger
- RES 3: 148.03 High Jun 23
- RES 2: 146.19/146.77 High Jun 24 / 76.4% of Jun 23 - Jul1 bear leg
- RES 1: 145.82 High Jul 07
- PRICE: 145.77 @ 15:52 BST Jul 7
- SUP 1: 144.18/142.68 Low Jul 4 / 1
- SUP 2: 142.12 Low May 27 and a key short-term support
- SUP 3: 141.96 76.4% retracement of the Apr 22 - May 12 upleg
- SUP 4: 141.49 Low Apr 23
USDJPY has started the week on a firmer note. Price has breached the 50-day EMA, at 144.91, and a close above it would highlight a stronger reversal. This would expose 146.19, the Jun 24 high. For now, gains still appear corrective. Moving average studies are in a bear-mode position, signalling a dominant downtrend. A resumption of weakness would open 142.12, the May 27 low and a key short-term support.
US STOCKS: Extending Lows Yet Again on More Tariff Tweets
- Stocks extend late session lows after latest tariff announcements via Pres Trump's social media platform: 25% on goods from Malaysia and Kazakhstan, 30% on South Africa, and 40% on Laos.
- Currently, the DJIA trades down 664.11 points (-1.48%) at 44163.91, S&P E-Minis down 76.5 points (-1.21%) at 6247.5, Nasdaq down 265.4 points (-1.3%) at 20335.29.
- Energy, Consumer Discretionary, Materials, Financials and Health Care sectors underperforming.
- Main laggers in the second half include: Tesla -7.01%, First Solar -4.39%, Dow Inc -4.22%, Lululemon Athletica -4.21%, EOG Resources -3.74%, Halliburton -3.62%, Old Dominion Freight Line -3.58% and Albemarle Corp -3.53%.
TARIFFS: Trump: Tariff Rates Of 25% On Malaysia, 30% On South Africa
Trump announces on Truth Social the following tariff rates to be imposed on Aug 1 (in similar letters to those seen sent earlier to Japan and South Korea). White House Press Secretary Leavitt announced earlier that there would be 12 letters sent today - this is 5 of those sent in a quick burst, implying 7 more to be announced later.
- 25% tariffs on Malaysia and Kazakhstan - had been announced at 24% / 27% respectively before tariff "pause"
- 30% on South Africa (USDZAR quickly rises 0.3%) - had been announced at 31% before tariff "pause"
- 40% on Laos and Myanmar - had been announced at 48% / 45% respectively before tariff "pause"
