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Read snapshots of the latest market news
US markets weaken amid concerns over AI valuations and geopolitical risks
US equity markets retreated as mounting fears of artificial intelligence (AI) overvaluation and escalating Middle East tensions unsettled investors. These developments subsequently triggered a rally in crude oil prices and pushed government bond yields higher, amidst shifting market expectations regarding the Federal Reserve’s interest rate trajectory.
US nonfarm payrolls slow, while unemployment falls
US payroll growth slowed sharply in June, signalling weaker hiring despite a lower unemployment rate. Markets pared near-term Fed hike expectations, weighing on the dollar while yields stayed firm. US equities diverged as tech sold off, while Eurozone unemployment remained steady and the euro strengthened.
US ADP employment and ISM manufacturing PMI decline; Japan confidence improves
US equities declined after weaker ADP hiring and a softer ISM manufacturing PMI signalled easing economic momentum, despite manufacturing remaining in expansionary territory. Japan’s consumer confidence improved slightly but missed forecasts, reflecting better expectations for livelihoods and employment.
Chinese manufacturing PMI improves; US JOLTS job openings strengthen
Chinese manufacturing PMI rose above expectations in June, signalling expansion supported by AI-related external demand, stronger orders, and improved supply conditions, despite softer employment and weak domestic demand. US JOLTS job openings unexpectedly increased, reinforcing labour-market resilience.
Oil rises on persistent geopolitical risks; Yen hits four-decade low
Oil prices rebounded as persistent US–Iran tensions kept supply risks elevated, despite talks over a possible interim agreement in Doha focused on the Strait of Hormuz. Meanwhile, the yen hit a forty-year low near ¥161.90, as Fed–BoJ policy divergence, higher energy costs, and dollar demand continued to pressure Japan’s currency.
Oil falls on oversupply after Hormuz reopening; Michigan sentiment improves
Oil prices fell as the Strait of Hormuz reopened, with Brent and WTI posting sharp weekly losses. Meanwhile, Michigan consumer sentiment improved as conflict-related fears eased, although inflation expectations remained elevated. The Nikkei declined amid concerns over AI valuations and yen weakness.
Japan inflation rises modestly as yen breaks ¥161 threshold; UK retail sales surge
Japan’s headline inflation ticked up to 1.5% in May, while the yen weakened past the critical ¥161 mark against the US dollar, intensifying market fears of an official intervention. Concurrently, UK retail sales surged by a robust 3.2% on an annual basis, significantly bolstered by an expansion in non-store sales.
BoE holds rates steady as unemployment improves; Canadian PPI hits multi-year high
The Bank of England held interest rates at 3.75% amid steady 2.8% inflation and falling unemployment. Concurrently, Canada's annual PPI reached a multi-year high of 13.6% due to Middle East supply issues. Meanwhile, US stock markets rebounded as dropping oil prices fuelled optimism for the reopening of the Strait of Hormuz.
Fed turns hawkish, lifting US dollar and bond yields as stocks slide
The Federal Reserve kept interest rates unchanged at 3.75% but adopted a more hawkish tone, lifting the dollar and Treasury yields while equities declined. Updated projections pointed to weaker growth, higher inflation, and lower unemployment. Strong retail sales signalled resilience, while a sharp draw in oil inventories reinforced concerns over energy supply and inflation risks.
BoJ hikes rates and warns of further tightening; US housing starts decline steeply
The Bank of Japan raised interest rates to 1.0%, the highest level since 1995, and signalled the possibility of further tightening if inflation persists, particularly amid risks stemming from the Middle East. Despite the move, the Nikkei reached a record high and the yen changed little. In the United States, housing starts fell sharply, highlighting the pressure exerted by elevated mortgage costs.