📰 U.S. Jobs Report and Market Reactions Ahead of Independence Day: Prelude to Volatility or Calm Before the Storm? (July 3, 2025)

📰 U.S. Jobs Report and Market Reactions Ahead of Independence Day: Prelude to Volatility or Calm Before the Storm? (July 3, 2025)

🧮 Today’s Focus: Non-Farm Payrolls (NFP) and Its Impact
The U.S. June employment report will be released a day earlier than usual due to the Independence Day holiday (July 4). The unusual timing and anticipated lower liquidity may amplify market reactions.

NFP (Non-Farm Payrolls):

• Forecast: +106,000 (Previous: +139,000)
  → Suggests cooling demand for labor, though seen as a “moderate slowdown” rather than a sharp decline.

ADP Employment Report (released yesterday):

• Result: -33,000 (Forecast: +140,000)
  → Unexpected drop accelerated dollar selling. Caution is now spreading ahead of NFP.

Other components:

• Unemployment rate: 4.3% (Previous: 4.2%)

• Average hourly earnings: +0.3% MoM / +3.8% YoY (both expected to slow)

• Labor force participation: 62.4% (unchanged)

In summary, the labor market is “slowing but not collapsing.” If NFP significantly misses expectations, rate cut expectations may rise sharply, triggering renewed dollar weakness.

🧭 Impact of U.S. Holiday and Weekend Ahead
U.S. bond markets will operate on a shortened schedule today, and the three-day holiday weekend begins tomorrow. As a result, post-NFP market moves could initially be sharp but may quickly fade.

However, if the jobs data deviates significantly from expectations, the impact on risk assets and FX markets could carry over into next week (after July 7).

📊 Accompanying U.S. Data and Global Events

🇺🇸 U.S. Economic Indicators

• Trade Balance (May): Deficit expected to widen (Forecast: -$71.0B)

• Initial Jobless Claims: Watch for deviation from NFP trend

• ISM Non-Manufacturing Index (June): Forecast 53.0 (Previous: 53.8)

• Factory Orders / Durable Goods Orders (May): Monitor capital spending trends

🇨🇦 Canada

• International Merchandise Trade (May) released alongside U.S. data
  → May impact CAD/JPY in correlation with oil prices

🌍 Europe, Middle East & Emerging Markets

• Eurozone / UK: Final Non-Manufacturing PMI for June

• Turkey: CPI/PPI expected – inflation concerns remain

• Bank of England: Inflation attitudes and credit conditions survey

• ECB: Minutes from the June 5 Governing Council meeting released
  → Markets watching for Eurozone policy stance clues

🗣 Notable Speeches

• Raphael Bostic (Atlanta Fed President): Speech and Q&A on monetary policy
  → Attention on whether he supports rate cuts

🔍 Strategy Outlook (Short Term Through Early Next Week)
The NFP result and how markets interpret it will drive USD performance.

• Stronger-than-expected → Dollar rebound

• Weaker-than-expected → Renewed dollar selling

Watch for potential weekend price gaps in USD/JPY and AUD/JPY.
Position adjustment and gap risk management are key.
A fundamentally driven cycle continues with upcoming NFP → ISM → FOMC minutes next week.

✅ Key Themes Today (Friday, July 4, 2025)
📌 U.S. Non-Farm Payrolls (NFP) release
📌 Dollar correction vs. labor market strength
📌 U.S. enters a 3-day holiday, possible short-term volatility surge

💵 [USD/JPY] Dollar-Yen
Current: 143.12
🔍 Technical Outlook:

• Short-term: Selling pressure on rallies (144 resistance)

• Medium-term: Downtrend continues on daily chart, support near 142.50

• Resistance: 144.00, 144.80

• Support: 142.50, 141.80

✅ Strategy Note:
If today’s NFP is strong, a rebound toward 144 is possible.
However, beware of weekend gap-down risk.
Weak jobs data could trigger a retest below 142.

💶 [EUR/USD] Euro-Dollar
Current: 1.1748
🔍 Technical Outlook:

• Short-term: Buy-on-dip trend continues, supported by 20MA

• Medium-term: Strong Euro uptrend; next key level is 1.1800

• Resistance: 1.1800, 1.1850

• Support: 1.1700, 1.1675

✅ Strategy Note:
Weak NFP could push EUR/USD above 1.18, targeting 1.1850.
Euro strength likely to persist if European economic recovery holds and dollar remains weak.

💷 [GBP/JPY] Pound-Yen
Current: 183.79
🔍 Technical Outlook:

• Short-term: In correction phase, strong support in low 183s

• Medium-term: MACD shows slight weakness; reclaiming 184 may revive bullish tone

• Resistance: 184.30, 185.00

• Support: 183.00, 182.40

✅ Strategy Note:
Caught between BoE rate cut expectations and U.S. dollar direction.
Weak NFP could lift GBP/JPY.
Caution needed for spike-like price action due to thin liquidity after data.

🧭 Summary Outlook
Today’s NFP is expected to be “neutral to slightly weak.”
Following the negative ADP surprise, markets are leaning slightly pessimistic.
USD/JPY remains in a sell-on-rally mode. Though holding the 143 level for now, a drop below 142 is possible depending on the jobs report.

EUR and GBP are mostly reacting to dollar moves. The Euro looks strong, while the Pound appears heavier.

📝 Strategy Notes:

• Watch for the first wave of reaction after NFP — risk of whipsaws due to positional imbalance

• Beware of speculative moves amid thin liquidity (pre-holiday, short trading hours)

• Manage stop-loss levels tightly to guard against potential weekend gaps