Central Banks

Payrolls fell 23,000 as the civilian labor force contracted 264,000 and participation slipped to 61.4%. Household employment also fell, so the lower jobless rate came with a smaller pool of people counted in the labor market.

South Africa’s central bank paused after May’s rate rise even as inflation reached 5%. Its own scenarios leave another hike waiting on fuel costs and expectations.

Bank Indonesia kept its policy rate at 5.75% after two increases and widened hedging incentives for foreign investors. Currency support is moving through the market’s pipes as well as its headline rate.

Traders have bid crude on persistent Hormuz risk while investors sold the chip complex despite record results. The Federal Reserve remains on hold and the Bank of Korea has just hiked. Price action splits between an inflationary supply shock and a reappraisal of AI-capex durability.

The board tied stronger growth to semiconductor exports and investment while confronting a weak won and persistent inflation. The same decision arrived as chip shares endured a violent sell-off, leaving policy and markets reading the same AI cycle differently.

A soft June price print pulled buyers toward duration even as Hormuz lifted crude. IBM supplied the warning beneath the rally: AI hardware bills are starting to eat software budgets.

Crude’s weekend gap pushed yields and the dollar higher, pulled gold lower and split the equity tape. Tech weakened while the Dow held, leaving a rotation toward energy and value as the session’s first clean read.

The memory maker's US shares closed 13% above their $149 offer, a raise above $26 billion for direct AI-memory exposure. The rest of the tape is frozen at Friday's close while the Hormuz strikes run live into Sunday's reopen.

Inflation risks tilted upward in the June FOMC record released on 8 July, and futures pushed September hike odds to 65.7%. A firmer dollar and a Gulf oil spike added hawkish fuel as cross-asset markets treated the day's shocks as cost-push pressure.

Monday’s session lifted the PHLX Semiconductor Index 2.17% and the Nasdaq 1.12% while S&P decliners still outnumbered gainers, a chip-led bounce that nearly scored a false FX miss on a misdated yen high. Wednesday’s June FOMC minutes land with September hike odds near 58% against services inflation still running hot.

Equity futures pointed higher into the first US cash session since Thursday’s chip rout, with dispersion across semiconductor names setting the tone. Rotation inside the AI trade, a coin-flip September hike path, and oil’s split crude-versus-products story frame a mid-session tape that carries no full-day closes yet.

Nonfarm payrolls added 57,000 in June with revisions lower and unemployment at 4.2%, pivoting out of the war-and-inflation tail toward a softer Fed path. Chip valuations slid in an AI-capacity scare; the yen recovered from four-decade lows as rate gaps repriced. US cash markets reopen Monday; Thursday’s closes are the last read.

Finance Minister Katayama said Tokyo stands ready to respond to excessive yen moves and is in contact with US authorities, the clearest signal this cycle that intervention could be coordinated. USD/JPY pulled back from a four-decade low near 162.84 toward 161 after soft June payrolls. The house assigns a 0.40 probability that the pair retests 162.50 before the 10 July Tokyo close.

USD/JPY pulled back toward 161 after June's soft payrolls cut near-term Fed-hike odds, yet Tokyo disclosed zero intervention through late June and the US–Japan rate gap remains wide. Probability sits at 0.45 that the pair prints above 162.66, a fresh four-decade yen low, before 31 July 2026.

Officials are abandoning telegraphed level defence for surprise operations against crowded yen shorts, even as the Ministry of Finance ledger shows zero disclosed intervention through late June and the US-Japan rate gap keeps pulling USD/JPY toward four-decade highs.

The Japanese yen fell to its weakest level against the dollar in roughly four decades on 1 July, with Reuters citing USD/JPY at 162.84 before a modest rebound. Rate differentials, a firmer dollar and rising U.S. yields in thin holiday liquidity drove the move, while Tokyo kept its intervention posture alive without confirming fresh action.

Kevin Warsh’s first meeting as Fed chair did not move rates, but it moved the regime. The committee held steady while stripping back the map markets had been using to trade the next turn.

US inflation in May looked scary — 4.2%. But almost all the scary part was energy, which is really a Hormuz story. Next week the Bank of Japan, the Fed, and the Bank of England decide in three days whether to believe the number — and the Fed's call may rest on an oil chokepoint no central banker controls.