Week Ahead: Will The US Jobs Report Reshape Fed Expectations?

The US labour market will return to the spotlight next week as investors look for fresh clues on whether the Federal Reserve can afford to keep interest rates higher for longer. Due to the US Independence Day holiday on Friday, the closely watched June Non-Farm Payrolls report will be released a day earlier, on Thursday, making it the week's headline event for global markets.

Thursday's employment report is expected to show that the US economy added around 90,000 jobs in June, down from 172,000 in the previous month, while the unemployment rate is forecast to edge higher to 4.5%. Signs of a cooling labour market could revive expectations for Fed rate cuts later this year, while another resilient report may reinforce support for the US dollar.

Ahead of the payrolls release, traders will also closely watch the JOLTS Job Openings report for an early indication of labour market conditions. Together, these reports are likely to shape expectations around the Fed's next policy moves.

Our focus this week will be on Alpari's USDInd which may be preparing for a larger breakout move.

US labour market and Eurozone inflation in focus

Markets will focus on key labour market data from the United States alongside inflation figures from the Eurozone next week. Investors will also monitor consumer confidence in Japan for additional clues on global economic momentum.

Tuesday, June 30th: US JOLTS Job Openings

The latest job openings data could provide an early snapshot of US labour market conditions ahead of Thursday's employment report. Signs of easing labour demand may influence expectations around future Federal Reserve policy.

Wednesday, July 1st: Japan Consumer Confidence

Japan's consumer confidence index may offer fresh insight into household spending prospects and the strength of domestic demand, potentially influencing the yen.

Wednesday, July 1st: Eurozone Flash CPI

The latest inflation figures from the Eurozone could shape expectations around the European Central Bank's next policy steps and drive volatility in the euro.

Thursday, July 2nd: US Non-Farm Payrolls and Unemployment Rate

Released a day earlier because of the US Independence Day holiday, the June employment report will be the week's key event. Investors will assess whether hiring continues to slow and whether the unemployment rate rises as expected, with the results likely to have a significant impact on Federal Reserve expectations and the US dollar.