By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
Whatever the market take was from Friday’s surprisingly soft U.S. payrolls update has been overshadowed by the instant firing of the statistician responsible for them – leaving more questions than answers about the veracity of these numbers and all those in the future.
The massive downward revisions to prior months’ job totals were a bigger initial jolt than the slight miss to July payrolls or the uptick in the unemployment rate. But President Donald Trump’s dismissal of Bureau of Labor Statistics boss Erika McEntarfer over what he called “rigged” data means investors now either dismiss the July report or assume future reports will be massaged to be more favorable to Trump.
* Trump’s firing of McEntarfer has prompted investors to revisit April’s questions about damage to U.S. transparency and institutional integrity – qualities that, for many, have been at the heart of America’s long-standing exceptional economic and financial performance. The early resignation of Federal Reserve Board Governor Adriana Kugler, also on Friday, now gives Trump the chance to put a third nominee on the seven-person Fed board – increasing his influence on the central bank while he is demanding steep interest rate cuts.
* The jobs data release on Friday has prompted market futures to price an 85% chance of a Fed cut next month – compared to less than 50% beforehand – and more than fully price two cuts by year’s end. U.S. Treasury yields plunged to their lowest in over a month. Ten-year yields clocked the biggest one-day fall of the year and the 2-30-year yield curve widened to its steepest in over three years. The dollar swooned, giving back a chunk of last month’s rally. Most of these moves were pared back slightly first thing on Monday.
* U.S. stocks ended down more than 1% on Friday, having already been jarred by the August 1 tariff announcements, and the VIX ‘fear index’ jumped above 20 for the first time since June – likely reflecting unexpected jobs market weakness and a duff earnings outlook from Amazon. Futures were back up more than 0.5% ahead of Monday’s bell as another heavy week of earnings beckons and Palantir tops Monday’s diary. With two-thirds of the S&P 500 having reported Q2 updates, the blended annual profit growth rate for the 500 firms is running at 11% – almost twice estimates one month ago and back roughly to where expectations were on January 1.
Market Minute:
* White House economic advisers on Sunday defended Trump’s firing of McEntarfer, pushing back against criticism that it could undermine confidence in official U.S. economic data.
* A top aide to Trump on Sunday accused India of effectively financing Russia’s war in Ukraine by purchasing oil from Moscow, after the U.S. leader escalated pressure on New Delhi to stop buying Russian oil.
* The Bank of England is widely expected to cut its key interest rate to 4% from 4.25% on Thursday and to lower it once more before the end of the year, despite consumer price inflation rising in June to almost double the central bank’s 2% target.
* Only a few months ago, it would have been a brave call to say that OPEC+ would be able to bring back 2.5 million barrels per day of crude production and still keep oil prices anchored around $70 a barrel. But this is exactly what has occurred. ROI columnist Clyde Russell asks whether the group’s lucky timing can continue.
* The Korean equity market, which went from being among the worst performers in Asia last year to the best regional performer in 2025, stumbled over the past week. The rally has fundamental support, but it could sputter if expected shareholder-friendly reforms don’t materialize, argues Emmer Capital Partners CEO Manishi Raychaudhuri.
Chart of the day:
Feeling the heat? July was the third warmest on record worldwide – some 1.25 degrees Celsius warmer than the pre-industrial era average.
Today’s events to watch
* U.S. July employment trends (1000 EDT), June durable goods orders (1000 EDT)
* US corporate earnings: Palantir, Loews, Tyson Foods, Coterra Energy, ON Semiconductor, Vertex, Waters, SBA communications, Diamondback Energy, Williams, IDEXX, ONEOK, Axon
— Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(by Mike Dolan; editing by Kirsten Donovan)
Comments