Synthèse Daily Macro

US: Non-farm payrolls (Jun): 147k vs 106k expected (prior: 144k revised from 139k)

• The US economy added more jobs than expected, primarily driven by state government and health care sectors. In contrast, the federal government continued to shed jobs.
• The unemployment rate unexpectedly dipped to 4.1% from 4.2%, while wage growth slowed to 0.2% from 0.4%. Annually, wages grew by 3.7%, down from 3.9%.
• The recent decline in the unemployment rate appears to be driven by a shrinking labor force. The participation rate unexpectedly fell from 62.4% to 62.3%, suggesting that the change is more about supply-side dynamics than increased demand for workers.
• Initial jobless claims came lower than expected (233k vs. 241k) while continuing claims stabilized at 1964k.
• So far, there are few signs of the trade war is hitting payrolls.
• This seemingly robust report diminishes the likelihood of a July rate cut by the Fed, amid concerns about a weakening labor market. Instead, it supports a cautious, wait-and-see approach. We expect two rate cuts in the fourth quarter.

US: Trade balance (May): -71.5 bn USD vs -71.0 bn expected (prior: -60.3 bn revised from -61.6 bn)

• The US trade deficit widened unexpectedly, driven by a 4% drop in exports, while imports saw a slight decrease of 0.1%.
• Significant declines in exports were observed in nonmonetary gold, natural gas, and finished metal shapes.

US: ISM Services (Jun): 50.8 vs 50.6 expected (prior: 49.9)

• The ISM services index surprised by rising above the 50 level, signaling expansion after a month of contraction.
• Key areas showed strong rebounds: business activity increased to 54.2 from 50, new orders rose to 51.3 from 46.4, inventories climbed to 52.7 from 49.7, and new export orders improved to 51.1 from 48.5.
• Although price pressures eased slightly, with the index at 67.5 compared to 68.7, concerns about rising operational costs were more frequent.
• Middle East tensions emerged in June's commentary, yet no supply chain disruptions were reported.

US: Factory orders (May): 8.2% m/m as expected (prior: -3.9% revised from -3.2%)

• New orders for US manufactured goods surged in May, and more than offset the revised 3.9% decline from previous month.
• According to the US Census Bureau, firms likely took advantage of the suspension of "Liberation Day" tariffs by the US government to front-load orders before the escalation with China and the broader potential resumption in July.

 Switzerland: CPI (Jun): 0.1% m/m vs -0.1% expected (prior: -0.1%)

• Swiss headline inflation exceeded expectations, aligning the Q2 average with the SNB's forecast of 0%.
• Both domestic and imported inflation rose, with domestic inflation increasing by 0.1 pp to 0.7%, and imported inflation climbing by 0.5 pp to 1.9%. The rise in imported prices may be influenced by the CHF appreciation against the USD.
• This print supports the SNB's stance from their June meeting: the threshold for implementing negative interest rates remains high, barring a significant downturn in the macroeconomic outlook. Chairman Schlegel emphasized that negative rates are reserved for "exceptional times".
• However, a substantial escalation in trade tensions or a significant narrowing of the rate differential with the ECB, leading to further CHF appreciation, could increase the likelihood of negative interest rates.

Eurozone: Services PMI (Jun F): 50.5 vs 50.0 expected (prior: 49.7)

• Final print of the eurozone services PMI has been revised higher from the flash estimate of 50 and firmly above the initial market expectations of 50 to reflect a slight expansion in the area's services activity.
• Composite was also revised higher to 50.6 from 50.2.

UK: Services PMI (Jun F): 52.8 vs 51.3 expected (prior: 50.9)

• Final estimation reveals a rapid expansion in the country's services sector, the strongest since August 2024, driven by renewed improvements in order books.
• New orders saw a slight increase, marking the second rise this year and achieving the fastest growth rate since November 2024, fueled by heightened domestic demand.
• Despite this growth, employment in the sector continues to contract significantly, hindered by rising payroll costs and weak capacity pressures.

US: ADP Employment change (Jun): -33k vs 98k expected (prior: 29k revised from 37k)

• The US private sector experienced its first job decline since March 2023, marking a shift from the revised increase of 29k jobs in May and falling well below the expected gain of 95k
• The decline was led by losses in professional and business services, along with education and health services.
• Meanwhile, manufacturing, construction, and mining sectors experienced payroll growth.
• While the print briefly supported the front end, the move was quickly reversed given ADP’s poor ability in predicting BLS private payrolls due tomorrow.

Eurozone: Unemployment rate (May): 6.3% vs 6.2% expected (prior: 6.2%)

• Eurozone jobless rate edges up from record low, with the bloc’s largest economies, Germany (3.7%) and the Netherlands (3.8%) reported the lowest unemployment rates, while Spain (10.8%), France (7.1%), and Italy (6.5%) continued to post higher levels.

US: ISM Manufacturing (June): 49.0 vs 48.8 expected (prior: 48.5)

• New orders: 46.4 vs 48.1 expected (prior: 47.6)
• Employment: 45.0 vs 47.1 expected (prior: 46.8)
• This gauge on the US manufacturing sector ticked higher in June but 11remains in contraction mode for the fourth consecutive month, with a worsening momentum for new orders and employment.
• The price measure edged marginally higher to 69.7, close to the highest level since June 2022.
• Company comments suggest that they are accelerating headcount reductions due to lower demand ahead of trade-policy announcements.

 US: JOLTS Job Openings (May): 7769k vs 7300k expected (prior: 7395k)

• Job openings unexpectedly rose to the highest level since November.
• However, three quarters of the increase in openings is explained by the hospitality sectors. The finance, transportation, warehousing and healthcare also saw gains, but they were more moderate.
• This adds to evidence that the job market remained solid in May.

US: Construction spending (May): -0.3% m/m vs -0.2% expected (prior: -0.2% revised from -0.4%)

• The construction sector continues to suffer from high interest rates which weigh on affordability while non-residential construction faces uncertainty related to tariffs.

Eurozone: CPI estimate (June Prel.): 2.0% y/y as expected (prior: 1.9%)

• Core CPI: 2.3% as expected (prior: 2.3%)
• Fully in line with expectation with the headline inflation up 10bp from a 9-month low and core CPI steady at the lowest level since early 2022, thanks to a stronger euro and lower energy costs.

Eurozone: Manufacturing PMI (June F.): 49.5 vs 49.4 expected (prior: 49.4)

• The final release is marginally higher thanks to a positive surprise in Spain (51.4 vs 50.5 expected, after 50.5 in May) vs a disappointing print in Italy (48.4 vs 49.5 expected, after 49.2 in May)

Germany: Unemployment rate (June): 6.3% vs 6.4% expected (prior: 6.3%)

• Unemployment claims rate SA: 11k vs 15k expected (prior: 33k)

Switzerland: Manufacturing PMI (June): 49.6 vs 44.0 expected (prior: 42.1)

• This stronger-than-expected rebound (to a 4-month high) probably reflects hope that an agreement with the US about the tariffs can be found.

Germany: CPI (Jun P): 0.1% m/m vs 0.3% expected (prior: 0.2%)

• Germany experienced an unexpected slowdown in inflation, primarily due to declining food prices and certain core categories, which outweighed rising road fuel costs.
• According to both the EU-harmonised HICP and the national CPI measure, consumer prices rose 2.0% y/y in June after 2.1% in May.
• Looking forward, eurozone inflation should remain in a 1.9%-2.0% range over the next months and ECB should consider maintaining interest rates steady until the end of the year, with a potential rate cut in December.

Italy: CPI (Jun P): 0.2% m/m vs 0.3% expected (prior: -0.1%)

• In June, Italy's inflation rate slowed more than anticipated. Rising fuel costs, driven by Middle East tensions, were offset by a decrease in utility bills. On an annual basis, inflation remained steady at 1.9%.

Eurozone: M3 (May): 3.9% y/y vs 4.0% expected (prior: 3.9%)

• M3 growth remained stable at 3.9%, slightly below expectations. Credit growth to the private sector held steady at 2.8% y/y.
• Notably, loans to non-financial corporations decreased by 0.1pp. to 2.5% y/y, while household loans increased by 0.1 pp. to 2% y/y.
• Overall, the recovery in credit growth seems to have lost momentum in May.