Trump fires BLS statistician amid claims payroll data was rigged
|EU mid-market update: Trump fires BLS statistician amid claims payroll data was rigged; Oil steady despite OPEC+ production hike; Palantir to report after close.
Notes/observations
- Europe is all green except the Swiss SMI (-0.5%) playing catch-up from Friday when Trump announced raised Switzerland tariffs to 39%.
- First full week of low volume Aug begins. Historically this month has seen some turbulent unwinding's and increased volatility as liquidity dries up while market participants are on holiday.
- In July, persons unemployed 15 weeks or longer, as a percent of US civilian labor force (seasonally adjusted) rose to 1.8% v 1.6% prior (multi-month high).
- Trumps firing of BLS statistician with claims that nonfarm payroll numbers and job report were rigged (no evidence), is painting a dangerous precedent of undermining US integrity. Can we trust future economic data if Trump fires those reporting unflattering numbers as ‘fake’? Dollar index remains below 100, relatively flat since its drop on Fri, triggered by miss in payrolls. Comes amid an environment of hostility and pressure for Fed Chair Powell to cut rates, however, Trump did appease concern on this, stating he will not fire him as it would ‘upset markets’, and will wait until his term ends in 2026.
- For geopolitical tensions, Trump’s order of two nuclear submarines repositioned ‘to appropriate regions’ after Russia’s Medvedev comments is mostly symbolic. Realistically, nuclear power nations have submarines in close position to adversaries and in state of readiness all the time, in eventually of escalation, it is just unreported.
- Ahead of ChatGPT-5 release likely this week, another new open-source model from China just emerged: MetaStone’s XBai o4, a 32.8-billion-parameter LLM trained with a novel “Reflective Generative Form,” now outperforms OpenAI’s o3-mini, while slashing inference cost by up to 99%.
- Asia closed mostly higher with exception of Nikkie225 that closed -1.2%. EU indices +0.4-1.7% (ex-Swiss). US futures +0.6-0.8%. Gold -0.1%, DXY -0.3%; Commodity: Brent -1.2%, WTI -1.3%; Crypto: BTC +0.8%, ETH +2.6%.
Asia
- Japan PM Ishiba noted that implementation of trade deal was harder than reaching agreement, needed to keep watching how trade deals were implemented; Govt was ready to compile extra budget if needed.
Europe
- Switzerland Pres Keller-Sutter stated that the Swiss govt had already made contact with US side [following tariff rate of 39%].
Americas
- Fed Gov Adriana Kugler to resign from Fed Board, effective Aug 8th [her term had been set to end Jan 31, 2026].
- Fed's Williams (voter): Going into Sept meeting with an open mind; modestly restrictive policy was still needed.
- President Trump stated that he would announce a new Federal Reserve governor and a new Bureau of Labor Statistics (BLS) commissioner in the coming days.
Energy
- Group of 8 OPEC+ nations confirm further oil production increase by 547K bpd from Sept, ahead of schedule, citing steady global economic outlook.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 +0.70% at 539.54, FTSE +0.45% at 9,109.25, DAX +1.08% at 23,724.87, CAC-40 +1.00% at 7,621.88, IBEX-35 +1.10% at 14,301.50, FTSE MIB +1.68% at 40,612.00, SMI -0.46% at 11,768.71, S&P 500 Futures +0.65%].
Market focal points/key themes: European indices open generally higher and remained in the green through the early part of the session; notable excepting being Switzerland which was closed on Friday when Trump’s 39% tariff was announced; markets seen positive amid prospect of last-minute trade deals; among better performing sectors are financials and energy; lagging sectors include health care and consumer discretionary; EssilorLuxottica acquires A&R; focus on US durable goods to be reported later in the day; earnings expected in the upcoming Americas session include Adtran, BioNTech, Tyson Foods and Loews.
Equities
- Consumer discretionary: Swatch [UHR.CH] -0.5%, Richemont [CFR.CH] -1.0% (Swiss-US trade tensions), PostNL [PNL.NL] +11.0% (earnings)
- Energy: BP [BP.UK] +1.5% (oil and gas discovery).
- Healthcare: AB Science [AB.FR] -2.0% (placement) - Industrials: ABB [ABBN.CH] -1.5% (Swiss-US trade tensions), Stabilus [STM.DE] -8.5% (earnings; cut outlook), Senior [SNR.UK] -3.5% (earnings).
Speakers
- BOE seen sticking to once-a-quarter rate cut stance as growth remains weak. Vote expected to be split three ways on policy preference as MPC see balancing risks from higher inflation and cooling job market.
- Ukraine Central Bank (NBU) July Minutes: Vote was unanimous to keep policy steady.
Currencies/fixed income
- USD remained under pressure following last week US jobs report as markets were currently pricing over 86% probability of a 25-basis-point rate cut from the Fed in September. Markets also looking closely at Trump’s pick for outgoing Feb member Kugler. Her decision to resign added another layer of uncertainty to the outlook for monetary policy.
- GBP/USD at 1.3270 in a quiet EU session. BOE MPC likely to have differing views at Thursday's interest-rate decision due to the UK's complicated outlook. Overall current consensus saw over a 90% chance of a 25bps rate cut this Thursday. BOE would likely maintain guidance for a gradual pace of policy easing.
- EUR/USD consolidating at 1.1550 area after Friday’s sharp rise higher,
- USD/JPY holding above 148 as yen benefits from lower US rate divergence to the JGB yields.
- 10-year German Bund yield at 2.70% and 10-year Gilt yield at 4.57%. 10-year Treasury yield: 4.25%.
Economic data
- (CH) Swiss July CPI M/M: 0.0% v -0.2%e; Y/Y: 0.2% v 0.1%e.
- (CH) Swiss July CPI EU Harmonized M/M: 0.3% v 0.2% prior; Y/Y: 0.,1% v 0.2% prior; CPI Core Y/Y: 0.8% v 0.6%e.
- (ES) Spain July Unemployment Change: -1.4K v -48.9K prior; Employment Net Change M/M: +31.1K v +40.4K prior.
- (TR) Turkey July CPI M/M: 2.1% v 2.5%e; CPI Y/Y: 33.3% v 34.1%e; CPI Core Y/Y: 34.7% v 34.6%e.
- (TR) Turkey July PPI M/M: 1.7% v 2.5% prior; Y/Y: 24.2% v 24.5% prior.
- (CH) Swiss July PMI Manufacturing: 48.8 v 49.9e; PMI Services: 41.8 v 48.5 prior.
- (CH) Swiss Weekly Total Sight Deposits (CHF): 468.5B v 474.7B prior; Domestic Sight Deposits: 439.5B v 445.0B prior.
- (BR) Brazil July FIPE CPI - Monthly: 0.3% v 0.3%e.
Fixed income issuance
- None seen.
Looking ahead
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (DE) Germany to sell €3.0B in 6-month BuBills.
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €1.5-3.5B in 3-month and 6-mnonth bills.
- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).
- 06:00 (IL) Israel to sell bonds.
- 06:00 (NO) Norway announcement on upcoming bond issuance (held on Wed).
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
- 08:00 (MX) Mexico July Vehicle Domestic Sales: No est v 116.1K prior.
- 08:00 (MX) Mexico Leading Indicators M/M: No est v 0.09 prior.
- 08:00 (MX) Mexico July Consumer Confidence: No est v 45.4 prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).
- 08:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming issuance.
- 09:00 (FR) France Debt Agency (AFT) to sell €5.6-7.2B in 3-month, 6-month and 12-month bills.
- 10:00 (US) Jun Factory Orders: -4.8%e v +8.2% prior; Factory Orders (ex-transportation): 0.2%e v 0.2% prior.
- 10:00 (US) Jun Final Durable Goods Orders: -9.3%e v -9.3% prelim; Durables (ex-transportation): 0.2%e v 0.2% prelim; Capital Goods Orders (non-defense/ex-aircraft): No est v -0.7% prelim; Capital Goods Shipments (non-defense/ex-aircraft): No est v 0.4% prelim.
- 11:00 (DK) Denmark July Foreign Reserves (DKK): No est v 666.4B prior.
- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
- 13:30 (BR) Brazil Jun Total Formal Job Creation: +177.3Ke v +149.0K prior.
- 16:00 (US) Weekly Crop Progress Report.
- 17:00 (KR) South Korea July Foreign Reserves: No est v $410.2B prior.
- 19:00 (AU) Australia July Final PMI Services: No est v 53.8 prelim; PMI Composite: No est v 53.6 prelim.
- 19:00 (KR) South Korea July CPI M/M: 0.2%e v 0.0% prior; Y/Y: 2.1%e v 2.2% prior; CPI (ex-food/energy) Y/Y: 2.0%e v 2.0% prior.
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 86.3 prior.
- 19:50 (JP) BOJ Jun Minutes (2 decisions ago).
- 20:30 (JP) Japan July Final PMI Services: No est v 53.5 prelim; PMI Composite: No est v 51.5 prelim.
- 20:30 (HK) Hong Kong July PMI (whole economy): No est v 47.8 prior.
- 20:30 (SG) Singapore July PMI (whole economy): No est v 51.0 prior.
- 21:00 (NZ) New Zealand July ANZ Commodity Price M/M: No est v -2.3% prior.
- 21:00 (PH) Philippines July CPI M/M: 0.3%e v 0.1% prior; Y/Y: 1.1%e v 1.4% prior.
- 21:30 (AU) Australia Jun Household Spending M/M: No est v 0.9% prior; Y/Y: No est v 4.2% prior.
- 21:45 (CN) China July S&P (Caixin) PMI Services: 50.4e v 50.6 prior; PMI Composite: No est v 51.3 prior.
- 23:35 (JP) Japan to sell 10-year JGB Bonds.
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