First light news: US jobs, Trump’s 'Big Beautiful Bill', tariff headlines

Despite economists forecasting a slowdown along with the ‘whisper number’ circulating at less than 100,000, the widely anticipated June US jobs report indicated that the economy added 147,000 new payrolls, from an upwardly revised figure of 144,000 in May.

Unemployment drops to 4.1%

You will recall that before the release of yesterday’s data, most of the indicators, aside from May’s JOLTS job openings (Job Openings and Labor Turnover Survey), suggested that a weaker report was on the table. This was clearly not the case, and, with the labour force shrinking – which, by extension, lowered the participation rate – unemployment fell to 4.1%, defying some estimates which had placed it as high as 4.4%.

In terms of wage growth, we saw a moderate easing on both a year-on-year and month-on-month basis, cooling to 3.7% (down from 3.8% [revised]) and 0.2% (down from 0.4%), respectively.

Aside from the jobs data helping to ‘seal the deal’ for the US Federal Reserve (Fed) to remain on the sidelines this month, the latest figures show the economy humming along nicely, and, for now at least, brushing aside US President Donald Trump’s tariffs, interest rates, and geopolitical headwinds. As you would expect, given the strong jobs report, a moderate hawkish repricing was also observed in the Fed rate. Markets are now pricing in around 62 basis points (bps) of easing for the year, down from 67 bps prior to the release of yesterday’s data.

US equities cheered the jobs report, with major US equity indices pencilling in fresh all-time highs. The S&P 500 registered a record high for the second day in a row, adding 0.8%; the Nasdaq 100 also hit a new record, climbing 1.0%, with the Dow also chalking up 0.8%.

US Treasury yields and the US dollar (USD) rose following the announcement, though the move was swiftly faded, and, as of writing, the USD Index is trading at pre-announcement levels.

In other news:

Green light for Trump’s US$3.4 trillion ‘Big Beautiful Bill’

Trump’s ‘Big Beautiful Bill’ has passed both chambers of Congress and is poised to be signed into law later today, potentially providing a boost to risk assets and alleviating some of the uncertainty surrounding the debt ceiling. This serves as comprehensive legislation that will alter government expenditure, taxes, and domestic policies in the US.

Tax provisions include eliminating Federal taxes on overtime and tips, as well as implementing a 12% tax cut for families earning under US$100,000 annually. The bill also involves reducing funding for Medicaid and the Supplemental Nutrition Assistance Program (SNAP), while increasing spending on border security, including the construction of a wall and the recruitment of thousands of new Immigration and Customs Enforcement (ICE) and Border Patrol personnel.

Trade tariff headlines

Speaking at Joint Base Andrews Air Force Base in Maryland yesterday, Trump said that he could begin sending letters to various trading partners as early as today, setting unilateral tariff rates ahead of the July 9 deadline. In the usual Trump fashion, however, specifics were few and far between regarding who would be receiving the letters, but he did note that there would be approximately 10 letters per day going out, leading up to the deadline.

Currently, we have limited information on completed trade deals, and those that have supposedly been signed still seem somewhat vague at this stage. What is clear, however, is that many countries are striving to secure deals with the US.

Day ahead

As for the day ahead, it will be relatively thin in terms of macroeconomic event risk, and with the US closing its doors in observance of Independence Day, liquidity may be limited.