EMEA Morning Briefing: Investors Await U.S. Jobs Report

MARKET WRAPS

Watch For:

EU unemployment; trading updates from Currys, Bang & Olufsen, Sodexo, Volvo Car

Opening Call:

European stock futures edge higher early Thursday. Asian stock benchmarks were mixed; the dollar and Treasury yields were little changed; oil futures and gold fell.

Equities:

Stock futures point to a higher open in Europe as investors await U.S. economic data and parse comments from the new Federal Reserve Chairman Kevin Warsh, ahead of the Fourth of July long weekend in the U.S.

At a conference in Portugal on Wednesday, Warsh dodged questions about whether an interest-rate hike is in the cards this month but said that inflationary risks have eased since the central bank's last meeting.

Focus today is on the U.S. June nonfarm payrolls report, which will serve as a test for Wall Street's upbeat expectations for the economy.

Forex:

The dollar was flat ahead of the U.S. nonfarm payrolls report. The report poses two-way risks for the U.S. dollar, given volatility of the data, Maybank analysts said. "If it comes out much stronger than expected, this would continue to back the dollar upward momentum but if it is the other way round, then expect the opposite pullback," the analysts added.

Bonds:

U.S. Treasurys yields were little changed as investors digested comments from Fed chairman Kevin Warsh ahead of the payrolls report. Treasurys pared overnight gains after Warsh suggested that business investment in AI could expand the productive capacity of the economy.

Warsh declined to say whether the Fed would need to consider raising rates later this month, but said his first weeks in the job have seen risks of higher inflation retreat.

Energy:

Rising energy shipments through the Strait of Hormuz have prompted UBS to cut its 2026-27 oil-price forecasts. UBS now expects Brent crude to average $84 a barrel this year, down $9 a barrel from earlier. Its 2027 oil-price forecast is now at $75 a barrel, from $85 a barrel.

"Lower geopolitical risk and quick rebound in flows have led to a steeper price decline than we had expected," UBS said. It expects prices to rebound slightly to $80 a barrel in 2H this year as floating storage in the Gulf normalizes and demand picks up.

"The need to refill inventories should still support prices through 2027 but the required inventory rebuild is smaller than we previously expected at 1 billion barrels," UBS said.

Metals:

Gold prices could reach $5,000 a troy ounce in early 2027, as the bull cycle for the yellow metal still has legs, said State Street Investment Management. Gold's status as a monetary hedge is likely to be supported by rising government debt, while physical demand for gold remains resilient, it said.

A hawkish Federal Reserve pivot shouldn't change the structural post-Covid dynamic for gold, it said. State Street expects baseline bullion prices to rally to $4,750-$5,500 an ounce over the next six to nine months.

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Iron ore futures advanced. However, underlying fundamentals remain weak, with global shipments still relatively ample, portside inventories staying structurally elevated, and steel demand in China continuing to soften, Galaxy Futures analysts said.

TODAY'S TOP HEADLINES

Warsh Says Inflation Outlook Has Improved but Won't Say if Fed Should Hike Rates

Federal Reserve Chairman Kevin Warsh declined to say Wednesday whether the central bank needed to consider a rate increase later this month but said his first weeks in the job have seen risks of higher inflation recede. That was evidence, he said, that markets have already grasped his hard line on prices.

"Expectations of future inflation [over the last four weeks] have come down. Inflation risks have come down," Warsh said at a conference in Portugal alongside foreign counterparts. Anyone expecting the Fed would tolerate inflation running above its 2% goal "would be disappointed," he added.

Is the U.S. jobs market getting better? June employment report to give us a heat check.

Is it getting easier to find a job? Are businesses really hiring more workers? That's what the official data statistics tell us, but Americans aren't so sure.

The number of new jobs created in June will provide more answers. Here's what to watch on Thursday, when the employment report is released a day early due to the July 4 holiday.

Europe Learns It's Hard to Start a Trade War With China During a Heat Wave

European trade negotiators have suggested China is flooding the continent with too many goods. But state-media commentators in China are gleefully pointing out there is at least one product Europeans are eager to import more of: air conditioners.

"If China stops selling air conditioners, will European gentlemen still be so passionate about 'overcapacity'?" read a commentary published Wednesday by Yuyuantantian, a social-media account linked to state broadcaster CCTV.

Dubai Plots a Postwar Comeback That Repairs Its Shattered Image

DUBAI-Before the Iran war, 40,000 shipping containers a day moved through Jebel Ali port, a sprawling complex of deep-water piers and warehouses that powered this city-state's rise from backwater to international powerhouse.

Now, just 1,000 containers pass by the largely vacant docks. Port officials are racing to ramp back up to prewar traffic, but the reality, they say, is that it will take at least a month.

SpaceX Showed Investors Prototype of Elon Musk's New AI Device

Elon Musk's SpaceX has developed a prototype for a handset-like device designed to reshape how humans interact with artificial intelligence that SpaceX has shown investors recently.

The rocket and AI company showed the prototype, which features a sleek design that is slimmer than an iPhone, to some investors and other stakeholders ahead of the company's mega initial public offering, according to people familiar with the matter.

The Anthropic Fable Ban Is Over. The Battle Over How to Tame AI Has Just Begun.

SAN FRANCISCO-Like much of the tech world, startup founder Quinn Slack was riled up.

It was just hours after the Trump administration on Tuesday said it was lifting its weekslong export ban on Anthropic's powerful artificial-intelligence model dubbed Fable. But the reversal had done little to ease Slack's fears about government control over AI.

Write to singaporeeditors@dowjones.com

Expected Major Events for Thursday

06:00/ROM: May PPI

06:30/SWI: Jun CPI

07:00/SPN: Jun Unemployment

07:30/EU: Jun EuroCOIN indicator of euro area economic activity

08:00/ITA: May Unemployment

08:30/UK: 2Q Bank of England Credit Conditions Survey

08:30/UK: 2Q Bank of England Bank Liabilities Survey

09:00/MLT: May Registered Unemployed

09:00/EU: May Unemployment

09:00/CYP: Jun CPI

15:00/DEN: Jun Foreign Exchange & Liquidity

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

July 02, 2026 00:15 ET (04:15 GMT)