The US Dollar Index (USDX), remained on the defensive near 96.70 during the early Asian session on Thursday following a 0.15% increase on Wednesday. The Greenback edged lower after the ADP National Employment Report indicated a decline in US private payrolls for the first time in more than two years in June. This downbeat report has strengthened market expectations for a Federal Reserve (Fed) interest rate cut, thereby weighing on the USD. Furthermore, dovish comments from Fed officials are contributing to the dollar's depreciation. Fed Chair Jerome Powell stated on Tuesday that he wouldn't rule out a potential interest rate cut at this month's meeting, emphasizing that any decision hinges on incoming data.
Asian stock markets struggled for clear direction on Thursday, as investors awaited progress on U.S. trade deals ahead of the July 9 deadline and assessed fresh economic data from China and Australia. Most regional markets remained subdued, reflecting investor caution regarding President Donald Trump’s shifting positions on trade. Despite Trump announcing a new trade agreement with Vietnam on Wednesday, signaling a third deal before the deadline, he also cast doubt on a potential Japan deal and threatened substantial tariffs on imports from that nation. With less than a week remaining until the deadline, the U.S. has only secured three trade deals: with the UK, China, and Vietnam.
The Japan 225 index edged 0.23% lower on Thursday 06:53 AM GMT, following significant losses in the previous two sessions. The broader Japan 100 index was almost unchanged as investors reacted to trade uncertainties, including President Trump's recent skeptical comments about a potential trade deal with Japan. In China, data revealed that the country’s services sector grew less than expected in June, expanding at its slowest pace in nine months. The China SSE index rose by around 0.1%, while the China SZSE index gained more than 1% at 06:55 AM GMT Thursday, indicating mixed performance within mainland Chinese markets.
Main US equity indices rose on Wednesday, with the S&P 500 and Nasdaq notably bouncing back to respective record highs. However, Wall Street futures were largely unchanged in Asian trading hours on Thursday, reflecting a cautious stance among investors ahead of the crucial U.S. jobs report, due later in the day. This report is expected to provide key insights into the Federal Reserve’s interest rate outlook.
In corporate news, Tesla’s share rose 4.95% on Wednesday as electric vehicle sales in China saw a significant rebound in June, with units sold reaching 61,000. This figure marks a substantial 59% jump compared to May, alongside a 3.7% increase year-on-year, as reported by Tesla China on Thursday. However, this positive monthly performance comes amidst broader challenges. On Wednesday, Tesla reported its second consecutive quarterly drop in overall deliveries, signaling the company is on track for another annual decline. Deliveries in the second quarter fell by 13.5%, missing analysts’ expectations. This downturn is attributed to several factors, including backlash over CEO Elon Musk’s right-wing political views, escalating competition, and an intensifying price war within China’s rapidly growing EV market. Homegrown giants like BYD Co (up 0.74%) continue to expand their lead in battery-electric vehicles, while smartphone-backed newcomer Xiaomi (down 2.75%) with the YU7 has garnered massive pre-orders, further pressuring Tesla's sales.
In other corporate news, Microsoft confirmed on Wednesday that it is laying off up to 9,000 employees as part of its latest workforce reduction. The tech giant stated that approximately 4% of its global workforce, or around 9,100 employees, could be impacted by these cuts, marking the largest round of layoffs at the company since 2023.
Traders are now bracing for the US June employment data on Thursday, seeking fresh impetus and potential hints about the timing of the Fed's interest rate reductions. Economists project the US NFP to increase by 110,000 in June. Additionally, the Unemployment Rate is expected to tick higher to 4.3% for June. Any surprising upside in the US employment data could potentially help limit the USD’s ongoing losses.
EUR/USD
The euro posted slight losses against the US dollar on Wednesday, slipping 0.06% to trade below the key 1.1800 level. The move comes amid rising expectations that the Federal Reserve may ease monetary policy following weaker-than-anticipated US employment data, which has heightened concerns about a potential recession in the world’s largest economy.
The pullback in the euro followed the release of the ADP Employment Change report, which showed that US private sector payrolls declined in June for the first time in two years. ADP reported a loss of 33,000 jobs, far below expectations for a 95,000 gain, with the decline largely driven by service-providing industries. Although the dollar initially weakened, it regained ground as markets turned their attention to Friday’s closely watched Nonfarm Payrolls report.
A disappointing jobs report could further bolster bets that the Fed may cut rates sooner than anticipated. Richmond Fed President Thomas Barkin noted there's "no urgency" to alter policy, pointing to the importance of incoming data before the July meeting. Fed Chair Jerome Powell echoed a measured tone, saying current policy remains "modestly restrictive" and declined to commit to a rate cut, though he did not rule it out.
On the European front, the Eurozone unemployment rate rose to 6.3% in May, slightly above expectations for it to remain at 6.2%. Despite this, European Central Bank (ECB) policymakers signaled a balanced stance.
As investors await Friday’s NFP release, volatility in EUR/USD may increase. A significant downside surprise in US employment data could strengthen the case for Fed easing, weighing further on the dollar and potentially reversing recent gains.
Bitcoin
Bitcoin climbed on Wednesday as signs of progress in U.S. trade negotiations bolstered investor sentiment. However, traders remained cautious ahead of a series of key U.S. economic reports due later in the day, including the closely watched Nonfarm Payrolls.
The leading cryptocurrency broke out of its recent trading range between $103,000 and $108,000 on Wednesday, signaling a potential bullish trend, though it remains to be seen whether the move can be sustained.
The rally was fueled in part by optimism surrounding global trade developments. Markets reacted positively after the U.S. and Vietnam finalized a trade agreement—Washington's third deal ahead of a self-imposed July 9 deadline.
Additionally, the U.S. moved to ease some export restrictions on semiconductor technology to China, following a framework agreement reached in June. These developments revived hopes that further trade deals—especially with India—could be finalized soon, even as talks with Japan and South Korea faced delays.
President Donald Trump reaffirmed that the July 9 deadline for imposing new tariffs on major U.S. trading partners would not be extended, keeping markets on alert.
Attention also turned to the progress of a controversial tax bill moving through Congress. President Trump said a vote in the House of Representatives was expected later Thursday, though reports indicated the bill was still under debate. A preliminary vote revealed at least five Republican holdouts, casting uncertainty over its passage.
As global markets await fresh signals from Washington and the Federal Reserve, the crypto space remains highly sensitive to shifts in macroeconomic outlook and risk sentiment.
WTI Oil
Oil prices rallied on Wednesday, boosted by escalating geopolitical tensions in the Middle East and renewed optimism over global trade. The gains came after Iran suspended cooperation with the U.N. nuclear watchdog, heightening market concerns over potential supply risks. Additionally, news that the U.S. and Vietnam reached a last-minute trade agreement added to bullish sentiment. However, a surprise increase in U.S. crude inventories limited the upward momentum.
Oil also found support from trade headlines, after President Donald Trump and Vietnamese media confirmed a bilateral trade deal had been finalized. The agreement imposes 20% tariffs on several Vietnamese exports, following intense negotiations ahead of a July 9 deadline.
The trade agreement adds to a recent string of deals and eased market fears that further tariff escalation might derail global growth.
Despite the bullish geopolitical and trade developments, oil’s rally was tempered after the U.S. Energy Information Administration (EIA) reported a surprise build in domestic crude stockpiles. Inventories rose by 3.8 million barrels last week to 419 million barrels, defying analysts' expectations for a 1.8 million-barrel draw.
Concerns about demand also resurfaced, as gasoline consumption dropped to 8.6 million barrels per day—well below typical summer driving season levels.
Market participants are also monitoring supply dynamics ahead of the OPEC+ meeting on July 6.
Markets now await Thursday’s release of the U.S. Nonfarm Payrolls report, which is expected to influence Federal Reserve policy direction.
US 500
U.S. equities advanced on Wednesday, with the US 500 closing at an all-time high as a tech-led rebound and encouraging signs on the trade front helped offset disappointing labor market data.
Technology stocks bounced back following Tuesday’s volatility, helping to lift broader sentiment. Optimism around global trade also buoyed markets after President Donald Trump announced a trade agreement with Vietnam—marking the third deal ahead of the July 9 deadline when reciprocal tariffs are set to resume.
Trump reiterated that the July 9 deadline would not be extended, and formal letters outlining upcoming tariff rates would be sent to relevant countries. According to the Financial Times, the U.S. is now pursuing narrower, phased trade deals in an effort to secure quick wins before the deadline.
The report follows Tuesday’s data showing weaker hiring despite a rise in job openings, suggesting employers are becoming more cautious in the face of trade uncertainty and a slowing economy. Attention now turns to the June Nonfarm Payrolls report, due Thursday, for further insight into the strength of the labor market.
Tesla shares recovered on Wednesday, following steep losses the day prior. The bounce came despite renewed tensions between Elon Musk and President Trump, who accused Musk of profiting excessively from federal subsidies and called for a review of government support for Tesla. The electric vehicle maker reported 384,122 deliveries for Q2 2025—down from 443,956 in the same period last year, but better than some investors had feared.