Morning Note: US Jobs Rebound Eyed; ECB Holds; BoE Cautious on Growth

From 37K to 90K? June U.S. Jobs Rebound Eyed

The U.S. ADP Employment Change for May came in at just 37,000, reflecting a notable slowdown in private sector hiring. However, for June, the figure is expected to rebound to 90,000. This anticipated increase could be attributed to several factors, including a potential pickup in business activity following a temporary lull in May, as well as seasonal hiring trends typical of mid-year. Additionally, recent signs of resilience in consumer demand and service-sector activity may have encouraged employers to expand their workforce more aggressively in June. This data is set to be released today at 12:15 GMT.

(USD/CAD Daily Chart, Source: Trading View)

From a technical analysis perspective, the USD/CAD currency pair has been moving in a bearish trend since February 2025, as indicated by the formation of lower highs and lower lows. Recently, it failed to break above the swap zone of 1.3700 – 1.3730, with bearish forces pushing it lower. Therefore, the pair may potentially continue its decline to retest the previous low around 1.35391.

ECB Seen in No Rush for Further Rate Cuts

Estonian policymaker Madis Müller stated on Tuesday that the European Central Bank (ECB) can afford to wait before considering further interest rate adjustments, as additional easing may not be necessary in the current cycle. Since June last year, the ECB has lowered its deposit rate by a total of 2 percentage points, but it has signalled a pause for July. Market participants now expect only one more rate cut later in the year, reflecting a growing consensus that the ECB is nearing the end of its easing path.

Müller noted that with inflation essentially at the ECB’s 2% target, economic growth picking up, and interest rates no longer holding back activity, the bank has the space to adopt a wait-and-see approach. He added that upcoming U.S.–EU trade talks and increased fiscal spending in Germany, particularly on military and infrastructure, could reshape the economic outlook. With inflation risks now broadly balanced, a rarity in recent years, the ECB has reason to proceed cautiously until more clarity emerges.

(EUR/JPY Daily Chart, Source: Trading View)

From a technical analysis perspective, the EUR/JPY currency pair has been in a bullish trend since March 2025, as indicated by the formation of higher highs and higher lows. Recently, it broke above the order block at 166.45 – 166.90, pulled back to retest the zone, found support, and continued to surge upward, indicating that the bullish momentum remains intact. Therefore, this valid bullish structure may continue to push the pair higher, potentially retesting the resistance zone at 170.90 – 171.30.

UK Jobs Softening, BoE Cautious on Growth Outlook

Bank of England Governor Andrew Bailey, in an interview with CNBC on Tuesday, pointed to a weakening labour market and rising global uncertainty as key factors dampening the UK’s economic growth and business investment outlook. He noted that a central question for the BoE is how much this economic slowdown will ease inflationary pressures. While inflation remains on the bank’s radar, Bailey leaned more toward highlighting downside risks to the economy rather than stressing persistent inflation threats.

Bailey also mentioned that the BoE is closely monitoring whether recent price increases could become more entrenched. In its June policy meeting, the central bank held interest rates steady in a split decision, citing inflation risks stemming from both a weakening jobs market and geopolitical tensions, particularly higher energy prices linked to the Middle East conflict.

(GBP/USD Daily Chart, Source: Trading View)

From a technical analysis perspective, the GBP/USD currency pair has been in a bullish trend since January 2025, as indicated by the formation of higher highs and higher lows. Recently, it broke above the swap zone of 1.3370 – 1.3430, pulled back to retest the zone, found support, and continued to surge upward. Therefore, this valid bullish structure may continue to drive the pair higher, potentially retesting the resistance zone of 1.3930 – 1.3980.

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