Ahead Today
G3: US Non-Farm Payrolls
Asia: China Exports, Taiwan Exports, Philippines GDP
Market Highlights
Oil prices jump and the Dollar strengthen on signs of renewed tensions in the Strait of Hormuz and ahead of the non-farm payrolls numbers later today. In particular, Iran will seek to bar US and Israeli ships from the Strait of Hormuz and require compensation from hostile countries before they are allowed to use it, according to local media reports on a proposed Iran-Oman deal. The text is now under review in Iran’s parliament according to media reports, while there were also separate reports of Houthis conducting a large-scale attack against forces from Yemen’s Saudi-backed government.
To be clear oil prices remain low in absolute terms even as it has jumped, with Brent still below US$85/bbl at the time of our writing. This is not to say it will not change, but overall, the global economy has shown continued signs of resilience despite these shocks, with rebalancing in oil helped by lower imports from China thus far. Our base case remains for oil prices to move lower over time, albeit perhaps continue to be buffered by escalation and de-escalation.
The key risk event is the US non-farm payrolls for July, with market consensus expecting an 80k increase; up from June’s 57k print. Our global team forecasts a 125k rise as they see that the industry, leisure & hospitality sector may have been undersampled in June, increasing the likelihood of a significant upward revision (see MUFG US Labour Update July 2026 NFP Preview).
The general sentiment among Fed officials seem to reflect a "slow-hire, slow-fire" equilibrium, with policymakers viewing overall labour demand as likely to cool to a sustainable pace even as persistent stickiness in core inflation keeps focus anchored on price stability. Highlighting this cautious outlook on employment dynamics, Chairman Warsh noted following the recent policy meeting that the underlying jobs data had "been moving in a good direction", possibly reinforcing the central bank's intent to weigh incoming payroll results against lingering inflation risks before altering any policy stance. Stubborn inflation pressures so far has turned several officials hawkish, and Kashkari, Logan, and Hammack prioritising fast action to reach the 2% inflation target, and Williams open to rate hikes if underlying inflation picks up against his base case expectation for some softening.