Jobs Miss Fuels Risk Rally
MSCI’s emerging-market equity index rose about 2.2% on July 3, rebounding from losses earlier in the week, after data released Thursday showed the U.S. economy added just 57,000 jobs in June — roughly half the 110,000 consensus forecast. The Bureau of Labor Statistics also revised May payrolls sharply lower, to 129,000 from a previously reported 172,000. youtube.com bls.gov kitco.com
The cooler labor market reading prompted traders to scale back bets on near-term Fed tightening. According to CME FedWatch data, markets now price in a 52% probability of a rate hike at the September meeting, down from 64% before the report. The repricing lifted growth-sensitive assets across Asia and other emerging markets on Friday. cnbc.com reuters.com
Dollar Slides, EM Currencies Gain
The dollar index fell 0.2% in Asian trading Friday to 100.77, extending Thursday’s 0.5% drop. For the week, the index declined 0.58%, its largest weekly fall since early April. The weakening greenback provided relief for emerging-market currencies, which had erased their 2026 gains earlier in the week amid hawkish Fed speculation. businesstoday.com.my reuters.com bloomberg.com cnbc.com
The Japanese yen traded near 161 per dollar after rallying nearly 1% on Thursday, pulling back from 40-year lows. The euro held above $1.14. reuters.com kitco.com
South Korea in Focus
South Korea’s Kospi, which had plunged more than 8% in early June on rate-hike fears and suffered a further 10% drop on June 23 amid a leveraged-ETF scare, benefited from renewed tech-sector interest as borrowing-cost concerns eased. The index has been volatile in 2026 despite posting large year-to-date gains, with foreign investors having sold $78 billion of South Korean equities through mid-June. money.usnews.com reuters.com reuters.com
Federal Reserve Chair Kevin Warsh said Wednesday that war-related inflation risks have diminished, though he reiterated the central bank’s 2% average inflation target. Traders now see the earliest likely hike pushed to the fourth quarter, leaving room for emerging-market assets to recover further if U.S. data continues to soften. kitco.com
