The US dollar is stable as we wait for the US jobs report and discussions on trade and taxes. The USD is showing minor changes against major currencies, with the NZDUSD dropping the most by 0.30%. This calm comes ahead of important events, including the early employment report, moved up because of the Independence Day holiday. Key predictions for this report are Non-Farm Payrolls at 110k and an unemployment rate of 4.3%. Markets expect an early close, with stocks finishing at 1 PM and bonds at 2 PM ET. Other economic data being released includes the International Trade Balance expected to be -71.0B and the Canadian Trade Balance projected at -5.90B. Meanwhile, US stock futures are slightly higher, suggesting modest gains for the Dow, S&P, and NASDAQ. In financial markets, US Treasury yields have dipped slightly, indicating moderate changes. Commodities are mixed, with crude oil decreasing a bit while silver and Bitcoin gain. Gold, however, has dropped slightly. Talks with EU officials about trade continue, hinting at possible tariff changes. Overall, the market feels cautious. It’s not inactive, but uncertainty has slowed down movements. We see lower trading volumes, not from lack of interest, but from hesitation. Investors seem reluctant to make big moves until the job data and tax discussions in Washington are clearer. These events will significantly influence expectations for rates and spending in the coming months. Looking ahead, we expect trading in the next sessions to react rather than predict. With Non-Farm Payrolls expected at 110,000 and an unemployment rate of 4.3%, any big surprise—higher or lower—could push the dollar out of its narrow range. A lower payrolls number could lower yields and the dollar, while stronger numbers might cause quick adjustments in bond markets and support the dollar. The trade balance data, both for the US and Canada, will also add pressure, especially if they widen more than expected. These figures can affect growth expectations and sway policymakers’ decisions later in the year. As financial markets close early for the holiday, liquidity is drying up sooner than usual, which could amplify reactions to any surprising data. Remember, thinner trading conditions can increase volatility, and this week, every headline is crucial. The yield curve is gently flattening, indicating some caution, especially at the short end. This signals that investors may be more concerned about possible policy changes or broader risks related to negotiations with Brussels. The consideration of trade barriers adds complexity to this picture. Tariffs, whether suggested or in place, can disrupt pricing. On the commodities side, the movement is mixed. Crude oil’s slight drop, despite ongoing geopolitical risks, suggests that supply is stable for now. The rise in Bitcoin and silver indicates continued demand in areas linked to hedging or speculation, revealing an undercurrent of unease, although this isn’t fully reflected in the indices yet. Stock markets remain strong for now. Small gains in major stock futures hint at cautious optimism as traders position themselves ahead of key data. We see this calm as more about patience than confidence. From a volatility perspective, traders should choose options that can adapt to data surprises rather than only relying on specific predictions. With the holiday approaching, time decay adds another factor to consider, making Friday’s trading more intense. This week is driven by timing and data risks, not yet by solid conviction.

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