Friday 3rd July 2026 NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NAB The non-farm payrolls from the US overnight came in softer than expected, but NAB’s Rodrigo Catril strong enough for the Fed to dismiss concerns about the labour market and focus more of inflation. Phil asks him about the impact of this on bond markets, whilst equities have been hit by more AI concerns. With Anthropic reportedly teaming up with Samsung to develop their own bespoke chips it increasingly hard to know how to pick the winners. They also discuss the rise in the Yen. If Japanese authorities are looking at currency intervention could the thinner trading of a US holiday be the time to do that? Hosted on Acast. See acast.com/privacy for more information.

Soft jobs, but not too soft

NAB Morning Call

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**Podcast:** NAB Morning Call

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[SPEAKER_A] US non-farm payrolls came in a little softer than expected. The yen rises, but without any intervention so far, it seems. But is it just around the corner? Easier perhaps to do when trading is thinner, like a public holiday. Any of those coming up? Oh yes, America's 250th birthday. So markets are closed today. Maybe that will do it. And chipmakers losing out again in the volatile world of AI. It's Friday, the 3rd of July 2026. It's The Morning Call from NAB. Good morning. Well, the US dollar, which has been rising lately, fell 0.5% today on the DXY. The Aussie is up 0.4%. The euro is up 0.5%. The Swiss franc is up 0.8%. The yen, though, up 0.9%. We'll talk about that today. The movements in bond yields overnight have been largely in Europe, up 2 or 3 basis points across the continent, UK included. Aussie 10 years were up 4 basis points yesterday to 4.82%. And shares are well down in the United States, a 1.1% drop in the Nasdaq. 0.5% for the S&P, but well up in Europe. The DAX is up 2.2%. The FTSE 100 is up 1.7%. And small movements up in oil. Brent is up 0.4% to just below $72 a barrel. WTI is up just 0.1%. So some big moves there. So what's going on? Here's NAB's Rodrigo Catril. Well, the big news overnight was non-farm payrolls. Good and bad. I mean, the unemployment rate has fallen. But we saw payrolls rise just 57,000, which is half what was expected and half what we got last month. And the participation rate has fallen. So is it good or is it bad?

[SPEAKER_B] Morning, Phil. Well, I suppose it depends on sort of what angle you're coming from. So from a labour market perspective, the job number was obviously a little bit of a disappointment. We also had revisions to the previous months, which I think it was around 74,000 in total. So meaningful revisions. But overall, when we look at the big picture, my sense is that it's important to remember that 6 months ago the issue was that the Fed was actually worried about the labour market potentially weakening. And one of the reasons why we actually had— or the market was thinking, well, there's potentially rate cuts coming. Then you have this sort of inflationary dynamic. And the initial rationale was, well, the Fed cannot hike because the labour market is still weak and hence the inflationary pressures are unlikely to be sustained. But now we are in a situation where the labour market is actually okay. The unemployment rate, it's declining and the job creation, while maybe not as strong as initially thought, is still there. And even when you look at the earnings, earnings have actually been creeping up. They were 2.9% just a couple of months ago. Now they're 3.5%. Yeah.

[SPEAKER_A] So 3.5% wage growth, isn't that inflationary?

[SPEAKER_B] Well, so there's a general rule of thumb that the average hourly earnings around 3, 3.5% are kind of okay for inflation or in line with that 2% inflation target. Anything above 4% beco...

Soft jobs, but not too soft

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Soft jobs, but not too soft

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.