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A busy week for US corporate earnings lies ahead, with major banks and technology companies set to unveil their second-quarter results. Earnings from banking giants including JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo are expected to provide important insights into the health of the US economy and financial markets. In the technology space, updates from chipmakers and AI-related firms such as ASML and Taiwan Semiconductor Manufacturing
Company will be closely watched for signs of sustained demand in the semiconductor sector, while results from Netflix could offer further clues on consumer spending trends.

Geopolitics and Oil: Renewed geopolitical tensions in the Middle East early in the week initially triggered dollar safe-haven demand and inflation concerns, briefly lifting the dollar and oil prices. However, by the end of the week, speculation over renewed peace negotiations weighed on oil prices and reduced demand for the safe-haven dollar.

Fed Minutes: Investors reassessed the Federal Reserve's monetary policy outlook following the release of the June FOMC Minutes, which indicated lingering hawkish concerns over inflation but did not signal a shift toward a more aggressive tightening stance. As a result, markets scaled back expectations of additional near-term policy tightening.

Global Currency Shifts: The US dollar weakened against several major currencies this week, with sterling climbing to a one-month high amid renewed expectations of a relatively hawkish stance from the Bank of England. The New Zealand dollar also gained support after the Reserve Bank of New Zealand delivered a 25-basis-point rate hike and signaled that further tightening may be required. Meanwhile, the Japanese yen also advanced as investors reacted to reports of potential measures aimed at boosting domestic investment in Japan.

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A surprisingly weak June payrolls report knocked the U.S. dollar lower, as investors swiftly pared bets on further Federal Reserve tightening.
After consecutive months of resilience, the U.S. economy added just 57,000 jobs in June, falling short of economists' forecasts for a gain of 110,000, while the unemployment rate eased to 4.2% from 4.3%.
Adding to the pressure on the US dollar, Kevin Warsh said on Wednesday that inflation risks had eased in recent weeks, while reaffirming the Federal Reserve's commitment to bringing inflation back to its 2% target.
Now, market hopes for a continued hawkish Fed have faded following Kevin Warsh's data-dependent remarks and a weaker-than-expected U.S. payrolls report.

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This week's US employment report, brought forward to Thursday due to the Independence Day holiday, is set to dominate market attention as investors gauge whether the labour market remains strong enough to support the Fed's hawkish stance. Elsewhere, markets will also monitor GDP data from the UK and Canada, Eurozone inflation and unemployment figures, manufacturing PMI releases from the US, the UK and China, as well as Japan's Tankan Manufacturing Index for further insight into the global economic outlook.