The USD is mixed to start the US trading session. The US jobs report will be released at 8:30 AM ET. Recall from last month the nonfarm payroll rose by 147,000, but 73,000 (nearly half) of it was local and state government workers. That will likely not be repeated. In summary from last month:

  • State & local government: +73,000 jobs (+47K state; +23K local education)

  • Health care: +39,000 jobs (+16K hospitals; +14K nursing & care facilities)

  • Federal government: –7,000 jobs

  • Minimal change in: construction, manufacturing, retail trade, transportation, professional services, leisure/hospitality, among others

Ahead of today's report, the ADP was higher, but has not really been indicative of BLS numbers. Challenger layoffs increased. The ISM data

  • ADP Private-Sector Payrolls: July +104,000 jobs (above 77,000 expected)

  • Challenger Job Cuts: July 62,075 cuts (second-highest on record for July)

  • ISM / PMI Employment Components: Manufacturing ISM due later today; Services ISM out next week

  • Initial Jobless Claims (4-Week MA): Latest weekly claims 218,000; 4-week average ~220,000 (stable but cooling)

The market is expecting:

  • Non-Farm Payrolls: Est. 110k, Prior 147k

  • Private Payrolls: Est. 100k, Prior 74k

  • Manufacturing Payrolls: Est. -3k, Prior -7k

  • Government Payrolls: Est. No est, Prior 73k

  • Unemployment Rate: Est. 4.2%, Prior 4.1%

  • Average Earnings MoM: Est. 0.3%, Prior 0.2%

  • Average Earnings YoY: Est. 3.8%, Prior 3.7%

  • Average Workweek Hours: Est. 34.2, Prior 34.2

  • Labor Force Participation Rate: No Est, Prior 62.3%

  • U6 Underemployment: No est, Prior 7.7%

The video above outlines a technical levels in play for the 3 major currency pairs ahead of the report - the EURUSD, USDJPY and GBPUSD.

Just out, Fed's Bowman and Waller explained their dissent at the FOMC meeting this week. Recall they wanted to cut rates by 25 basis points.

  • Fed Governor Michelle Bowman dissented from the July FOMC decision, arguing that with a slowing economy and softening labor market, it was appropriate to begin gradually moving toward a neutral policy stance. She emphasized the rising risks to the Fed’s employment mandate, noting that if demand conditions don’t improve, employers might resort to layoffs, worsening the economic outlook. Bowman highlighted that delaying a policy shift could harm the labor market further. On inflation, she stated that upside risks have diminished and that tariff-driven price pressures are likely temporary. She supports a proactive approach in adjusting policy, seeing no persistent inflation shock from tariffs.
  • Fed Governor Christopher Waller also dissented, but from the opposite angle—arguing for a 25bps rate cut. He reiterated the case he made in his July 17 speech, emphasizing that tariffs are one-time price level shifts, not drivers of sustained inflation, and that inflation expectations remain anchored. Waller said the Fed is now near a neutral policy rate and should not maintain restrictive settings. He pointed to accumulating downside labor risks and argued that waiting for clearer data could result in acting too late. He viewed the current stance as overly cautious, potentially risking unnecessary economic weakness if policy isn’t adjusted soon

In tariff news, it is August 1 so the new tariffs go into effect today. Late yesterday, the president disclosed the tariffs for those countries not previously announced.

Below is the summary:

  • Canada: Increased from 25% to 35%, citing fentanyl and political concerns

  • India: 25%

  • Switzerland: 39%

  • Taiwan: 20%

  • South Africa: 30%

  • Pakistan, Malaysia, Thailand, Cambodia, Philippines: 19% each

  • Iraq: 35%

  • Syria: 41% (highest of all listed)

Further countries and their newly imposed tariffs include:

  • 15%: Afghanistan, Brunei, Cambodia, Ghana, Japan, Jordan, New Zealand, Norway, South Korea, UK, others

  • 18%: Nicaragua

  • 20%: Bangladesh, Sri Lanka, Taiwan, Vietnam

  • 25–30%: Algeria (30%), Bolivia (15%), Kazakhstan (25%), Tunisia (25%), Libya (30%)

  • 35%: Serbia

  • 39%: Switzerland

  • 41%: Syria

Tiered Structure Overview

The tariff plan uses a tiered structure based on trade relationships:

  • 10% for countries with a U.S. trade surplus

  • 15% as the baseline for most deficit nations

  • 15–41% “reciprocal” tariffs for countries deemed to engage in unfair trade practices

The US stocks are not looking good this morning with the major indices down sharply. A snapshot of the mortgagors:

  • Dow industrial average -356 point
  • S&P index -54 points
  • NASDAQ index -225 points

looking at the US debt market, yields are higher with a steeper yield curve:

  • 2-year yield 3.953%, +0.2 basis points
  • 5-year yield 3.986%, +2.6 basis points
  • 10 year yield 4.396%, +3.6 basis points
  • 30 year yield 4.929%, +4.5 basis points.
Source: Forex Live