Stock markets continue to walk a tightrope between relief and uncertainty. While investors may continue to give recent peace hopes the benefit of the doubt, it is likely still too early for genuine advance praise given the many question marks. Skepticism regarding a substantive deal between Iran and the US is likely to continue to influence market events. Investors on both sides of the Atlantic expect actions rather than words. US President Donald Trump had expressed reservation regarding a potential agreement with Iran concerning the Strait of Hormuz. However, he stated that the strategic strait was „sort of open right now.“.
Despite signs of easing in the Middle East conflict – concrete results remain absent for now
Following the recent record run, investors remain in a classic fact-check mode. The past easing signals in the Iran war should not obscure the fact that the situation in the Middle East remains fragile and the recent erratic course could enter the next round at any time. Too often in recent months, investors have been disappointed by supposed peace signals. Despite the recent record-breaking sentiment, the overall situation could remain challenging. Alongside geopolitical imponderables, monetary policy question marks and a more critical evaluation of the AI hype are likely to shape trading activity.
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ISM purchasing managers, JOLTs and ADP data moving
At the beginning of the week, it was the ISM Manufacturing Purchasing Managers' Index, which at 55.6 points in July exceeded the pre-forecast estimates (54 points) and thus is likely to have provided momentum.
The so-called „JOLTs“ (Job Openings and Labor Turnover Survey) already provided a first taste of today's „NFPs“ on Tuesday. At 7.359 million job openings, they were below expectations (7.4 million), compared to 7.537 million units in the previous month.
Mid-week, ADP employment data came in significantly weaker than expected, which typically also serves as a preliminary appetizer for the official jobs report.
The counterpart to the ISM Purchasing Managers' Index for the service sector came in slightly worse than expected on Wednesday afternoon at 54.1 points (compared to the expected 54.5 points), following 54 points in the previous month.
US job data in focus: Economists expect higher job growth compared to June
Economists expect a non-farm payroll increase of 80,000 jobs, following the creation of 57,000 new jobs in June. The US unemployment rate could remain at 4.2 percent, unchanged from the previous month. Average hourly earnings could rise by 3.5 percent compared to the same month last year, remaining at the same level as in June. Not least, these data could send inflation signals and thus monetary policy impulses.
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