Weak US June payrolls reshaped the macro conversation this week — and split the research community on what the Fed does next.
The 57k print (versus roughly 113k expected), paired with downward revisions, led most published research to conclude the case for further Fed tightening has materially softened, with July hike odds now near zero. But unemployment fell to 4.2% on collapsing participation, which kept analysts from turning outright bullish on bonds. A contrarian thread still sees three more hikes by autumn; another camp argues the Fed simply stays on hold through 2026–27 rather than cutting soon.
Running alongside: the AI capex cycle. Several recent notes frame hyperscaler spending as simultaneously the dominant earnings driver and a late-stage bubble risk, citing margin debt up 55% year-over-year and semiconductors up 237% in 14 months. Others treat it as a durable growth pillar.
Researchers also flagged Brent retracing toward pre-war levels as Gulf supply recovers, and rising odds of Japanese FX intervention with USD/JPY above 161.
Next catalysts to watch: US June CPI, FOMC minutes, and the BOJ.