A weak US June payrolls print — just 57,000 jobs with downward revisions to prior months — has become the pivot point for global rate expectations, according to a broad sweep of published research this week.
Multiple research desks argue the miss materially lowers the odds of further Fed hikes, with market pricing for additional tightening falling from over 40bp to around 29–31bp. Recent dovish comments from Fed Chair Kevin Warsh reinforced that shift, analysts note.
Running alongside: oil has collapsed. Brent is down more than 22% and WTI sits near $68.50 after OPEC+ raised output and Strait of Hormuz flows normalised post-ceasefire. Researchers argue this is reshaping inflation expectations globally — nudging the ECB's September hike odds below 50% and complicating the RBNZ's July 8 call, where one camp sees a hold and another still expects a 25bp move.
A contrarian thread suggests the Fed's next move is actually a cut, though not until 2027. On Japan, some published views warn the BOJ is falling behind the curve, with JGB yields drifting toward 3%.
Key watch: FOMC minutes, RBNZ, and US CPI.