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US equities rose as recession fears eased, while European and UK equities had mixed results. The S&P 500 gained 2.2%, the Euro Stoxx 50 remained unchanged, and the FTSE 100 fell by 0.3%. The yield on the US 10-year increased by 6.00 bps to 4.00%.
US initial jobless claims dropped by 17k last week to 233k, a larger decline than expected, while continuing claims matched expectations at 1.875 million. Despite typical seasonal factors like auto shutdowns, school holidays, and the impact of Hurricane Beryl, the market reacted positively to the data. The figures suggest a steady, rather than abrupt, weakening of the labor market, aligning with the possibility of a soft landing rather than a recession.
The data lowered the likelihood of the Fed making an emergency rate cut before the next meeting. As a result, the market adjusted its expectations, now pricing in 40 bps of cuts for the September meeting (down from 45 bps the day before) and 103 bps by year-end (down from 111 bps).
The USD initially surged after the data and rates market reaction but then gave up some of those gains.
Mid market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6594 |
| AUD/NZD | 1.0974 |
| AUD/JPY | 97.32 |
| AUD/CNY | 4.7370 |
| AUD/EUR | 0.6039 |
| AUD/GBP | 0.5173 |
AUD/USD 24 Hour
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