Investing.com -- Friday’s U.S. jobs report will be the highlight of what will be a holiday-shortened week as markets look for clarity on when exactly rate cuts could start. Comments by Federal Reserve Chair Jerome Powell will be closely watched, along with Wednesday’s minutes of the U.S. central bank’s latest meeting. Elections in France and the UK will also keep markets on high alert. Here’s your look at what's happening in markets for the week ahead.

U.S. jobs data

Investors will be focusing their attention on Friday’s nonfarm payrolls report as they look for fresh indications on when the Federal Reserve might start to cut interest rates.

Economists are expecting the U.S. economy to have added 189,000 jobs in June after a larger than forecast gain of 272,000 the previous month highlighted the resilience of the labor market.

The Fed kept rates unchanged earlier this month and pushed out the start of rate cuts to perhaps as late as December, as officials look for more convincing signs that inflation is pulling back to the central bank's target, or evidence that the labor market is cooling.

Ahead of the nonfarm payrolls data, a report on Tuesday is expected to show that job openings declined again in May, indicating that companies are having more success filling positions.

Powell, Lagarde comments; Fed minutes

Fed Chair Jerome Powell is to make an appearance at the European Central Bank’s annual forum in Sintra, Portugal on Tuesday.

Powell, along with ECB President Christine Lagarde is to participate in a panel discussion on "monetary policy in an era of transition" with investors on the lookout for any fresh insights on the future part of interest rates.
 

Inflation is receding after spiking in the first quarter but continues to run above the Fed’s 2% target.

Meanwhile, Wednesday’s minutes of the Fed’s June meeting will be parsed for the central bank’s view of the economic outlook and the factors influencing the monetary policy outlook.

Elections in France, UK

France goes to the polls on Sunday, the first round of its shock snap election that has roiled markets.

Investors will look out for any hints of the results of the second round a week later. But a 577-constituency race where candidates just need 12.5% of the vote to make it to the second round, also featuring three-way races, means uncertainty may prevail.

Meanwhile, polls predict a landslide British election win for the opposition Labour Party on Thursday, sending sterling back to levels not seen since 2016's Brexit vote.

Traders see a return to stability after heavy political turbulence during the Conservatives' 14-year rule and have speculated Labour leader Keir Starmer could rebuild trade links with Europe.

But it remains to be seen how large of a majority Starmer will be able to command in Parliament.

Eurozone inflation

The Eurozone is to release June inflation data on Tuesday, following Germany’s report on Monday, with economists expecting a slight slowdown in both the headline and underlying measures after an uptick in May.

The ECB is to publish the minutes of its June meeting, when it cut interest rates for the first time since September 2019, on Thursday.

Though the ECB began hiking interest rates later, the June cut put it ahead of the Fed on its march lower, as the world’s largest central bank remains stymied by above target inflation.

China PMIs

Official data on Sunday showed that manufacturing activity in China declines for a second month in June while services activity slipped to a five-month low, keeping alive calls for further stimulus as the world’s second largest economy struggles to gain momentum.

The Caixin manufacturing PMI, due Monday, is expected to tick lower.

Analysts expect China to roll out more policy support measures in the short term, while a government pledge to boost fiscal stimulus is seen helping kick domestic consumption into a higher gear.

--Reuters contributed reporting

By Ann Saphir

(Reuters) - U.S. President Joe Biden and his Republican rival Donald Trump both took credit for what they said was a strong economy under their watch and blamed the other for punishing inflation as they battled on the debate stage before the Nov. 5 election.

"He's done a poor job and inflation is killing our country. It is absolutely killing us," said Trump, who was president from 2017-2021. Under his own watch, Trump said, "everything was rocking good."

Biden pinned inflation, which peaked at 9% two years ago and has since dropped to 3.25%, on Trump's handling of the COVID-19 pandemic, along with corporate greed.

"The economy collapsed" under Trump, Biden said, and when he came into office "what we had to do is try to put things back together again."

Massive disruptions from the COVID-19 pandemic, which began in March 2020, make comparing the economic records of the two rivals difficult.

But one thing is certain - inflation has been far higher under Biden than it was under Trump. There was not a single month under Trump in which consumer price inflation exceeded 3%, and for most of that time, the Federal Reserve - whose job it is to maintain stable prices - worried that inflation was too low.

Under Biden, inflation has been above 3% for all but his first three months in office, and was above 5% for more than half his term so far.

The damage from higher prices has been significant: even though wages have risen, the bigger weekly paychecks American workers take home buy less than they did when Biden came into office in 2021.

When inflation first began to take off in the spring of 2021, most analysts and policymakers at the Fed thought it would be transitory. But by late 2021, almost nobody thought so.

The Fed, in response, increased borrowing costs aggressively to bring down inflation, and prices are now no longer rising as fast as they were.

Despite higher interest rates, usually expected to cool economic growth, the labor market has been tight, with the unemployment rate at or below 4% for the last two years, the longest such run since the 1960s.

As inflation has fallen, average wage growth in the U.S. has exceeded inflation for more than a year now, with lower income workers - such those in the leisure and hospitality sectors - among those whose real wages have risen the most.

Economists blame the inflation surge on a broad set of factors, including surging demand after the pandemic shutdowns, households flush with cash from pandemic-era stimulus delivered under both Trump and Biden, and lingering disruptions to trade and supply chains from both the pandemic and Russia's invasion of Ukraine.

Quarterly economic growth during Trump’s first three years, and during Biden’s term beginning in 2021, each compounded at an almost identical rate that annualizes to around 2.7%.

By Makiko Yamazaki and Takaya Yamaguchi

TOKYO (Reuters) -Japan appointed a new top foreign exchange diplomat on Friday as the yen plumbed a 38-year low against the dollar, heightening expectations of imminent market intervention by Tokyo to shore up the battered currency.

Atsushi Mimura, a financial regulation veteran, replaces Masato Kanda, who launched the biggest yen-buying intervention on record this year.

The change is part of a regular personnel reshuffle conducted every year and comes as officials ramped up their warnings about intervention.

Finance minister Shunichi Suzuki said on Friday authorities were "deeply concerned" about the impact of "rapid and one-sided" foreign exchange moves on the economy.

The yen slid past 161 per dollar on Friday to its weakest since 1986.

Speaking at a regular press conference, Suzuki said authorities would respond appropriately to excessive currency moves and that confidence in the Japanese currency is maintained.

"The government is closely monitoring developments in the foreign exchange market with a high sense of urgency," Suzuki said, adding efforts to continue forging ahead with fiscal reform is crucial.

The yen fell to 161.155 per dollar on Friday morning, with neither an overnight drop in U.S. yields nor data showing solid consumer price gains in Tokyo arresting the slide.

Japanese authorities are facing renewed pressure to stem sharp declines in the yen as traders focus on the interest rate divergence between Japan and the United States.

Tokyo spent 9.8 trillion yen ($60.91 billion) intervening in the foreign exchange market at the end of April and early May, after the Japanese currency hit a then 34-year low of 160.245 per dollar on April 29.

NEW DIPLOMAT

Mimura's appointment as top FX diplomat will take effect on July 31 after the meeting of the Group of 20 finance ministers and central bank governors in Rio de Janeiro from July 25.

Little, however, is known about his stance on currency policy.

Currently head of the ministry's international bureau, the 57-year-old will become vice finance minister for international affairs - a post that oversees Japan's currency policy and coordinates economic policy with other countries.

Having spent nearly a third of his 35-year government career at Japan's banking regulator, Mimura has expertise and international ties in the area of financial regulation.

During his three-year stint at the Bank for International Settlements in Basel, Mimura worked with Mario Draghi to set up the Financial Stability Board in the midst of the 2008-2009 global financial crisis to reform financial regulation and supervision.

At the finance ministry, he worked on the revision to the law over the Japan Bank for International Cooperation last year to expand the scope of the state-owned bank and make foreign companies key to Japan's supply chains eligible for loans from the bank.

Mimura was also part of a government team that briefed foreign investors on the 2020 revisions to foreign ownership rules to dispel the notion that tighter rules were meant to discourage foreign investment in Japan.

Mimura takes over from Kanda who, during his three-year tenure, actively jawboned markets to combat sharp yen falls he described were driven by speculators.

Kanda oversaw a bout of yen-buying intervention in late April and early May, in which Japan spent $62 billion to prop up the sagging currency.

A weaker yen is a boon for Japanese exporters, but a headache for policymakers as it increases import costs, adds to inflationary pressures and squeezes households.

SAO PAULO (Reuters) - Brazilian President Luiz Inacio Lula da Silva on Thursday signed into law a 20% tax on international purchases of up to $50, despite having previously criticized the measure.

Lula signed the bill into law during a meeting of his Council for Sustainable Economic and Social Development in Brasilia.

The tax on online international low cost purchases was a request from Brazilian retailers who argue that they are being victims of unfair competition, mainly against Chinese e-commerce giants.

In May, Lula had said he was willing to negotiate with lawmakers about taxing cross-border low cost purchases of up to 50 dollars, but he did not rule out the possibility of vetoing the measure. At the time, the president pointed out that the measure could impact people with lower income.

The highly controversial tax was attached to a bill that creates the so-called Green Mobility and Innovation program (Mover).

By Rae Wee

SINGAPORE (Reuters) - Asian stocks were headed for a fifth straight month of gains on Friday, bolstered by the growing view that cooling inflation in the United States would allow the Federal Reserve to ease rates later this year.

Friday is packed with risk events for markets after a relatively subdued rest of the week, with U.S. Democratic President Joe Biden and his Republican rival Donald Trump set to take the stage at 0100 GMT for their first debate of the year ahead of November's U.S. presidential elections.

Chinese markets, in particular, will be looking out for comments about the trade relationship with Beijing, which has further soured in recent years.

On the data front, figures for May's U.S. core personal consumption expenditures (PCE) price index - the Fed's preferred measure of inflation - are due later on Friday, and could offer further clarity on the U.S. rate outlook.

"If tonight's core PCE inflation were to come in much hotter than the 2.6% expected and after upside surprises to Canadian and Australian inflation data this week, it would inflame concerns that the decline in global inflation has bottomed out and may have reaccelerated in some countries," said Tony Sycamore, a market analyst at IG.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.06% early in the Asian session, and was on track to gain some 3.2% for the month, its best performance since February.

Growing expectations of an imminent Fed easing cycle and momentum from the artificial intelligence boom have sparked a risk rally across stock markets and catapulted Wall Street to record highs, in turn lifting Asian shares.

Traders are now pricing in a 64% chance of a first Fed cut in September, up from 50% a month ago, according to the CME FedWatch tool.

Japan's Nikkei jumped 0.78%, reversing some of its losses from the previous session. It was eyeing a monthly gain of 3%, helped by a weak yen and a rally in technology stocks.

S&P 500 futures and Nasdaq futures both ticked higher, rising 0.18% and 0.3%, respectively.

In currencies, the yen continued to languish near a 38-year low on the weaker side of 160 per dollar, leaving markets on alert for any intervention from Japanese authorities to prop up the currency.

The yen was last marginally higher at 160.68 per dollar, but was set to lose more than 2% for the month, as it continues to be hammered by stark interest rate differentials between the U.S. and Japan.

"Considering that the current pace of depreciation is slower than in April, there should be no reason why 160 has to be the line in the sand," said Vincent Chung, associate portfolio manager for T. Rowe Price's diversified income bond strategy.

"Most expectations suggest that intervention would likely occur if there were a quick depreciation to 163."

Tokyo spent 9.79 trillion yen ($60.94 billion) at the end of April and in early May to push the yen up 5% from its then 34-year low of 160.245.

Data on Friday showed core consumer prices in Japan's capital rose 2.1% in June from a year earlier, highlighting the challenge the Bank of Japan faces in timing its next interest rate hike, as cost pressures from the weak yen keep inflation above its 2% target but also hurt consumption.

The euro was last 0.04% higher at $1.0707, though it was headed for a 1.3% monthly decline as the common currency continues to be weighed by political turmoil in the bloc, with France's snap election due to kick off this weekend.

In commodity markets, gold has felt the burden of a firm dollar and fell 0.14% to $2,324.12 an ounce. [GOL/]

Brent crude oil futures rose 0.24% to $86.60 a barrel, while U.S. West Texas Intermediate crude futures gained 0.29% to $81.97 per barrel.

By Jonathan Stempel

NEW YORK (Reuters) - Ten large banks including Bank of America, Goldman Sachs and JPMorgan Chase (NYSE:JPM) will pay $46 million to settle a long-running antitrust lawsuit accusing them of conspiring to rig the now $465.9 trillion market for interest rate swaps.

Lawyers for investors filed a preliminary settlement to end the eight-year-old nationwide case on Thursday in Manhattan federal court.

The settlement requires approval by U.S. District Judge Paul Oetken, and boosts the value of all settlements in the case to $71 million.

Other settling banks include Barclays, BNP Paribas (OTC:BNPQY), Citigroup, Deutsche Bank, Morgan Stanley, NatWest and UBS.

Investors led by the city of Baltimore and pension funds in Chicago, Los Angeles and Michigan accused the banks of trying from 2013 to 2016 to corner swaps trading, in part by boycotting three upstart platforms that offered better prices and let buy-side investors trade with each other.

This allegedly led to "tremendous profits" for the banks because of their role as dealers, primarily in the form of bid/ask spreads, the investors said.

Credit Suisse, now part of UBS, agreed in 2022 to pay $25 million to settle investors' claims. A different judge dismissed a 12th bank, HSBC, as a defendant in 2017.

All of the banks have denied wrongdoing.

Oetken's refusal in December to certify a class action made the investors' case more difficult, because it's often more costly and not worth the trouble for individual investors to sue on their own.

Lawyers for the investors did not immediately respond to requests for comment. They called the settlement an "excellent recovery" given the challenges of further litigation, oourt papers show.

Interest rate swaps let parties exchange future interest payments, typically by exchanging a fixed rate for a floating rate, to manage risk or bet on whether rates will rise or fall.

The case is part of more than a decade of litigation in Manhattan accusing big banks of colluding in various markets including interest rate benchmarks, U.S. Treasuries, currencies and commodities.

The case is In re: Interest Rate Swaps Antitrust Litigation, U.S. District Court, Southern District of New York, No. 16-md-02704.

BEIJING (Reuters) - China hopes to reach mutually acceptable solutions through negotiation with the European Union on planned tariffs on Chinese electric vehicles to avoid escalation of trade friction, the Chinese commerce ministry said on Thursday.

Working teams from both sides have maintained close communication to expedite relevant work, ministry spokesperson He Yadong said at a news briefing.

By Jonathan Stempel

(Reuters) -A federal appeals court on Wednesday struck down part of the U.S. Securities and Exchange Commission's 2022 rollback of rules that critics said impeded the independence of proxy advice firms that help investors vote in corporate elections.

By a 3-0 vote, the 5th U.S. Circuit Court of Appeals said the SEC's explanation for rescinding rules adopted just two years earlier during the Trump administration was "arbitrary and capricious and therefore unlawful."

The rollback covered requirements that proxy firms such as Institutional Shareholder Services and Glass Lewis notify companies about their advice no later than when they notify clients, and provide clients a means to obtain companies' written responses to that advice.

In announcing the changes, SEC Chair Gary Gensler said it would promote "the timeliness and independence of proxy voting advice, which would help to protect investors and facilitate shareholder democracy."

An SEC spokeswoman said the regulator is reviewing the decision and will determine its appropriate next steps.

The rollback was challenged by Natural Gas Services Group (NYSE:NGS), which supplies compression equipment to the energy industry, and the National Association of Manufacturers.

"Today's decision confirms that federal agencies are bound by the rule of law, even as administrations change," Linda Kelly, the trade group's chief legal officer, said in a statement.

The dispute is part of a long-running battle over how to regulate firms that advise investors how to vote on corporate matters such as shareholder proposals, the election of directors, and whether to approve mergers.

Writing for the appeals court, Circuit Judge Edith Jones said the SEC failed to adequately explain what was wrong with its earlier finding that the 2020 rules posed little or no risk to the timeliness and independence of proxy voting.

She also said the SEC failed to reasonably explain why the risks were so significant that rescission became necessary.

"This was the agency equivalent of saying, 'That was then--this is now,'" Jones wrote.

The New Orleans-based 5th Circuit is perhaps the most conservative of the 13 federal appeals courts. The three judges in Wednesday's panel decision were appointed by Republican presidents.

The case is National Association of Manufacturers et al v SEC et al, 5th U.S. Circuit Court of Appeals, No. 22-51069.

By Rae Wee

SINGAPORE (Reuters) -The yen languished near a 38-year low on Thursday and struggled on the weaker side of 160 per dollar, keeping markets on alert for any signs of intervention from Japanese authorities to prop up the currency.

In the broader market, the dollar pared some of its gains from the previous session as U.S. Treasury yields eased a touch, though the greenback held near an eight-week high against a basket of currencies.

The yen rose 0.3% to 160.33 per dollar in the Asian session, nursing some of its losses after having fallen to a low of 160.88 on Wednesday, its weakest since 1986.

The Japanese currency has fallen some 2% for the month and 12% for the year against a resilient dollar, as it continues to be hammered by stark interest rate differentials between the U.S. and Japan, which has maintained the appeal of using the yen as a funding currency for carry trades.

In a carry trade, an investor borrows in a currency with low interest rates and invests the proceeds in higher-yielding assets.

Still, the yen's latest slide past the key 160 per dollar level has kept traders nervous over possible intervention from Tokyo, after authorities spent 9.79 trillion yen ($60.94 billion) at the end of April and in early May to push the yen up 5% from its 34-year low of 160.245 then.

Analysts said while the risk of intervention has increased, Japanese authorities could be holding out for Friday's release of the U.S. personal consumption expenditures (PCE) price index before entering the market.

"Both the level of the exchange rate and pace of the depreciation are important for the Ministry of Finance (MoF) to consider intervening in FX markets," said Boris Kovacevic, global macro strategist at Convera.

"However, subdued volatility in options markets suggests that the recent leg higher has not met all criteria the MoF is looking for.

"Policymakers could wait out Friday's PCE report that is expected to show continued disinflation in the U.S. before making a final decision before the weekend."

DOLLAR STRENGTH

Sterling edged away from an over one-month low of $1.2616 hit the previous session and rose 0.13% to $1.2638, while the euro advanced 0.11% to $1.0693.

Still, the common currency was on track to lose roughly 1.4% for the month, weighed down by political turmoil in the euro zone in the lead up to France's snap election set to begin this weekend.

The dollar index dipped 0.1% to 105.92, not far from a nearly two-month high of 106.13 hit in the previous session, on the back of a rise in U.S. Treasury yields.

"I just think it's a combination of things," said Ray Attrill, head of FX strategy at National Australia Bank (OTC:NABZY), of the higher U.S. yields.

"A few people have been mentioning when (Japan) intervened back in April, May, that there was some suggestion that if the Bank of Japan was going to have to be offloading Treasuries to fund the intervention, it could have an impact.

"But I think there's maybe a bit of a ... lag effect of - Aussie yields were much higher after the CPI, and I think for once, that actually had a little bit of contagion impact to bond markets elsewhere."

An upside surprise in Australian inflation on Wednesday had caught traders off-guard and prompted markets to raise the chances of another interest rate hike this year, which in turn sent domestic yields higher.

The Australian dollar rose 0.23% to $0.6663, drawing some support from Wednesday's inflation shock, while the New Zealand dollar ticked up 0.07% to $0.6088.

Currency moves outside of the yen have been largely subdued for the most part of the week, as traders await Friday's U.S. core PCE data - the Federal Reserve's preferred measure of inflation, for further clues on the U.S. rate outlook.

Wednesday was the last day that investors could trade currencies for the quarter, given that spot foreign exchange settlement takes two business days.

Trading of U.S. stocks, however, moved to a shorter settlement cycle last month, known as T+1.

($1 = 160.6500 yen)

By Daniel Ramos

LA PAZ (Reuters) -Bolivian armed forces pulled back from the presidential palace in La Paz on Wednesday evening and a general was arrested after President Luis Arce slammed a "coup" attempt against the government and called for international support.

Earlier in the day, military units led by General Juan Jose Zuniga, recently stripped of his military command, had gathered in the central Plaza Murillo square, home to the presidential palace and Congress. A Reuters witness saw an armored vehicle ram a door of the presidential palace and soldiers rush in.

"Today the country is facing an attempted coup d'état. Today the country faces once again interests so that democracy in Bolivia is cut short," Arce said in comments from the presidential palace, with armed soldiers outside.

"The Bolivian people are summoned today. We need the Bolivian people to organize and mobilize against the coup d'état in favor of democracy."

A few hours later, a Reuters witness saw soldiers withdraw from the square and police take control of the plaza. Bolivian authorities arrested Zuniga and took him away, though their destination was unclear.

Inside the presidential palace, Arce swore in José Wilson Sanchez as the military commander, Zuniga's former role. He called for calm and order to be restored.

"I order that all personnel mobilized on the streets return to their units," Sanchez said. "We entreat that the blood of our soldiers not be spilled."

The United States said it was closely monitoring the situation and urged calm and restraint.

Tensions have been building in Bolivia ahead of general elections in 2025, with leftist ex-President Evo Morales planning to run against former ally Arce, creating a major rift in the ruling socialist party and wider political uncertainty.

Many do not want a return of Morales, who governed from 2006-2019 when he was ousted amid widespread protests and replaced by an interim conservative government. Arce then won election in 2020.

Zuniga said recently that Morales should not be able to return as president and threatened to block him if he attempted to, which led Arce to remove Zuniga from his post.

Ahead of the attack on the presidential palace, Zuniga had addressed reporters in the square and cited growing anger in the landlocked country, which has been battling an economic slump with depleted central bank reserves and pressure on the boliviano currency as gas exports have dried up.

"The three chiefs of the armed forces have come to express our dismay," Zuniga told a local TV station, calling for a new cabinet of ministers.

"Stop destroying, stop impoverishing our country, stop humiliating our army," he said in full uniform, flanked by soldiers, insisting the action being taken was supported by the public.

Zuniga told reporters later on Wednesday that Arce had on Sunday asked him to "raise something up" to boost his popularity, without offering evidence.

Interior Minister Eduardo del Castillo later said Zuniga was seeking to court popular support and that the nine people injured in the attempt proved "this was not a drill."

'STRONGEST CONDEMNATION'

Morales, head of the ruling MAS socialist party, said that his supporters would mobilize in support of democracy.

"We will not allow the armed forces to violate democracy and intimidate people," Morales said.

Bolivia's public prosecutor's office said it would launch a criminal investigation against Zuniga and others involved in the attempted coup.

Public support for Arce and Bolivia's democracy has poured in from regional leaders and beyond.

"We express the strongest condemnation of the attempted coup d'état in Bolivia. Our total support and support for President Luis Alberto Arce Catacora," Mexican President Andres Manuel Lopez Obrador said on X.

Even conservative political opponents of the government in Bolivia condemned the military action, including ex-President Jeanine Anez, who was imprisoned in 2022 amid political turmoil.

"I fully reject of the mobilization of the military in the Plaza Murillo attempting to destroy constitutional order," she wrote on X. "The MAS with Arce and Evo must be got out through the vote in 2025. We Bolivians will defend democracy."