Optimism about US interest-rate cuts surged after Federal Reserve Chair Jerome Powell stated that inflation is on a downward trajectory. Investors are now closely monitoring US initial jobless claims and ADP employment data due on Wednesday for further insights into the policy outlook. Powell acknowledged the central bank has made “quite a bit of progress” in reducing inflation but emphasized the need for more evidence before considering rate cuts.
With US markets set to close early on Wednesday ahead of the July 4 holiday, attention is shifting to the critical US payrolls report due on Friday. Economists forecast that the report will show employers added around 200,000 jobs in June, with the unemployment rate holding steady at 4%.
In other markets, oil climbed to near a two-month high, while the Dollar Spot Index and Treasury yields remained relatively unchanged.