ADP Non-Farm Employment Change, Jobless Claims, FOMC Meeting Minutes

EUR/USD spent Tuesday in a churning pattern, ending the session with minor gains of 0.11%.

Pan-EU HCOB Core Harmonized Index of Consumer Prices (HICP) inflation held steady at 2.9% MoM in June, holding steady at the previous figure and snubbing the forecast decline to 2.8%. Overall YoY HICP inflation eased to 2.5% as forecast, ticking down from the previous 2.6%, but European inflation figures remain notably above the European Central Bank’s (ECB) 2% target band.

US JOLTS Job Openings rose slightly in May, climbing to 8.14 million. Indicators of increasing slack in the US labor market are starting to emerge, providing the rate-cut-desiring financial markets with optimism that the Fed may be compelled to implement a rate reduction sooner rather than later.

Wednesday’s upcoming European market session will see final Producer Price Index (PPI) and HCOB Purchasing Managers Index (PMI) figures, while the US trading window features ISM Services PMI figure and the latest ADP Employment Change numbers.

Gold prices experienced a slight decline on Tuesday due to the rise of Treasury yields. Investors were absorbing remarks made by Federal Reserve Chair Jerome Powell and awaiting the upcoming U.S. jobs data, seeking further indications of potential U.S. interest rate adjustments.

The U.S. central bank still needs more data before cutting interest rates to ensure recent weaker inflation readings give a true picture of what is happening to underlying price pressures, Powell said.

Focus now shifts to Friday's non-farm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates.

On Tuesday, oil prices closed at a lower level after moderating from their two-month peak. This occurred despite the anticipation of heightened demand during the Independence Day holiday and potential supply challenges arising from geopolitical tensions and weather-related disturbances.

Crude’s recent run-up was largely driven by hopes that fuel demand in the U.S. will pick up with the onset of the travel-heavy summer season.

The American Automobile Association forecast that a record number of people will travel by car during the current week, on account of the Independence Day holiday.

Attention will also be on the latest data on U.S. crude stockpiles from the industry body American Petroleum Institute later in the session.

On Tuesday, the main stock indexes of Wall Street concluded the day with an upturn, driven by the rise in Tesla and the robust performance of megacap growth stocks. However, trading volumes remained low due to the upcoming July Fourth holiday and the eagerly anticipated release of June nonfarm payrolls on Friday.

The U.S. job openings and labor turnover survey showed job openings increased in May after posting outsized declines in the prior two months, but layoffs picked up amid slowing economic activity.

Tesla surged to its highest level since the start of January after the EV maker reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter.

U.S. Federal Reserve Chairman Jerome Powell told a panel that recent economic data represented "significant progress," though he noted that the Fed needed to see more before changing policy.