Morning Wrap (03.07.2025)

Indices from the Asia-Pacific region post a mixed session. Chinese indices are down between 0.70–1.20%. Australian and Singaporean indices are losing around 0.20%, while the Japanese index is trading flat.

Today, market focus is on the U.S. nonfarm payrolls report, which will be published on Thursday instead of Friday due to the July 4th holiday. The report is key following the first negative ADP data since early 2022 on Wednesday.

Donald Trump has once again called for Fed Chair Jerome Powell to resign immediately. There is speculation that Trump may have had access to upcoming labor market data, suggesting a weak reading.

Powell’s future at the Fed remains uncertain — his term ends in May 2026, but he could stay on the board until 2028.

The House of Representatives has yet to vote on the “Big Beautiful Bill” backed by Trump. Speaker Mike Johnson has left the vote open indefinitely as he attempts to secure a majority. The delay highlights internal Republican divisions, and the outcome is crucial for Trump’s broader economic agenda.

Bank of Japan board member Hajime Takata expressed support for resuming interest rate hikes, citing strong corporate results and rising wages.

Australia posted a trade surplus of AUD 2.24 billion in May, well below the forecast of AUD 5.1 billion. Exports fell 2.7% m/m, while imports rose 3.8%. The data did not trigger a major market reaction.

Japan’s final June services PMI rose to 51.7, marking the third straight month of expansion. Business sentiment reached a four-month high, although export growth slowed slightly.

South Korean President Lee warned that tariff negotiations with the U.S. are very difficult. He stressed the need for a practical, mutually beneficial approach, but acknowledged that reaching an agreement by July 8 would be challenging.

South Korean intelligence reports that North Korea may send up to 30,000 troops to Russia under a military agreement. Deployment could begin as early as July or August.