Weekly Market Roundup — July 3, 2026

The US ISM manufacturing index eased slightly to 53.3 in June, falling below consensus expectations. However, the index has remained within a narrow range between 52 and 54 through the first half of 2026, indicating resilience in the manufacturing sector after a prolonged period below 50. The employment index within the ISM report rose to its highest level in 17 months, though it remains soft by historical standards.

ADP reported a gain of 98,000 jobs in June, with the three-month moving average staying above the 100,000 mark. ADP's data for job switchers showed little improvement in wage growth. Separately, non-farm payrolls (NFP) increased by 57,000 in June, below expectations but sufficient to modestly lower the unemployment rate to 4.2%.

While jobs in leisure and hospitality declined, professional and business services continued to add positions, accumulating 172,000 new jobs since October 2025. Revisions to April and May job figures showed a combined downward adjustment of 74,000, yet the six-month trend suggests ongoing stabilization in the labor market. Reduced downside risks to employment, particularly with the US-Iran conflict potentially resolving, may shift focus towards inflation concerns.

The UK manufacturing PMI declined to 52.5 from 53.9, though manufacturing output recorded its strongest growth in nearly two years. This rise was attributed to temporary stockpiling amid concerns over higher goods prices, as new orders growth fell to a six-month low. Output price inflation remained near a four-year high, but a recent decrease in energy prices is expected to lead to lower input prices.

The Euro Area economic sentiment index improved for the second consecutive month, rising 1.3 points to 95.0 in June. Despite this uptick, the index remains below its long-run average, suggesting ongoing near-term weakness in activity, though a full-scale contraction is deemed unlikely. Bank lending to the real economy in the Euro Area gradually accelerated, with annual growth rising from 3.0% in February to 3.5% in May.

Euro Area headline inflation decreased to 2.8% in June from 3.2% in May, averaging 3.0% in Q2, which is below the European Central Bank's (ECB) forecast of 3.2%. This undershoot was largely attributed to declining energy prices. Crucially, core inflation also fell to 2.4%, matching February's levels.

China's Caixin services PMI slightly exceeded expectations for June, indicating some re-firming of services activity. However, the official PMIs were weaker, with the composite reading at 50.6 in June, largely unchanged from 50.5 in May.

Japan's retail sales unexpectedly rose by 5.3% year-over-year in May, a significant increase from 2% in the previous month, driven by improved sentiment and rising real wages. Tankan manufacturing surveys also showed strength, highlighting resilient corporate capital expenditure intentions. Japan's composite PMI advanced to 52.8, primarily due to a recovery in services activity.

Consumer confidence and composite PMIs in Australia improved, rising above 50, which eased concerns about a sharp economic slowdown. Across the rest of emerging markets in Asia, PMIs generally remained above 50, with the exception of Indonesia, where currency and equity market pressures impacted sentiment.

Upcoming key economic releases include the US ISM services index for July, China's CPI and PPI data, and Japan's PPI. These reports will provide further insights into economic trends and inflationary pressures across these major regions.