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With a turbulent first half of the year coming to an end, the focus now turns to how central banks, especially the Federal Reserve, will manage markets in the coming months.
The new Fed president attends the European Central Bank conference in Sintra, where the focus is on US employment data, eurozone inflation data, UK policy and the technology sector.
Here’s a look at everything you need to know about the week ahead in global markets, from Lewis Krauskopf in New York, Gregor Stewart Hunter in Singapore, and Amanda Cooper, Mark Jones and Dhara Ranasinghe in London.
1/ IS GOOD EMPLOYMENT NEWS SYNONYMOUS WITH BAD NEWS?
The US jobs report next week comes amid growing speculation that the Federal Reserve will raise rates this year.
Traders will have to wait one less day: June non-farm payrolls data will be released on Thursday due to a US national holiday on Friday.
After the May report marked the third straight month of strong job creation, markets may be more cautious about overly solid numbers that highlight the economy’s resilience rather than weak results. The Fed’s surprisingly aggressive June meeting showed that policymakers are focused solely on getting inflation under control.
Traders are now expecting a rate hike by the central bank led by Kevin Warsh, which could happen as early as September.
2/ MEETING OF OLD FRIENDS IN SINTRA
The ECB is holding a meeting of central banks in Sintra, Portugal, where it will host Kevin Warsh on his first trip since taking office as Fed chief.
This is an opportunity for participants to reconnect with a figure many of them know well, having worked with her during her previous mandate at the Fed.
Markets are racing to gauge which Fed Warsh will lead and how proactive he will be when global financial stability comes under threat.
Having advocated easing monetary policy during the Fed governor nomination process, Mr. Warsh made clear at his first news conference that he was very serious about fighting inflation.
Bond operators have gotten the message and are now expecting rates to rise by the end of the year.
Of course, ECB President Christine Lagarde will also speak in Sintra, and eurozone inflation data for June due out on Wednesday could indicate whether the ECB should consider another short-term interest rate hike.
3/ AI MADNESS, CONFLICT: THE TWISTING FIRST HALF
Markets crossed the halfway mark after six months of high volatility, marked by turbulence driven by the United States – from Venezuela to Greenland via Iran – and the seemingly unstoppable rally in AI stocks.
AI’s meteoric rise means global stocks are now worth $7 trillion more than they were at the end of 2025, even after a $9 trillion plunge in March triggered by the Iran war, which sent oil prices soaring to $120 a barrel and dashing hopes of lower global interest rates.
South Korean stocks are up 100%, SpaceX is soaring while the Magnificent Seven as a whole are falling, Treasuries are holding steady and gold has lost its shine.
The second half also promises to be intense. Nervous UK bond markets await a new prime minister, currency traders still expect yen intervention, the Fed is hawkish and traders are bracing for President Donald Trump’s plan for the US midterm elections.
4/ KING OF THE NORTH
The United Kingdom has just marked the 10th anniversary of the Brexit vote that saw it leave the European Union and is preparing to welcome its seventh prime minister in a decade.
Keir Starmer has just announced that he will resign after two years in office, given the dizzying decline in his popularity both nationally and within his party, the Labor Party, which is currently in power.
Enter Andy Burnham, the favorite to succeed Starmer.
Burnham will set out his vision for Britain on Monday.
Markets are cautious. The former mayor of Greater Manchester, nicknamed the “King in the North” for his leadership during the COVID pandemic, is seen as more left-wing than Starmer.
He called for the nationalization of key industries and Britain’s return to the EU. The choice of finance minister will be critical to the country’s finances and its markets.
5/ WHEN THINGS GET WORSE
Asian chip stocks remain in focus as volatility rises across the region, including South Korea, Taiwan and Japan.
Apple’s price hikes reveal the downside of explosive demand for chips.
Investors are looking for the next catalyst after MSCI decided not to include South Korea in its transition to developed market status.
The focus now shifts to economic data, including South Korea’s monthly production and export figures released on Wednesday, a barometer of global demand that will be closely watched after huge export orders from Taiwan fell short of even higher expectations.
Japan’s flash business activity indexes show new orders continue to rise across Asia as customers stockpile inventories to avoid supply chain disruptions, showing the region unaffected by the war in Iran.
Memory chip maker SK Hynix will also launch a promotional campaign ahead of its secondary US listing on July 10, in which it hopes to raise $29.43 billion.
((Automatically translated by Reuters using machine learning and generative artificial intelligence, see the following disclaimer: (Updated article originally published on Friday, adding line about Burnham’s speech in section 4)