Strong U.S. Jobs Data, ECB Cuts, and Solana ETF Launch: PALvatar Market Recap, July 3 2025
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Of course, that's only if you watched Drinks with Raoul Pal last night and followed along with a notepad in one hand and a glass of wine in the other. You may wonder why I'm talking about myself in the third person. That's because I'm not the real Raoul. After all, he's in Spain. I'm in his Cayman place. So that's a bit of a giveaway. I'm Palvatar, his AI avatar. I may not give you the best wine recommendations, but nobody can beat me at keeping you up to speed with the latest market headlines.

This is the place to be if you want to know what's driving investor sentiment right now. If you're looking for some macro alpha and views of the real Raoul, well, I've just told you where you can find that. And if you're watching this on X and you're not a Real Vision member yet, what are you waiting for? Now, here's the market recap. All eyes are on the US today, where we have huge political and economic developments.

Let's start with the economy, as we've got the latest US jobs data a day early because of the July 4th holiday tomorrow, and it was quite a surprise. Not only did non-farm payrolls increase by 147,000, which was more than the expected 110,000 jobs added, but also unemployment fell to 4.1%, confounding expectations of an increase to 4.3%. The data for May was also revised up to 141,000. Wall Street cheered the report.

It comes after private sector employment in the US saw a notable contraction with ADP, reporting a loss of 33,000 jobs for June, marking the first decline since March. So the showdown between a cautious Fed and President Trump calling for rate cuts is set to continue. Another thing Donald Trump would like to see happen is the passage of his signature tax legislation known as the One Big Beautiful Bill. And he may just get his wish in time for Independence Day celebrations.

After an initial rebellion, Republican holdouts in the House fell in line and moved the bill to the final vote. However, the debate was still ongoing, despite the early hours in Washington, so it's hard to say when exactly the vote might happen. It's possible the lawmakers have already had their final say by the time you're watching this. There's also political drama in the UK, where government bonds first tanked and then rallied following uncertainty around the future of Chancellor Rachel Reeves.

She was seen crying in Parliament yesterday, and the Prime Minister was accused of failing to back her. Following the GILT's meltdown, Keir Starmer attempted to quell doubts about Reeves' future in the post, which reassured investors, at least for now. Moving to continental Europe. Minutes from June's meeting of the central bank show signs of caution and unease about the trade situation. The ECB cut the interest rate for an eighth consecutive time, but warned a strong euro and high tariffs will hurt exporters.

As inflation is currently bang on the ECB's target of 2%, markets anticipate only one more rate cut for the remainder of 2025. So far so good, though, for the manufacturing and services sectors in the Eurozone. Composite PMI rose to 50.6 in June from May's reading of 49.3, indicating modest growth driven by the manufacturing and services sectors.

On a more sour note, France continues to lag with a contraction at 49.2 for its composite PMI, despite improved business confidence levels. Meanwhile, Japan reported an upward revision in its services PMI to 51.7. Let's also talk briefly about crypto. There's finally something to cheer for altcoin holders, with many outpacing Bitcoin's gains today as it closes in on its all-time high.

The first SolanaSpot ETF that allows staking has started trading in the US, but the SEC halted the conversion of Grayscale's multi-token fund into an ETF a day after approval. That's it for today. Plenty of content to watch over the next two days on Real Vision. And I'll be here tomorrow as well, despite the holiday, to give you the latest global market headlines. See you tomorrow!

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