The National Bank of Serbia published its review of global financial market developments for June 29 to July 3, concluding that weaker-than-expected US labor data reduced expectations of a near-term Federal Reserve rate increase and helped lift the euro 0.42% against the USD to 1.1438. The review also points to higher US and German government bond yields on the longer end of the curve, while euro area inflation slowed more than expected, easing pressure for further European Central Bank tightening. In the United States, June nonfarm payrolls rose by 57,000 against expectations of 113,000, while unemployment fell to 4.2% from 4.3% as participation declined. Over the week, the US 2-year Treasury yield rose 4.5 basis points to 4.14% and the 10-year yield rose 11.4 basis points to 4.49%. In the euro area, June inflation slowed to 2.8% year over year from 3.2%, below the 3.0% expectation, and German harmonized inflation came in at 2.4%, also below forecast. The review also notes that the People's Bank of China expanded its monetary policy operating framework by introducing overnight reverse repo operations, conducting auctions worth CNY 300 billion and CNY 600 billion, while Bloomberg reported both were priced at 1.25%, or 15 basis points below the one-week reverse repo rate. Among commodities, gold rose 2.2% to USD 4,174.94 per ounce and Brent crude edged up 0.18% to USD 72.12 per barrel.
National Bank of Serbia2026-07-07
National Bank of Serbia publishes weekly market review highlighting weaker US payrolls firmer euro and slower euro area inflation
The National Bank of Serbia's latest market review says weaker US June payrolls data supported the euro, which ended the period at USD 1.1438, and reduced expectations of near-term Federal Reserve tightening. It also highlights slower euro area inflation at 2.8%, higher long-dated US and German bond yields, and the People's Bank of China's introduction of overnight reverse repo operations.