Potential postal disruption. Prepare for possible mail delays due to Canada Post labour negotiations. You can use our mobile app or log in to my Sun Life to submit claims and/or check on your investments.
A review of the week's top global economic and capital markets news.
For the week ending 03 July 2025
As of midday Thursday, global equities moved further into record territory amid solid U.S. economic data, the likely passage of the U.S. budget reconciliation bill and some movement on the trade front. The yield on the U.S. 10-year Treasury note rose 8 basis points from last Friday to 4.34% as odds of a near-term Fed rate cut diminished. The price of a barrel of West Texas Intermediate crude oil rose US$1 to US$66.60. Volatility, as measured by futures contracts on the Cboe Volatility Index (VIX), declined to 18.1 from 18.7.
MACRO NEWS
U.S. payrolls handily beat expectations
Economists had expected an uptick in the unemployment rate and a slower pace of job gains, but the U.S. economy added more jobs than expected, gaining 147,000 in June, with upward revisions of 16,000 jobs over the prior two months, breaking a streak of downward revisions. The unemployment rate fell to 4.1%, the lowest since February, against expectations for a rise to 4.3%. Average hourly earnings were muted, gaining 3.7% year over year, down from 3.8% in May, and the average workweek declined 0.1% to 32.1 hours. Odds of Fed rate cuts fell immediately after the report to fewer than two cuts through year end from 2.6 cuts at Wednesday’s close.
Big Beautiful Bill looks headed for passage
Having passed in the Senate on Tuesday, the U.S. budget reconciliation bill looks set to pass in the House of Representatives once House Minority leader Hakeem Jeffries finishes a marathon speech delaying the final vote. The legislation overcame a procedural hurdle early Thursday morning, paving the way for passage. Among the market-friendly provisions included in the bill are 100% bonus depreciation of domestic capital expenditures on manufacturing equipment and structures and the permanent, immediate expensing of research and development.
Trump announces trade deal with Vietnam
U.S. President Donald Trump announced on Wednesday that a trade agreement with Vietnam has been reached. Exports to the U.S. will be subject to a 20% tariff while goods transshipped from China will face 40% levies. The pact is seen as a potential template for other countries in the region with tariffs above the 10% baseline rate but below the high Liberation Day levels. Shoe, apparel and retail companies with exposure to imports from Vietnam rallied on the news. Early in the week, Trump threatened to impose high tariffs on Japan due to Japan’s refusal to import rice from the U.S., saying he doubts a deal can be reached. The president said Monday that he doesn’t think he’ll need to extend trade talks past July 9. European Commission President Ursula von der Leyen said Thursday that the European Union is aiming for an agreement in principle with the U.S. on trade. Also on Thursday, U.S. Treasury Secretary Scott Bessent warned countries to not drag out talks, saying tariffs could revert to April 2 levels. Bessent meets with negotiators from the EU on Thursday.
Powell: Can’t rule out July cut
Speaking at the annual ECB Forum on Central Banking in Sintra, Portugal on Tuesday, U.S. Federal Reserve Chair Jerome Powell repeated that the central bank remains in wait-and-see mode as it anticipates an uptick in tariff-induced inflation this summer. However, he said he “can’t say” that it would be too soon to consider a rate cut in July. Powell said that he wouldn’t take any meeting off the table since the Fed is data-dependent. However, Thursday’s stronger-than-expected U.S. labour data will likely keep the Fed sidelined through the summer.
QUICK HITS
Past performance is no guarantee of future results.
Sources: MFS research, Wall Street Journal, Financial Times, Reuters, Bloomberg News, FactSet Research.
This commentary was first published in the United States by MFS and is distributed in Canada by SLGI Asset Management Inc., with permission.
MFS Investment Management or MFS refers to MFS Investment Management Canada Limited and MFS Institutional Advisors, Inc. MFS Investment Management Canada Limited is the sub-advisor to the Sun Life MFS Funds; SLGI Asset Management Inc. is the registered portfolio manager. MFS Investment Management Canada Limited and MFS Institutional Advisors, Inc. have entered into a sub-advisory agreement.
The views expressed in this commentary are those of the authors and are subject to change at any time. Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any mutual funds managed by SLGI Asset Management Inc. or sub-advised by MFS. These views are subject to change and are not to be considered as investment advice nor should they be considered a recommendation to buy or sell.
Information presented has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to its timeliness or accuracy. This commentary may contain forward-looking statements about the economy and/or markets; their future performance, strategies or prospects. Forward-looking statements are not guarantees of future performance, are speculative in nature and cannot be relied upon.
