Liquid Insight: June jobs report: it's getting hot in here

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Liquid Insight: June jobs report: it's getting hot in here

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Liquid Insight

June jobs report: it's getting hot in here

Key takeaways 01 July 2026

Rates and Currencies Research• We expect another solid payrolls print (+110k, private +120k) with the unemployment

Global rate holding at 4.3%

• Solid June payrolls should reinforce our 2026 hiking call and support short 2y, 2y10y

flattener, long USD views GlobalMLI (UK)Rates & Currencies Research

• Asymmetric market response given positioning: larger UST rally/ USD depreciation on Meghan Swiber, CFA

miss vs selloff/ appreciation on beat Rates Strategist BofAS

meghan.swiber@bofa.com

By M. Swiber, S. Mishra, A. Cohen, and E. Xiao ShrutiUS EconomistMishra

Exhibit 1: Real policy rate has eased over 100bps despite unemployment rate unchanged from BofASsmishra44@bofa.com

middle of last year

Alex Cohen, CFA

Real fed funds = midpoint of Fed’s target range less core YoY PCE (PPTS) FX Strategist

BofAS

Real fed funds Unemployment rate (RHS, reversed) 3.8 alex.cohen2@bofa.com

4 Eleanor Xiao

Rates Strategist

1.5 4.2 BofAS

eleanor.xiao@bofa.com

4.4 1 Oliver Levingston

4.6 FX and Rates Strategist

Merrill Lynch (Hong Kong) 0.5 oliver.levingston@bofa.com 4.8

0 5 See Team Page for List of Analysts

Jan '25 Apr '25 Jul '25 Oct '25 Jan '26 Apr '26

Source: BofA Global Research, Bloomberg Liquid Insight

BofA GLOBAL RESEARCH Recent Publications

Time to hit undo?

Real policy rates have eased >100bps since the middle of last year while unemployment

rate is on net unchanged. We expect Fed to reverse last year’s 75bps of cuts starting in 30-Jun-26 Hedging flows and FX: when

September, but recent strong labor & inflation data put July FOMC meeting in focus. equity rallies eclipse FX-

fundamentals