Key focus and themes

Research evidence excerpt

Key focus and themes

Nomura | Key focus and themes 3 July 2026

downtrend. Our economics team highlighted that even though the job report was dovish

on the margin and that the slowing NFP should ease concerns over cyclical overheating,

underlying employment growth remains solid. This suggests that the US labor market data

may have to deteriorate more sharply to have a bigger impact on Fed policy rate

expectations (end-2026 Fed funds pricing in +30bp) and/or upcoming inflation releases

need to undershoot (June US CPI release out on 14 July; consensus estimate for core

CPI currently at +0.3% m-o-m).

That said, our medium-term view for the USD remains towards weakness for several

reasons including:

• Continued evidence of a desire from investors/reserve managers to reduce USD

exposure. The latest is an OMFIF survey of 90 official institutions (Bloomberg , 30

June), showing that over the next 1-2 years, a net 3% of those surveyed planned to

reduce their USD exposure (12% increase; 15% reduce; 74% maintain). The main

beneficiary was EUR with a net ~17% of those surveyed planning to increase their

EUR exposure in 1-2 years.

• There remain the risk of a slowdown in inflows into US equities, with growing

concerns over the sustainability of hyperscaler capex (overcapacity fears) and some

selling pressure in tech stocks/semiconductor indices (SOX). This development could

lead to some USD weakness in G10, but most of Asia/EM could see equity outflow

risk and some relative FX underperformance.

• Fed independence concerns have also not disappeared despite the US Supreme

Court ruling that Trump cannot immediately fire Fed Governor Cook (Bloomberg , 29

June). Bloomberg (3 July) also reported Trump and allies were exploring other ways to