ETO Markets Buzz | Weak US Jobs Reduce Rate Hike Risk as Silver Gains Support

Global Market Overview | July 2026

According to ETO Markets analysis, global markets are reassessing the outlook for US interest rates as employment and manufacturing data show clearer signs of economic moderation. The July 4 holiday produced quieter trading conditions, but the latest releases strengthened the view that the Federal Reserve may be approaching the end of its tightening cycle.

US Non-Farm Payrolls increased by only 57,000 in June, well below expectations of 110,000. Factory orders fell 1.3% month on month, while the ISM Manufacturing PMI eased to 53.3 from 54.0. At the same time, increased tanker flows through the Strait of Hormuz reduced supply concerns and pushed oil prices lower. Precious metals remained supported as expectations for further rate increases weakened.

US Employment Loses Momentum

The June employment report showed the US labour market cooling faster than expected. Payroll growth slowed to 57,000 from a downwardly revised 129,000 in May, marking the third consecutive monthly decline and the weakest increase in four months.

Professional and business services added 36,000 jobs, social assistance gained 25,000 and healthcare added 22,000. However, leisure and hospitality employment fell by 61,000, while most other major sectors showed little change.

April and May payrolls were also revised down by a combined 74,000, indicating that labour conditions had been weaker than previously reported. The trend suggests higher rates and tighter financial conditions are increasingly affecting hiring.

Factory Demand Also Softens

US factory orders fell 1.3% in May. Although the decline was better than the expected 1.8% contraction, the underlying composition pointed to weaker business investment.

Durable goods orders dropped 4.5%, led by a 14% decline in transportation equipment and a 51.8% fall in non-defence aircraft and parts. Orders excluding transportation rose 1.9%, supported by machinery, fabricated metals and technology-related industries, but the broader manufacturing trend continued to lose momentum.

Combined with weaker employment and softer sentiment, the data indicate that the US economy is cooling more quickly. ETO Markets expects the Federal Reserve to avoid further rate increases over the next six months, with the pause potentially extending for longer if inflation continues to moderate.

Hormuz Flows Ease Oil Pressure

The restoration of tanker traffic through the Strait of Hormuz has reduced concerns over global energy supply disruption. This has helped unwind part of the geopolitical risk premium in crude oil and eased some inflation pressure.

However, longer-dated bond yields remain elevated, showing that investors are still cautious about inflation and government debt. Oil markets also remain exposed to renewed Middle East disruption and future OPEC production decisions, meaning price volatility may persist even as physical flows improve.

Silver Gains Dual Support

Silver remains supported by both monetary and industrial demand. Weaker US economic data and lower expectations for further rate increases reduce the opportunity cost of holding precious metals, while slowing growth increases demand for defensive assets.

Industrial demand also remains structurally strong. Solar energy, electrification, AI infrastructure and power grid investment continue to increase silver consumption. Strong Chinese imports and persistent supply deficits further reinforce the medium-term outlook.

Silver also remains relatively undervalued compared with gold, with the gold-to-silver ratio still above long-term averages. This creates scope for silver to outperform if precious-metal investment demand continues to improve.

Outlook

Looking ahead, ETO Markets expects the Federal Reserve meeting minutes, US services activity, housing and trade data, Chinas inflation figures, European policy accounts, OPEC decisions and the Reserve Bank of New Zealand meeting to shape market expectations.

In this environment, ETO Markets continues to emphasise close monitoring of labour-market revisions, inflation signals, actual oil flows through Hormuz and precious-metal demand. Slower US growth reduces the probability of further tightening, while silver remains supported by easing rate expectations, structural industrial demand and constrained supply.

Disclaimer

The information contained herein is for general reference only and does not constitute investment advice, a solicitation, or an offer to buy or sell any financial products.

ETO Markets does not guarantee the accuracy, completeness, or timeliness of the information and shall not be liable for any losses incurred from reliance on such content.