Morning Bid: The euro's big beautiful moment
This would not be obvious when looking through the lens of the stock market, given the S&P 500 is at record highs, in dollar terms at least. When priced in other currencies, it is a long way off.
Europe's STOXX 600 has risen 7% so far this year, compared with the S&P's 5% rise. On an equal-weighted basis, the divergence is even more marked. Wall Street's Magnificent 7 are back in vogue, but not quite riding to the rescue. The equal-weighted S&P is up 3.3% versus a near-10% gain in the STOXX equivalent.
That said, in spite of the chaos from Trump's on-again off-again tariffs, the heightened uncertainty stemming from the Middle East and the deficit-busting "One Big Beautiful Bill" that is up for debate in the Senate right now, investors aren't exactly ditching U.S. assets en masse.
"Anywhere But The USA" may sound catchy as an investment theme, but it has taken more than that to lure capital into Europe.
European governments, spearheaded by Germany, have pledged to unleash a one trillion euro ($1.17 trillion) spending bazooka, much of which will be concentrated on defence and infrastructure, as they attempt to address years of riding on the coattails of Washington for security, and of shortfalls in spending on basics at home.
The July 9 deadline for a trade deal is less than two weeks away - and with Trump saying he will impose 50% tariffs on all EU goods without a deal - investors are moving their money.
Data from LSEG's Lipper Funds show that more than $100 billion has flowed into European equity funds so far this year - up threefold from the same period last year - while outflows from the U.S. more than doubled to nearly $87 billion.
"All that is an indication that at least market forces, investors, those who move real money around, actually see value and have confidence in Europe," European Central Bank President Christine Lagarde said earlier this month.
She said now is the time for Europe to take its destiny into its own hands, and that this is the euro's "moment".
Chart of the day
With the U.S. Independence Day holiday on Friday, the June employment report lands on Thursday. A Reuters poll shows economists expect to see a rise of 129,000, slightly below May's 139,000 increase.
Evidence of the impact on the economy from Trump's tariffs and their potentially inflationary effect, along with the mass layoffs among government employees and the likelihood of big cuts to a raft of welfare benefits is starting to materialise in other data points.
So far, the monthly non-farm payrolls report has not been one of them. May's number marked the fifth upside surprise in the past 12 months, and the ninth reading below the 200,000 mark over the past year. Layoffs are historically low, but hiring is not exactly booming.
The most recent weekly jobless claims numbers showed the number of Americans filing new applications for jobless benefits fell, but work opportunities are becoming scarce as businesses are reluctant to hire while things such as import tariffs are in flux.
Today's events to watch
* Federal Reserve Chair Jerome Powell speaks at the European Central Bank Forum on Central Banking 2025 in Sintra, Portugal
* Federal Reserve Bank of Atlanta President Raphael Bostic speaks on the economic outlook and monetary policy in London
* Federal Reserve Bank of Chicago President Austan Goolsbee speaks at the Aspen Ideas Festival 2025
* June Chicago PMI
* Three- and six-month Treasury bill auctions
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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($1 = 0.8533 euros)
(By Amanda Cooper; Editing by Anna Szymanski)
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