US Jobs Data Expected to Show Strong Rebound from June's Slowdown

The US July Non-Farm Payrolls are expected to show a significant improvement from June's gains, rising by 120k overall and 110k in the private sector. This is largely explained by a recovery in leisure and hospitality sectors. However, unemployment is expected to rise to 4.3% from 4.2%, reversing the decline seen in June.

The average hourly earnings are expected to show an in-line with trend 0.3% rise. In contrast, June's outcome saw a significant slowing from the preceding months, attributed to a 61k decline in leisure and hospitality. A modest rebound of 25k is anticipated for July, with private payrolls excluding leisure and hospitality rising by 85k.

Canada's employment is expected to increase by 20k in July, a third straight gain, but below May's 87.8k which was correcting preceding weakness. The unemployment rate is expected to match June's 6.5%, with the economy having returned to growth in Q2 and likely started Q3 with momentum.

The USD/JPY currency pair remains directionless after a recent drop, with looming joint intervention making it difficult to predict a strong rally. However, the Japanese Yen may not gain strength due to soft support from the Bank of Japan.