Markets Pause as Oil Stabilises

• Markets remained in a holding pattern as investors awaited confirmation of a shipping agreement between Iran and Oman to reopen the Strait of Hormuz. Brent crude held below US$80/bbl, with easing geopolitical risks helping keep inflation expectations contained.
• US services activity remained resilient, with the ISM Services Index holding at 54.1 in July as business activity and new orders strengthened. However, softer ADP employment growth of 44k (vs 65k expected) points to some downside risk ahead of Friday’s payrolls report.
• China’s services PMI slowed sharply to 50.8 from 53.6, signalling a broader loss of economic momentum. The weaker data suggests domestic demand remains subdued, reinforcing concerns around China’s growth outlook.
• Attention now turns to Australia’s June Goods Trade Balance, followed by US jobless claims overnight. Friday’s US non-farm payrolls are expected to show around 83,000 new jobs and unemployment edging up to 4.3%, providing the next key test of labour market resilience.