The week's main event was the monthly US jobs report. Job creation came in at 57,000, well below the 114,000 expected, while revisions to prior months were also biased to the downside. Still, the unemployment rate fell to 4.2%, wages are still up 3.5% year over year, and layoffs remain historically low. In short, the labor market is cooling without materially deteriorating.

This "not too hot, not too cold" reading was well received by markets. Investors see an economy strong enough to avoid recession, yet moderate enough to ease pressure on the Fed. Bond yields edged lower, while the dollar pulled back against the major currencies.

The other key takeaway of the week came from Kevin Warsh. At the Sintra forum, the Fed chairman declined to offer any indication on the future path of rates. More interestingly, he said markets should guide the central bank themselves, rather than the other way around. It is a change in tone compared with the Powell years, and it is closer to Alan Greenspan's philosophy: watch the signals sent by markets rather than trying to steer them.

On the macroeconomic front, indicators remain robust. Job openings remain high, layoffs are low, consumer spending continues to rise, and business investment remains supported. To be sure, the Atlanta Fed's GDPNow estimate was cut from 3.1% to 1.2%, but that revision largely reflects a temporary widening of the trade deficit, not weakening domestic demand. Real consumption is still rising by about 2%, while investment spending remains dynamic thanks to the artificial intelligence cycle.

Equity markets, however, are continuing their internal rotation. Big technology names are taking a breather after their spectacular surge, as flows are redeploying toward financials, health care, small caps, and several international markets. This move is confirmed by a particularly reassuring indicator: the NYSE advance-decline line is posting new all-time highs, a sign that market participation continues to broaden. Historically, this type of setup is more consistent with a consolidation within a bull market than with the onset of a true bear market.

The dominant scenario therefore remains a soft landing. Oil continues to normalize, inflation pressures are starting to ease, the Fed is regaining flexibility, and US growth remains solid enough to support corporate earnings. In the near term, sector rotations should nevertheless remain the main driver of equity performance.

Technically, the dollar index (DXY) remains well supported above 100.20, pointing to a continued move higher toward 102.70/85. In parallel, EURUSD remains under bearish pressure as long as 1.1520 is not cleared, with a target still set at 1.1180/30. Elsewhere, note the continued slide of the Japanese yen against the dollar, with a break above 160.40.