Initial Jobless Claims for the week ending Dec 30th were 202k, below the 216k estimate and the lowest weekly reading since October 2023. And the ADP Employment Change gauge for December was 164k, above the 125k estimate. The combination of lower jobless claims and higher than expected new jobs added are complimentary data points and confirm the continued strength of the U.S. labor market.
Today’s labor data sets the stage for tomorrow’s Change in Nonfarm Payrolls for December, the key employment reading for the U.S. (estimated +172k). Today’s data is already lifting U.S. Treasury yields as traders scale back bets for an aggressive series of Fed rate cuts this year. Yields gains are concentrated in the 5 to 15-year tenors.
Higher yields are translating into a stronger dollar today, lifting the U.S. Dollar Index to 102.481 and its 5th consecutive daily gain. Today’s primary gains are +0.96% vs. JPY, +0.34% vs. AUD, +0.29% vs. CHF, and +0.25% vs. MXN. The dollar has retreated slightly against the EUR (-0.18%), and GBP (-0.02%), and is unchanged vs. CAD.
The major global equity index futures are evenly mixed between minor gains and losses.
Oil prices are holding yesterday’s gains (+3.30%) following attacks in Lebanon and Iran against Hamas and Revolutionary Guard leadership, potentially widening the conflict between Israel and Hamas and disrupting global oil supplies.
