Oh yes! First NFP number of the year, the payrolls data is expected to show a slowdown in hiring. Median estimates for the figures forecast that 165,000 jobs were added to the economy in December. The unemployment rate is forecast to hold steady at 4.2% and average hourly earnings growth is seen cooling a touch from a month earlier. The jobs data will offer a litmus test for the market’s hawkish Fed pricing, we are expecting a volatile US Session.
As for the UK, the FTSE 250 fell to five-month lows this week while sterling weakened, and UK Gilt yields pushed higher as investors reacted to a global selloff in government bonds. In Q1 and Q2 2024, UK real GDP expanded by 0.7% q/q and 0.6%q/q respectively. This period of better-than-expected activity coincided with a general election campaign by the Labour party which brought promises of investment and higher levels of economic activity in the UK. The change of government on July 4 last year not only brought the suggestion of better productivity and economic growth but also expectations of a period of political stability. In the first 9 months of last year, the pound was the best performing G10 currency in the year to date. At that point it was ahead of the USD by 5%, with further support for GBP coming from the view that the BoE would cut rates at a cautious pace. That optimism started to dwindle in October. If the Labour government’s honeymoon period had not already ended in the eyes of some voters before the October 30 budget, according to business surveys it ended abruptly with the announcement of a hike in employers’ national insurance contributions.
GBP opens at 1.2290 and we have little enthusiasm to be long GBP. In overnight activity Bitcoin rose to $93,906.37, Ether rose 1.8% to $3,267.24, Spot gold rose 0.4%, West Texas Intermediate crude rose 0.5% to $74.29 a barrel. It's all about the NFP numbers today....