- US December non-farm payrolls +199K vs +400K expected
- Canada December employment change 54.7K vs 24.5K estimate
- US Nov consumer credit outstanding +39.99B vs +$19.5B expected
- Baker Hughes rig count sees oil rigs up to 481 from 480 last week
- Biden: Car prices are too high
- Fed's Daly: Inflation is not as temporary as we once thought because covid isn't either
Markets:
- Gold up $5 to $1794
- Bitcoin down $1172 to $41,949
- US 10-year yield up 3 bps to 1.767% -- highest since 2019
- S&P 500 down 10 points to 4686
- CAD leads, USD lags (I haven't written that often in the past year)
There's perhaps a story to tell in Friday trading if you're so inclined: US job gains were weak and so was the US dollar.
Unfortunately, that's not how it worked. While the US jobs headline was soft, the unemployment rate dropped to 3.9% from 4.2 and -- most importantly -- wage growth surprised to the upside.
The clear read-through on that was in the bond market, where rates finished up 1-4 bps in a steepener. Earlier, they had been even higher with 10-year yields running after breaking last-years top of 1.777%.
The shorter-term rates market also pushed the odds of a March hike to 90% from 80% pre-data and we're now pricing in nearly 4 hikes this year.
Equities flirted with rate-hike fears and the Nasdaq tumbled 1.6% at one point. It later halved that drop but the sluggishness in the pandemic names continued.
The FX market didn't do what you would expect with the price action elsewhere. Normally, you'd see the dollar climb against commodity currencies in a risk-off situation like today. Or if climb against the yen if it was risk positive. Instead, it fell against everything shortly after the jobs report.
EUR/USD flows were the likely culprit and what could be behind that is German bund yields nearing 0%. That's pulling funds back to Europe and will be a critical level to watch next week.
The USD losses were generally similar. Cable continued its march, rising to 1.3596 before offers at the figure held up the rally. On Wednesday, 1.3599 capped the gains so that will be a spot to watch early next week.
USD/CAD was an interesting trade as the Canadian jobs report beat the consensus again. Only in Canada, wage growth was on the softer side. Oil also reversed in US trading, falling more than $1 from the high. Again, you might expect some late-day loonie selling but it was the opposite as the USD selling kept the pair pinned near the low of 1.2633. There's a head-and-shoulders top formed in USD/CAD with the neckline just below.
Crypto was also in the spotlight as bitcoin briefly fell through $41,000 in a run through the Dec 4 spike low. That put it at the worst levels since September in a 2.7% fall. Ethereum fared much worse, falling 6.2%.
