It’s Unemployment Day and the US and Canadian employment reports are released.

• Economists forecast an increase of 160,000 payroll jobs in December, and the unemployment rate is expected to remain at 4.2%.
• Growth in average hourly earnings is forecast to cool to 0.3% from 0.4% previously.
• ADP came in at 122,000, which was weaker than expected, but JOLT jobs rose to 8,077 million versus the estimate of 7,773 million (stronger). Initial unemployment claims were lower (stronger). So there are mixed signals.

in Canada:

• The unemployment rate is expected to be 6.9% compared to 6.8% last month
• Employment is expected to change to 25.0K from 50.5K last month
• Last month, full-time employment increased by 54.2 thousand. Part Time fell -3.6K

Fed funds futures rule out a 25 basis point rate cut later this month with a ~93% chance the Fed will keep rates unchanged. The first full rate cut is just in June with ~42 basis points total for the year (the Fed saw 2 cuts at its point in December). Oscillations, if any, in prices will be what will dictate broader market sentiment before we reach the weekend.

Ahead of the release, the USD is up and down with a modest peak to peak. The screenshot below shows the key levels in play during the report. Be aware. Be prepared.

The Central Bank today says:

President of the Federal Reserve St. Louisa Alberto Musalem called for caution regarding further interest rate cuts, highlighting the challenges posed by the evolving economic outlook. In an interview with The Wall Street JournalMusalem noted that last month’s decision to cut interest rates was a “close call” and stressed that the current economic landscape is significantly different from when the Fed began cutting rates last year. He also expressed concern about the growing risk that inflation could be stuck between 2.5% and 3%, hampering efforts to meet the Fed’s long-term targets.

The Bank of Japan (BoJ) is reportedly considering its rate decision for January, according to Bloomberg sources. The central bank is said to be considering raising its core inflation forecast for fiscal years 2024 and 2025 and potentially adjusting inflation expectations amid yen fluctuations. However, the decision to increase the rates has not been made. The BoJ intends to wait until the last possible moment before making any decisions regarding rate hikes.

US stock futures imply lower levels ahead of the data:

• Dow -42 points
• S&P -10.5 points
• Nasdaq -39.22 points

In the US debt market, the video shows:

• 2-year 4.289%, +2.7 basis points.
• 5-year 4.472%, +2.3 basis points.
• 10 years 4.695%, +1.5 basis points
• 30 years 4.928%, +0.9 basis points

in other markets:

• crude oil traded sharply higher at $2.46 and $76.40
• gold is trading up six dollars or 0.25% at $2,675
• Bitcoin recovers by $2400-$94,945