Market Roundup
• US Nov Non-Farm Payrolls, 228k, 200k forecast, 261k previous, 244k revised.
• US Nov Private Payrolls 221k, 190k forecast, 252k previous, 247k revised.
• US Nov Unemployment Rate, 4.1%, 4.1% forecast, 4.1% previous.
• US Nov Average Earnings MM, 0.2%, 0.3% forecast, 0.0% previous, -0.1% revised.
• US Nov Average Earnings YY, 2.5%, 2.4% previous.
• US Nov Average Workweek Hrs, 34.5, 34.4 forecast, 34.4 previous.
• US Dec U Mich. Sentiment Prelim 96.8, 99.0 forecast, 98.5 previous.
• Trump signs temporary spending bill as budget talks intensify.
• Britain and EU clinch Brexit "breakthrough" with move to trade talks.
• German SPD says outcome uncertain for impending government talks.
• An unexpected decline in German exports narrows trade surplus.
• UK industry surges, construction and trade muddy outlook.
• EU, Japan conclude world's largest free trade agreement.
• Canada Nov House Starts Annualized, 252.2k, 215.0k forecast, 222.8k previous, 222.7k revised.
• Canada Q3 Capacity Utilization, 85.0%, 85.0% forecast, 85.0% previous, 84.3% revised.
Looking Ahead - Economic Data (GMT)
• 9 Dec 01:30 China Nov PPI YY, 5.9% forecast, 8.9% previous.
• 9 Dec 01:30 China Nov CPI YY, 1.8% forecast, 1.9% previous.
• 9 Dec 01:30 China Nov CPI MM, 0.1% forecast, 0.1% previous.
• 10 Dec 21:45 New Zealand Nov Electronic Card Retail Sales mth, 0.3% previous.
• 10 Dec 21:45 New Zealand Nov Electronic Card Retail Sales YY, 1.2% previous.
• 10 Dec 23:50 Japan Q4 Business Survey Index, 9.4% previous.
Looking Ahead - Events, Other Releases (GMT)
• No major economic events scheduled
Currency Summaries
EUR/USD is likely to find support at 1.1710 levels and currently trading at 1.1764 levels. The pair has made session high at 1.1770 and hit lows at 1.1728 levels. The euro edged lower against the U.S. dollar on Friday as greenback rose after data showed the U.S. economy created more jobs than expected last month, but gains were capped by wages data that analysts said were disappointing. That could weigh on the pace of interest rate rises next year as the Federal Reserve grapples with sluggish wages that reflect persistently low inflation. The dollar came off three-week highs after the report, while the euro, although still down on the day, recouped some of those losses. U.S. non-farm payrolls rose by 228,000 jobs in November amid broad gains in hiring as distortions from recent hurricanes faded. Economists polled by Reuters had forecast payrolls rising by 200,000 jobs last month. But analysts said average hourly earnings were lower than expected. Average hourly earnings rose five cents or 0.2 percent in November, but economists expected a 0.3 percent rise. The annual increase in wages was also weaker than forecast: the November figure came in at 2.5 percent versus a 2.7 percent expectation. The dollar index rose 0.11 percent.The euro reduced losses versus the dollar, but still traded weaker at $1.1764, down just 0.1 percent.
GBP/USD is supported in the range of 1.3317 levels and currently trading at 1.3394 levels. It reached session high at 1.3413 and dropped to session low at 1.3352 levels. Sterling dipped against the dollar on Friday as investors booked profits after a sharp rally in recent days. Britain and the European Union reached a divorce deal on Friday that paves the way for arduous talks on future trade ties, easing immediate pressure on Prime Minister Theresa May and raising hopes of an orderly Brexit. That sent sterling rallying to as high as $1.3521 earlier in the day, and to a six-month high against the euro, on investor relief that an EU summit next week will clear the talks to move forward to trade and transition arrangements. But with Britain's economy still facing headwinds, traders were quick to take profits on sterling, pushing it down the day. Sterling dipped to as low as $1.3356, down almost 0.9 percent on the day. Against the euro, it slipped 0.8 percent to 88.06 pence, having earlier strengthened to 86.90 pence. Having earlier hit a seven-month high, the Bank of England's trade-weighted sterling index slipped 0.9 percent.
USD/CAD is supported at 1.2800 levels and is trading at 1.2867 levels. It has made session high at 1.2875 and lows at 1.2817 levels. The Canadian dollar weakened against the greenback on Friday as greenback outperformed key currency rivals after upbeat economic data. U.S. jobs report that showed the economy added 228,000 jobs last month but average hourly earnings failed to meet expectations. Average hourly earnings rose 0.2 percent in November after dipping 0.1 percent the prior month, but were still below the estimated 0.3 percent rise. Prices of oil, one of Canada's major exports, got a boost from rising Chinese crude demand and threats of a strike in Africa's largest oil exporter. Canada's capacity utilization rose to 85.0 percent in the third quarter, marking a 10-year high, as gains in the construction sector offset lower extraction volumes in the oil and gas industry. Separate data showed that Canadian housing starts rose sharply in November. The seasonally adjusted annual rate of starts climbed to 252,184 from October's downwardly revised 222,695. The Canadian dollar was last trading at C$1.2866 to the greenback, down 0.1 percent. The currency's strongest level of the session was C$1.2805, while it matched Thursday's low of C$1.2868, which was its weakest since Dec. 1.
USD/JPY is supported around 112.62 levels and currently trading at 113.47 levels. It peaked to hit session high at 113.57 and made session lows at 113.09 levels. The U.S. dollar strengthened against the Japanese yen on Friday as greenback rose and was on pace for its fifth day of gains after data showed robust U.S. job growth. U.S. job growth increased at a strong clip in November, painting a portrait of a healthy economy that analysts say does not require the kind of fiscal stimulus that President Donald Trump is proposing, even though wage gains remain moderate. Nonfarm payrolls rose by 228,000 jobs last month amid broad gains in hiring as the distortions from the recent hurricanes faded, Labor Department data showed on Friday. The government revised data for October to show the economy adding 244,000 jobs instead of the previously reported 261,000 positions. November’s report was the first clean reading since the storms, which also impacted September's employment data. Following the data, the dollar initially pared gains against the yen but recovered to last trade at 113.47 yen, up 0.2 percent on the day.
Equities Recap
European stocks rallied to a week's high on Friday as Britain and the European Union announced a breakthrough in Brexit negotiations and new global banking regulations appeared kinder to European banks than had been expected.
UK's benchmark FTSE 100 closed up by 1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.80 percent, Germany's Dax ended up by 0.9 percent, France’s CAC finished the day up by 0.4 percent.
U.S. stocks ended higher on Friday, buoyed by solid payrolls report that locked in expectations for an interest rate hike from the U.S. Federal Reserve next week and raised optimism about economic prospects in 2018.
Dow Jones closed up by 0. 48 percent, S&P 500 ended up 0. 0.54 percent, Nasdaq finished the day up by 0.38 percent.
Treasuries Recap
U.S. Treasury yields were little changed on Friday after seesawing following the release of a U.S. jobs report that showed the economy added 228,000 jobs last month but average hourly earnings failed to meet expectations.
Benchmark 10-year notes were down 1/32 in price to yield 2.38 percent. Yields initially edged down after the jobs report headline hit screens, but retraced that move shortly thereafter as traders unpacked the report. The 2-year note was little changed in price, yielding 1.80 percent.
Commodities Recap
Oil prices rose more than 1 percent on Friday, helped by rising Chinese crude demand and threats of a strike in Africa's largest oil exporter.
Brent crude was up 99 cents or 1.6 percent at $63.25 a barrel, but heading for a weekly slide of 0.9 percent.
U.S. West Texas Intermediate (WTI) crude was at $57.25 a barrel, up 56 cents or 1 percent on the day and on track for a 1.9 percent loss on the week.
Gold prices hovered above a four-month low on Friday and were on track for their biggest weekly fall since May after progress on U.S. tax reform fueled optimism about the U.S. economy and boosted the dollar.
Spot gold was up 0.1 percent at $1,247.81 an ounce by 2:34 p.m. EST (1934 GMT), near Thursday's low of $1,243.71, the weakest since July 26. It has fallen 2.6 percent so far this week, its third consecutive weekly fall and the biggest since early May.U.S. gold futures settled down 0.4 percent at $1,248.40.
