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Unraveling the payrolls data details was irrelevant for the algos, a plunge in the unemployment rate appears to have been the trigger for an instantaneous fat-finger VIX slam, which managed to spark a brief upward momentum in stocks, but that did not last…
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While the headline November payrolls print came in almost on top of expectations at 178K, vs consensus of 180K there were two big surprises in today’s report, one being the unemployment rate which plunged from 4.9% to 4.6%, well below the 4.9% expected, but the biggest negative surprise was that the Average hourly earnings in November dropped by 0.1%, far below last month’s 0.4% rise, and below the 0.2% expected with the annual increase growing by a far more modest 2.5% than the 2.8% expected.
The change in total nonfarm payroll employment for September was revised up from +191,000 to +208,000, but the change for October was revised down from +161,000 to +142,000. With these revisions, employment gains in September and October combined were 2,000 less than previously reported. Over the past 3 months, job gains have averaged 176,000 per month.
One red flag in the report was the 4,000 drop in manufacturing workers, worse than the -3,000 expected, and following last month’s -5,000 print. Also of note, workers unable to work due to bad weather according to the BLS were 19K in Nov. The historical average for Nov. is 72k employees cannot work due to poor weather conditions. Another 113k workers who usually work full-time could only work part-time due to the weather last month.
The reason for the steep drop in the unemployment rate is that while the number of employed rose from 151,925K to 152,085K, coupled with a decline in the number of unemployed by 387K, the number of people not in the labor force soared to 95.055 million, a new all time high, which in turn pressured the labor force participation rate to 62.7%, the lowest since June and just shy of the 30 year low.
But as noted above, the biggest surprise was the negative print in the average hourly earnings which declined by 0.1%, the first negative print in 2016 and the wrst print since 2014.
More details from the report:
Total nonfarm payroll employment rose by 178,000 in November. Thus far in 2016, employment growth has averaged 180,000 per month, compared with an average monthly increase of 229,000 in 2015. In November, employment gains occurred in professional and business services and in health care.
Employment in professional and business services rose by 63,000 in November and has risen by 571,000 over the year. Over the month, accounting and bookkeeping services added 18,000 jobs. Employment continued to trend up in administrative and support services (+36,000), computer systems design and related services (+5,000), and management and technical consulting services (+4,000).
Health care employment rose by 28,000 in November. Within the industry, employment growth occurred in ambulatory health care services (+22,000). Over the past 12 months, health care has added 407,000 jobs.
Employment in construction continued on its recent upward trend in November (+19,000), with a gain in residential specialty trade contractors (+15,000). Over the past 3 months, construction has added 59,000 jobs, largely in residential construction.
Employment in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, changed little over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in November. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours.
In November, average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.89, following an 11-cent increase in October. Over the year, average hourly earnings have risen by 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees edged up by 2 cents to $21.73 in November.
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The final November fund flow numbers are in, and as BofA’s Michael Hartnett puts it, November, it was a “watershed” month for fund flows with the largest 5-week
bond outflows in three and a half years at $10 billion…
… the largest 3-week precious metals outflows
in 3.5 years…
… and the largest 5-week equity inflows since October 2013 at $34.5 billion.
Focusing on just the last week, the “Trumpflation rotation” out of bonds and into stocks continued, with $4.4 billion in bond outflows, $0.6 billion precious metals outflows vs $1.2 billion in equity
inflows according to Bank of America, which writes that investor flows have stabilized following violent post-US election flows; In fact, a mini revulsion may already be forming with the first TIPS outflows in 6 months, first EM equity inflows in 5 weeks, first HY bond inflows in 5 weeks and first utilities inflows in 5 weeks.
Some further observations from Hartnett who notes that while November was “Fast & Furious” there was no Euphoria: despite the strongest 4-week equity inflows in 2 years, a sharp drop in FMS cash to 5.0% and a big US equity rally, our sentiment signals have actually shifted in a more contrarian bullish direction in recent weeks. In fact, our BofAML Bull & Bear Indicator has fallen to 3.0, the lowest reading in 4 months, on the back of big redemptions from high-beta EM equity funds, EM debt funds & HY bond funds.
Broken down by asset class shows that the trend of flows out of active managed funds and into ETFs continued:
Looking only at Equity Flows:
And then fixed income, which saw 5 straight weeks of outflows from muni bond funds ($1.6bn)
However, it may all go just as fast as it came: according to Bloomberg, U.S. global-focused ETFs saw a net $742.5m of capital outflows on Dec. 1 – the funds have shrunk a net $1.5b in the past five days. Investors have put a net $23.3b into the funds in 2016. Should the risk-off sentiment persist, more outflows are likely.
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On the heels of Jeff Gundlach's "there's going to be a buyer's remorse period" warnings yesterday, the other 'bond king' has raised similar fears that the Trump rally is overdone (as are the prospects for growth behind it). Putting aside the book-talking as their bond portfolios suffer, Gross echoes Gundlach's "Trump's not the wizard of oz" comments, noting that the next president faces serious structural headwinds and warns investors "should move to cash," as any fiscal stimulus gains will be temporary at best.
As we noted yesterday, speaking to Reuters, Gundlach, who went "maximum negative" on Treasuries on July 6 when the yield on the benchmark 10-year Treasury note hit 1.32 percent and bottom-ticked what may have been a generational low in rates, said that markets could reverse the recent momentum in equities, and at the very latest by U.S. President-elect Donald Trump’s Jan. 20, 2017 inauguration.
The "new bond king" said that the strong U.S. stock market rally, surge in Treasury yields and strength in the U.S. dollar since Trump's surprising presidential victory more than three weeks ago look to be "losing steam," Gundlach told Reuters in a telephone interview.
“The bar was so low on Trump to the point people were expecting markets will go down 80 percent and global depression – and now this guy is the Wizard of Oz and so expectations are high,” Gundlach said. “There’s no magic here.”
Gundlach had warned last month that federal programs take time to implement, rising mortgage rates and monthly payments are not positive for the "psyche of the middle class and broadly," and supporters of defeated White House candidate Hillary Clinton are not in a mood to spend money.
"There is going to be a buyer's remorse period," said Gundlach, who voted for Trump and accurately predicted in January the winner of the presidential election.
And now, as Bloomberg reports, "the old bond king" Bill Gross is less than enthusiastic about the future under Trump…
Investors are misguided in betting that promised tax cuts, infrastructure spending and deregulation will spur faster growth, according to an e-mail Thursday from Gross, the billionaire bond fund manager. He said the benefits from such fiscal stimulus likely would be temporary.
Gross said future growth is primarily a function of productivity, which has flat lined for the last several years and shows little promise of accelerating.
“A strong dollar and continuing structural headwinds including aging demographics, de-globalization trade policies, and accelerating debt-to-GDP in almost all countries at now higher interest rates, promise to contain productivity at perhaps 1 percent annual growth rates and therefore real GDP growth at 2 percent,” he wrote.
“An investor should move to cash and cash alternatives, such as high probability equity arbitrage situations,” Gross, who runs the $1.7 billion Janus Global Unconstrained Bond Fund, said. “Bond durations should be far below benchmarks.”
With bonds bid this morning (and stocks suffering broadly the last two days), perhaps they are just talking their books, as Gundlach offers his opinion on what happens next: "The dollar is going to go down, yields have peaked and will move sideways, stocks have peaked as well and gold is going to go up in the short term."
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Gold and silver coins will protect from the coming financial crash – James Rickards, author of The Road to Ruin told Sean O’Rourke in a must listen to RTE Radio interview this week.
Rickards is the best selling author on finance and money and advises the US intelligence community on international economics and financial threats.
His advice to people with savings or investments to protect from the coming crash? Buy gold and silver coins.
“For savers and investors at any level, modest or wealthier – put 10% of your invest-able assets in physical gold or silver, for smaller amounts, silver might do very well.”
“It’s the future of money… Here is why . First of all it is non-digital. Everyone thinks they have money; what they have are electrons in banks…” You can have confiscation, negative interest rates, bank closures.
If you have physical gold you are outside of the digital system – that money cannot be frozen by the government. It cannot be hacked by Vladimir Putin…”
“Even if you have €10,000 (euros), out a thousand euros buy one ounce of gold put it in a safe place. If the banks are shut you will have a valuable asset. Or buy 50 ounces of silver – thats also about €1,000. 50 ounces of silver coins, one ounce coins in a safe place.
You will have something of value, even if the system collapses or not. “
Other key points made in interview:
“Financial Crashes are like earthquakes: we know that they are coming, but we know not the day or the hour. The next one is close and is likely to be severe, even epochal.”
“In 1998, Wall Street bailed out the hedge funds. In 2008, the central banks bailed out Wall Street. In 2018 – if not sooner – who’s going to bail out the central banks?”
Financial crises are cyclical and the next one is close. Not only that, but global elites have a secret plan for the next financial crisis.
It was decided at the G20 meeting in Australia in 2014 that there would be no more bail-outs. Instead, there would be bail-ins: when a bank is in distress, the rescue money comes from the stakeholders including depositors and savers.
“So depositors’ money is at risk, bondholders can take haircuts, stockholders can see their stock go to zero. That’s the new template.”
And this new template means that when the next crisis comes, the whole financial system will be shut down while the rescue is organised. People won’t be able to get their money from banks, they won’t be able to sell their shares. This is pretty scary stuff.
Rickards predicted that Donald Trump would be president and he says that Trump is using the Ronald Reagan playbook to try to boost the US economy, but it won’t work because the world is too different today from the way it was in the 1980s.
“Reagan had a lot of tailwinds: inflation had to come down, interest rates had to come down. He had fiscal space to run up the debt. Trump has headwinds.”
There’s a war going on between national leaders and the heads of major corporations, according to Rickards, and corporation tax will play a major part in the struggle.
“In a financial panic, everyone wants their money back… People say, oh I’ve money in stocks, money in bonds. No you don’t, you have stocks and bonds, but that’s not money. You have to sell them to get your money.”
Rickards’ distressing vision has happened before, he says. In 1933, President Roosevelt closed every bank in America. It’s also happened recently in Cyprus, Greece and in India today.
“It’s the future of money… It’s non-digital. Everyone thinks they have money; what they have are electrons in banks…”
Listen to Rickards Interview Here
Gold and Silver Bullion – News and Commentary
Gold rises from 10-month lows, heads for fourth consecutive weekly drop (LiveMint.com)
Fed may face unnerving shake-up under Trump administration (Reuters.com)
US Construction Spending up 0.5 Percent in October (GO.com)
Asian Shares Drop as Trump Effect Fades (WSJ.com)
China gold premiums hold near 3-year high (Reuters.com)
Doublelines Gundlach likes bonds, gold (ForexLive.com)
10-year Treasury yield hits fresh 17-month high (MarketWatch.com)
$4.1 billion pulled from U.S.-based taxable mutual bond funds during week: Lipper (Reuters.com)
Diana Choyleva: the unravelling of globalisation (MoneyWeek.com)
Can the Trump rally last? (MoneyWeek.com)
Gold Prices (LBMA AM)
02 Dec: USD 1,171.65, GBP 929.00 & EUR 1,100.88 per ounce
01 Dec: USD 1,168.75, GBP 930.09 & EUR 1,099.68 per ounce
30 Nov: USD 1,187.40, GBP 952.06 & EUR 1,115.44 per ounce
29 Nov: USD 1,187.30, GBP 952.45 & EUR 1,119.98 per ounce
28 Nov: USD 1,189.10, GBP 956.51 & EUR 1,117.99 per ounce
25 Nov: USD 1,187.50, GBP 953.30 & EUR 1,121.83 per ounce
24 Nov: USD 1,187.25, GBP 953.60 & EUR 1,125.04 per ounce
Silver Prices (LBMA)
02 Dec: USD 16.35, GBP 12.95 & EUR 15.36 per ounce
01 Dec: USD 16.30, GBP 12.91 & EUR 15.35 per ounce
30 Nov: USD 16.67, GBP 13.39 & EUR 15.66 per ounce
29 Nov: USD 16.54, GBP 13.26 & EUR 15.61 per ounce
28 Nov: USD 16.68, GBP 13.45 & EUR 15.73 per ounce
25 Nov: USD 16.47, GBP 13.21 & EUR 15.55 per ounce
24 Nov: USD 16.31, GBP 13.09 & EUR 15.43 per ounce
Recent Market Updates
– RBS Fail Bank of England Stress Test
– Peak Silver – Supply Deficits Mean Higher Prices
– Bail In Risk – €4 Trillion Banking System In Italy Poses Contagion Risk as Referendum Looms
– Gold Down 13.5% In 13 Days – Trump Bearish For Gold?
– War On Cash Just Got Real – India and Citibank In Australia
– Russia Gold Buying In October Is Biggest Monthly Allocation Since 1998
– Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards
– Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”
– Gold Sell Off On Fed Noise – “Interesting Times” To “Support Gold”
– Islamic Gold – Vital New Dynamic In Physical Gold Market
– Peak Gold Globally – “Bullish For Gold”
– Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
– President Trump – Why Market Loves Him and Experts Wrong
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Overnight Media Digest
WSJ
– President-elect Donald Trump has tapped retired Marine Corps Gen. James Mattis to become secretary of defense-a choice that requires Congress to pass a special law for the recently retired military officer to take up the Pentagon’s top post. http://on.wsj.com/2fM5XBp
– The worst bond rout in three years deepened Thursday, hammering debt issued in emerging markets and many U.S. states and cities, while sparing large companies the brunt of the impact. http://on.wsj.com/2gGafqD
– Howard Schultz is stepping down as chief executive of Starbucks Corp to lead an effort at the company to build high-end coffee shops that will charge as much as $12 a cup, his next attempt to revolutionize the way Americans consume coffee. http://on.wsj.com/2h05yM1
– Vice President-elect Mike Pence said Thursday that the incoming Trump administration is planning a burst of activity that would take aim at the gridlock in Washington, pressing forward with its goals to overhaul the tax code, health care and immigration laws. http://on.wsj.com/2geJtoS
– Chief Executive of United Technologies Corp Greg Hayes’ pilgrimage to Trump Tower ended roughly two weeks of intensive talks between representatives of Vice President-elect Pence and United Technologies. Under the deal, the company will get $7 million over 10 years to keep jobs in Indiana. http://on.wsj.com/2fW1UkA
– Investigators probing the missing billions at Malaysia’s 1MDB state development fund believe two former officials of the Abu Dhabi sovereign-wealth fund IPIC played a central role in the alleged global fraud. http://on.wsj.com/2geJKYS
FT
– President-elect Donald Trump said he chose James Mattis, a hard-charging retired general who led a Marine division to Baghdad during the 2003 invasion of Iraq, to serve as his secretary of defense. http://nyti.ms/2gtd6FI
– Three months after one of its rockets exploded on a launchpad, SpaceX hopes to resume launching in a couple of weeks. Iridium Communications, which provides communications services through a constellation of over 60 satellites, said it was aiming to launch the first batch of its next-generation satellites on a SpaceX Falcon 9 rocket on Dec. 16. http://nyti.ms/2gtdZhw
– Howard Schultz, the visionary leader of Starbucks , said on he would step down as chief executive next year. He will be succeeded by his close friend Kevin Johnson, the company’s current president and a longtime Starbucks board member. Schultz has made Starbucks a vocal part of the national conversation on issues like gun violence, gay rights, race relations, veterans rights and student debt. http://nyti.ms/2gt1Ity
– The governor of Mexico’s central bank, Agustín Carstens, said he would leave his position next July, adding to the uncertainty that has rattled the country’s economy since the election U.S. election. He will leave the Bank of Mexico to lead the Bank for International Settlements, a financial institution based in Basel, Switzerland. http://nyti.ms/2gt7afW
NYT
– President-elect Donald Trump said he chose James Mattis, a hard-charging retired general who led a Marine division to Baghdad during the 2003 invasion of Iraq, to serve as his secretary of defense. nyti.ms/2gtd6FI
– Three months after one of its rockets exploded on a launchpad, SpaceX hopes to resume launching in a couple of weeks. Iridium Communications, which provides communications services through a constellation of over 60 satellites, said it was aiming to launch the first batch of its next-generation satellites on a SpaceX Falcon 9 rocket on Dec. 16. nyti.ms/2gtdZhw
– Howard Schultz, the visionary leader of Starbucks , said on he would step down as chief executive next year. He will be succeeded by his close friend Kevin Johnson, the company’s current president and a longtime Starbucks board member. Schultz has made Starbucks a vocal part of the national conversation on issues like gun violence, gay rights, race relations, veterans rights and student debt. nyti.ms/2gt1Ity
– The governor of Mexico’s central bank, Agustín Carstens, said he would leave his position next July, adding to the uncertainty that has rattled the country’s economy since the election U.S. election. He will leave the Bank of Mexico to lead the Bank for International Settlements, a financial institution based in Basel, Switzerland. nyti.ms/2gt7afW
Britain
The Times
* Former Labour prime minister Tony Blair announced plans on Thursday for an institute to develop centre-ground policy to combat “the new populism” across the globe. http://bit.ly/2gM5sXA
* The number of jobs axed at Rolls-Royce in the past two years sailed through the 5,000 mark after the struggling engine-maker told 800 of its marine workers to find another berth. http://bit.ly/2gRZ0Ld
The Guardian
* Andrew Tyrie, who chairs the Treasury select committee, asks National Audit Office to inquire into any government assurances made to carmaker Nissan. http://bit.ly/2fXHeIR
* Online fashion retailer ASOS has been accused of breaching “the spirit if not the letter” of employment law designed to prevent the exploitation of low-paid temporary workers. http://bit.ly/2gM5G0Z
The Telegraph
* The chief executive of Channel 4, David Abraham, has complained of “an unprecedented level of Government interference” after the appointment of an ethnic minority woman to its board was blocked in Whitehall. http://bit.ly/2grTjqc
* Swiss bank UBS has merged most of its wealth management operations into a new business in Frankfurt, in a significant boost to the German city as it seeks to establish itself as a rival financial hub to London following Brexit. http://bit.ly/2gs2gju
Sky News
* KPMG’s UK chief, Simon Collins, is to step down from the role next year to compete for the top global job at the big four accountancy firm. http://bit.ly/2gMbcOT
* British regulator Ofcom has launched a review of landline-only telephone prices in a bid to protect elderly and vulnerable customers. http://bit.ly/2gdRtq8
The Independent
* Brexit secretary David Davis is promising businesses that the government will not end European Union freedom of movement in a way that damages the UK’s economy. http://ind.pn/2gLw4bb
* Centrica owned British Gas has announced it will freeze gas and electricity prices for more than six million customers this winter. http://ind.pn/2gaR8Vc
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As recently as two months ago – when December rate hike odds were at or below 50% – the monthly payrolls report was watched closely for hints about the Fed’s next move. However, now that December rate hike odds are effectively 100% (CME Fed has seen a modest drop to 92.7% in recent days), what the BLS will announce today carries far less significance, and if anything attention will be mostly paid on the internals, like wage growth for clues on the Fed’s pace of hiking into 2017, and labor market participation to see how Trump may react as he talks down what is otherwise expected to be a +180K print.
Manufacturing payrolls also will matter politically. Trump had whipped up support among Rust Belt voters as he threatened to tear up trade agreements and bring jobs back from overseas. The Bloomberg survey predicts factories cut 3,000 workers in November, after slashing 9,000 the previous month. Also politically relevant will be the almost 6 million employees were in part-time jobs but wanted full-time work. Those workers, known as working part-time for economic reasons, have been little changed this year and remains above its pre-recession level. The president-elevt will also watch the participation rate, which indicates the share of working-age people who are employed or looking for work. It fell in October and is near the lowest level since 1978.
So while it will not be as market moving, algos will still have a strong kneejerk reaction to any outlier numbers, especially since coming into today’s print Wall Street itself is quite confused, with a consensus print of 180K, however derived from an especially a wide range from 140K to 250K. The other components of the report include the unemployment rate (consensus is for no change at 4.9%) and average hourly earnings (expected to rise +0.2% mom). One additional possible surprise is the impact of Hurrican Matthew, which according to JPM subtracted 30-40K jobs from the October print, and which may boost November payrolls by a similar amount.
Below are the November payrolls consensus estimates:
Here are the expectations, broken down by bank:
As a reminder, last month’s Non-farm payrolls saw an increase by 161k and an upward revision to the September number to 191k, both figures being within the Fed’s bracket for growth. The data was followed by the FOMC, stating that most Fed officials see a hike as appropriate ‘relatively soon’ and a few of the voting members were worried that if the Fed let the jobless rate decline too low they may need to raise rates more steeply.
Via the WSJ, here are the 5 main things to look for in today’s report:
Some further thoughts on today’s report from RanSquawk:
CME Fed watch are pricing in a 93.5% chance for a hike and even with an ‘anomalous figure’ the likelihood of this affecting December’s decision from the FOMC is very slim. Many analysts are now stating that it is possible for any NFP figures to once again focus on the immediate economic conditions to the report, as opposed to any impact on the longer-term monetary element. However, this report may be an indication to the rate path for 2017, with many analysts stating that 2017 could be a hawkish year, with the exceptions of 2016 coming apparent in 2017.
As the Fed reiterated, and logic suggests, data continues to dictate the state of play and November saw sustained growth (161k). Inflation is a key indicator for the US economy and this month saw Y/Y CPI above the 2.00% target once again. As November’s data has shown no shock in the US economy and growth is still evident — regardless of the political position, it is fair to say that with the Fed all but guaranteed to hike in December.
Market Reaction
As ever with the NFP release, the headline is likely to garner much of the initial focus with algorithms and fast money moves jumping on any large discrepancies. If there is an overwhelmingly strong report, the USD will strengthen across the board however, as the dollar index continues to ramp many analysts consider the dollar upside to be limited and the possible move to lookout for is a poor report, negatively affecting the USD.
With focus no longer on the Fed and rates; equity markets may once again find themselves with some volatility and a miss in expectations could cause some selling pressure following the record levels seen over the past weeks in US equity markets, with a level of note in the S&P 500 to be the 2213.10 high. In terms of other technical levels, there is an internal downtrend line which originates on 23/08/16 to the next lower high on the 07/09/16 and support likely at 2158.20.
Gold could also see volatility with price action likely to mirror treasury markets with overwhelming beats on expectations across the board set to setoff some selling pressure across flight to safety asset classes; with the 10-year T-note Dec’16 future showing clean air on the downside and if any volume is seen on the downside, traction could cause heavy pressure bolstered by light holiday volumes. Gold also paints a bearish picture with the precious metal falling since Trump’s victory, with key support being the 1170.92 low. On the upside, there are notable levels of resistance at previous support levels. The first comes at the consolidation high of 1196 and then the psychological level of 1200.
* * *
Finally, as reported last night, this is what the bank that continues to run everything, Goldman Sachs, expects:
A series of stronger than expected data in recent days pushed Goldman Sachs to up their payrolls growth expectation to 200k (above the 180k expectations), but they note that while the unemployment rate is likely to drop (to 4.8%), average hourly earnings may disappoint. Of course, they add, any non-narrative-confirming misses on the data can likely be explained away by “weather effects and residual seasonality.”
As Goldman details, we forecast that nonfarm payroll growth increased to 200k in November, after an increase of 161k in October. We have revised up our forecast from 180k previously reflecting stronger data this week. Labor market indicators were stronger on balance last month, including improvements in reported job availability, the ADP report, and the employment components of service-sector surveys. In addition, we see a likely boost from positive weather effects and possible residual seasonality.
Arguing for a stronger report:
Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—rose to +5.2, reversing a small decline in October. This measure has risen by about ten points over the last year.
Service sector surveys. The employment components of service sector surveys mostly improved in November. The Richmond Fed (+7pt to +13), Dallas Fed (+6.5pt to +9.2), and New York Fed (+2.2pt to +10.9, after our seasonal adjustment) measures of service sector employment all strengthened. The Philly Fed non-manufacturing employment index edged down (-0.7pt to +15.6) but remains at levels consistent with expansion. Service sector employment increased 142k in October and has increased 161k on average over the last six months.
ADP. The payroll processing firm ADP reported a 216k gain in private payroll employment in November, up from a downwardly revised 119k increase in October. While this is a significant beat, the new methodology ADP introduced last month creates some additional uncertainty around the translation of this upside ADP surprise into the outlook for tomorrow’s nonfarm payroll report.
Some rebound from Hurricane-related weakness. In October, employment in the three sectors that we find are most sensitive to weather-related swings – retail, construction, and leisure and hospitality – increased by 20k, which is a smaller gain than the 6-month (33k) and 12-month (73k) average changes through September. Among East Coast states, employment in these sectors declined by a total of 16k in October, relative to an average monthly increase of 15k over the prior six months (Exhibit 1). Some of the biggest declines were in Florida and South Carolina, the states most impacted by Hurricane Matthew.
Seasonals. Since the recession, November payroll growth has surprised consensus expectations roughly 2/3 of the time, with an average surprise of +27k.
Exhibit 1: Some Potential Upside from East Coast States Impacted by Hurricane-related Weakness
Source: Department of Labor, Goldman Sachs Global Investment Research
Neutral Factors:
Temporary election-related hiring. Election-related hiring typically shows up to some degree in the government and marketing research and opinion polling categories in the non-seasonally adjusted payroll data. However, the BLS makes a special adjustment to these changes to remove the effects of the election and in prior election years those categories did not spike on a seasonally adjusted basis in November. Therefore, it is unlikely we will see any direct election effect in the seasonally adjusted series.
Jobless claims: Initial claims for unemployment insurance benefits moved slightly higher, with the four-week moving average edging up to 253k in the November survey week. Initial claims were affected by technical factors including temporary auto plant shutdowns and weather-related effects from Hurricane Matthew, but we do not detect a significant change in the underlying trend which continues to show low layoff activity in the economy.
Job cuts: Announced layoffs reported by Challenger, Gray & Christmas after our seasonal adjustment increased by 4k to 32k in November, but remain close to cycle-lows.
Arguing for a weaker report:
Online job ads. The Conference Board’s Help Wanted Online (HWOL) report reversed last month’s gains, and stands 15% lower than levels last year. However, we put limited weight on this indicator at the moment in light of research by Fed economists that argued that the HWOL ad count has been depressed by higher prices for online job ads.
Manufacturing sector surveys. The employment components of manufacturing surveys were mixed in November. The ISM manufacturing (-0.6pt to 52.3), Chicago PMI, Empire State (-6.2pt to -10.9), and Kansas City Fed (-6pt to +1) employment indexes all declined, while the Dallas Fed (+4.3pt to +4.5), Richmond Fed (+2pt to +5), and Philly Fed (+1.4pt to -2.4) measures edged up. Manufacturing employment declined by 9k in the October report, and has declined by 7k on average over the last six months.
We expect the unemployment rate to edge down to 4.8% in the November report from an unrounded 4.876% in October. Last month, the household survey showed a 43k decline in employment but the unemployment rate edged down to 4.9% due to a decline in labor force participation. The broader U6 unemployment rate dropped to a new post-crisis low of 9.5% as the number of involuntary part-time and marginally attached workers both declined.
We expect average hourly earnings to increase 0.1% month-over-month, or 2.7% from a year ago, after rising to a new cycle high of 2.8% year-on-year in October. A modest retracement of last month’s gains and negative calendar effects are likely to contribute to a softer number. Our wage tracker, which captures the broader trend in wage growth across four major indicators, stands at 2.6% year-over-year as of Q3.
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Hold your real assets outside of the banking system in one of many private international facilities –> http://ift.tt/2cyFwvQ;
Written by Jeff Nielson (CLICK HERE FOR ORIGINAL)
The price of gold (and silver) is presently falling. This was previously predicted as far back as the middle of February. Precious metals prices will almost certainly continue to fall, soon accompanied by a general crash in our markets and economies. The need (for the banking crime syndicate) to depress precious metals markets is to create the illusion that these metals are not safe havens, when panicked people are looking for somewhere to place the remnants of their wealth.
However, in order to create a veneer of legitimacy in these serially rigged markets, it’s necessary to fabricate a pretext for the decline in precious metals prices. This is coming from the mouths of the same talking-heads who only a few months earlier were crowing about “a new and very long bull market” for gold. It is in this light that we can view the latest propaganda nonsense from the Corporate media: the “India gold ban”.
Regular readers have already seen this theater previously. Three years ago; India’s previous government began radically curbing gold imports, culminating in a near-total ban in gold imports to the world’s greatest gold-lovers, and second-largest population. As was explained at the time, the ban on gold was for no reason in terms of economic fundamentals.
What was actually happening at that time is that the One Bank was blackmailing that government to do something about the extremely strong gold demand, and larger-than-normal gold imports which were
flowing into India. So the Big Banks did what these convicted currency-manipulators do every time they want to punish any particular nation, they manipulated India’s currency – lower. These convicted currency-manipulators continued pushing the rupee lower and lower until the gold ban was initiated by India’s government. At that point, the downward plunge in the rupee instantly and magically disappeared.
The ban didn’t work. It didn’t work (from the perspective of the One Bank) for several reasons. The ban on official gold imports simply inspired Indians to reopen centuries-old gold smuggling routes. Those smuggling routes had only been previously closed, voluntarily, after India’s government liberalized its gold market when it abolished the Gold Control Act in 1990.
The 2013 gold ban also failed because the moderate restriction of inflows of gold into India motived the Indian people to buy much larger quantities of silver, shattering previous import records for that metal. Finally, in banning the official importing of gold – and provoking gold smuggling – this meant that a blackmarket for gold arose in India, the automatic partner of any large-scale smuggling.
What accompanies blackmarkets? A blackmarket price for gold: a real-world price for gold where there would be no direct means for the banking crime syndicate to manipulate that price. It was for all these reasons that the One Bank relented on its previous blackmailing of India’s government, and allowed that nation to resume normal importing of gold.
Flash ahead to 2016; and some things are now different. There is a new regime in India, an extremely corrupt government which does not require blackmailing by the One Bank because the bankers already own this regime. This was previously demonstrated when this puppet government announced its “gold deposit scheme” (scam). It was such a laughably transparent attempt to steal the gold from the Indian people that it failed miserably.
While the corrupt Modi regime has denied it has plans to block imports, this denial comes despite weeks of persistent rumors that the government intends to “impose curbs” on India’s gold market. Based on these fears, premiums to buy gold in India jumped to a two-year high.
Again, as before, there is no reason for this attack on India’s gold imports. The official propaganda is that (ironically) this suppression of the gold market is aimed at reducing the amount of “black money” circulating in India’s economy. This propaganda is nonsensical for two reasons. First, we live in a world where the Big Banks are allowed to launder $trillions in dirty money for the drug cartels, and for supposed “terrorist entities”.
The banking crime syndicate is never punished for this serial money-laundering, despite the U.S.’s supposed “War on Terror” and “War on Drugs”. Yet here we have India’s (corrupt) government announcing increasingly draconian measures aimed at alleged money-laundering activities which only amount to $millions each year.
The second absurdity here was already noted. Any serious restriction of legitimate gold imports into India will instantly and automatically result in systemic gold-smuggling. That gold-smuggling will result in the blackmarket which inevitably accompanies smuggling. You can’t reduce the amount of “black money” in India’s economy by creating a blackmarket.
The final absurdity here is the increasingly hysterical hype emanating from the mainstream media in the West, to accompany this new (and doomed to fail) attack on India’s gold market:
Potential gold-import ban by India could be biggest bombshell since Nixon
This propaganda is both laughable and nonsensical. It’s nonsensical to suggest that ta (potential) second ban on India’s gold imports would be the “biggest bombshell” in the gold market in nearly half a century, when we already saw a ban on India’s gold imports three years ago – and the first ban failed. It’s laughable for the same reason: we already know that (at worst) this will be nothing more than a small-and-temporary deterrent to overall gold demand.
The fact that the mainstream media in the West have jumped all over the rumors coming from India is further proof that the propaganda machine is back to full-manipulation mode, and all talk of the Fake Rally has been abandoned. If these two-faced mouthpieces were even neutral toward the gold market, we could not possibly be seeing such bearishly one-sided and inaccurate propaganda about events in India.
While this current push in India will have no long-term effect on the gold market, the potential for a short-term disruption of imports into that nation is acknowledged. In this respect the timing of the latest announcement from the One Bank’s puppets in India is interesting.
What will happen when the One Bank crashes our markets and economies, and slams precious metals prices even lower to accompany this? Demand for gold and silver will explode higher throughout the Rest of the World, with populations which have not been brainwashed into forgetting the eternal wealth-protection provided by gold and silver. In this respect, the rumored attack by the Modi regime on India’s gold market can be seen as a closely-choreographed, preemptive move.
We know the general crash in our markets and economies is coming, but we don’t know when. Now we have an apparent move aimed at manipulating gold market demand in the world’s largest gold market which can/will only have a short-term impact on precious metals markets. This appears to be a strong indicator that the Next Crash is coming very soon.
Regular readers will recall that this Crash was originally pegged to occur in the middle of this year, pre-U.S. election, to follow the pattern of crashes in previous bubble-and-crash cycles. With the Next Crash now about to occur immediately after a new puppet regime has been elected/appointed in the United States, this suggests
that an exogenous “cause” for this Crash will be fabricated by the banking crime syndicate. This will be done in order to prevent their new puppets from being fingered as the scapegoats for this Crash.
As has been previously suggested, the most likely exogenous event to be manufactured as camouflage for a Crash is, as always, a new war, or perhaps some “terrorist” false-flag event. We are left with the following, implied chain of events. India’s government is apparently in the process of creating a temporary bottleneck in Indian gold demand. This implies that the Next Crash is nigh. In turn, this implies that the Next War is just around the corner.
Please email with any questions about this article or precious metals HERE
Written by Jeff Nielson (CLICK HERE FOR ORIGINAL)
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Did Jeff Gundlach do it again? Shortly after the DoubleLine manager told Reuters yesterday afternoon that the Trump rally is ending, that “stocks have peaked” and that it is “too late to buy the Trump trade”, US stocks tumbled to their sessions lows, and have continued to slide overnight, with S&P futures down 0.3%, alongside sliding Asian and European markets; oil and the dollar are also down with the only asset class catching a slight bid are 10Y bonds, whose yields are lower at 2.43% after reaching an 18 month high of 2.492% overnight ahead of today’s nonfarm payrolls report. The dollar was on course for its first weekly decline in four weeks as investors trimmed bets following recent gains.
However, the big risk event is not the job report, but Sunday’s Italian referendum, which has cast a blanket of concerns over Europe, and especially its banks, and has prompted financial markets to end the week the way they started, “overshadowed by caution as stocks fall with commodities, the yen advances and a selloff in Treasuries abates” in the words of Bloomberg.
“There is a great deal of trepidation among investors ahead of the
vote,” said Ken Odeluga, a market analyst at brokerage firm City Index
in London. “Even though we got a bounce yesterday after the OPEC
agreement, there is still a huge amount of interest on the bearish side
and shorts in place. It’s the focus for Europe, and we are going to see
more selling out of equities if we get a negative outcome. There is
certainly room for more volatility.”
Recent strong economic data from the U.S., including upbeat manufacturing activity and construction spending, have bolstered the view that the Fed will tighten monetary policy faster than expected to keep inflationary pressures in check. U.S. employers probably hired 179K workers in November, up from October, making it almost certain that the Federal Reserve will raise interest rates later this month. However, recent jitters that the ECB may announce a tapering of its own QE program next Thursday has become a bigger source of worry for markets than the Fed’s second rate hike in over a decade.
Today’s payroll number therefore comes at a very interesting time. The market consensus is for a 180k print which follows a 161k gain in October. The range though between economists is anywhere from 140k to 250k. Our US economists are at the lower end of the market and are forecasting a 150k reading which is below the 181k YTD and consistent with their view of a slower pace of economic activity in the current quarter. As always keep an eye on the other components of the report including the unemployment rate (consensus is for no change at 4.9%) and average hourly earnings (expected to rise +0.2% mom). The report is out at 8.30am.
The Stoxx Europe 600 Index extended its first weekly decline in a month and S&P 500 Index futures signaled further losses in U.S. equities as investors shift focus to a report on American payrolls. Oil led raw materials lower after climbing above $51 a barrel, Japan’s currency gained against all of its 16 major peers and gold rebounded from a 10-month low. While Treasuries edged higher, yields on 10-year notes are still near the highest since July 2015.
“Few investors want to have a strong position either way,” said Mohit Kumar, head of rates strategy at Credit Agricole SA’s corporate and investment-banking unit in London. “Less risk is a good strategy.”
Global stocks are headed for their first weekly decline since Donald Trump’s election victory last month as investors turn more wary about the outlook for higher U.S. rates and potential for rising political risks in Europe. The rally in commodities following Trump’s victory and an OPEC deal this week to cut output has boosted inflation expectations and bets the Federal Reserve will hasten increases. Volatility in European stocks and its single currency has climbed ahead of Italy’s weekend referendum and Austria’s presidential vote.
European shares fell more than 1 percent, led by industrial and financial stocks. They have gained the most since Donald Trump won the U.S. presidential election last month. The Stoxx Europe 600 Index extended its first weekly decline in a month and S&P 500 Index futures signaled further losses in U.S. equities as investors shift focus to a report on American payrolls. Oil led raw materials lower after climbing above $51 a barrel, Japan’s currency gained against all of its 16 major peers and gold rebounded from a 10-month low. While Treasuries edged higher, yields on 10-year notes are still near the highest since July 2015.
The gap between Italian and German bond yields, which shot to a 2 1/2-year high of 188 basis points (bps) last week, fell to 167 bps on Friday. “I suspect on Monday it will be very difficult to have a definitive opinion on what could be the future government in Italy and the appetite for further reform,” said Franck Dixmier, global head of fixed income at AllianzGI, adding that the fund was ‘short’ Italian bonds.
In commodity markets, oil prices eased from the 16-month high they reached after the Organization of Petroleum Exporting Countries agreed to cut output for the first time since 2008. Russia also agreed to reduce production for the first time in 15 years. Brent crude futures eased 0.26 percent to $53.80 a barrel.
Bulletin Headline Summary From RanSquawk
Market Snapshot
Top Headline News
Looking at Asian markets, stocks traded lower across the board following the mostly negative lead from US where tech names underperformed, with participants also tentative ahead of today’s key NFP. ASX 200 (-1.0%) and Nikkei 225 (-0.7%) declined from the open as investors booked profits, with the latter further weighed by JPY strength as USD/JPY pulled back below 114.00. In China, Hang Seng (-1.3%) and Shanghai Comp (-0.9%) conformed to the subdued tone amid higher money market rates in which despite the overnight SHIBOR snapping 16 consecutive daily increases, 14-day to 1-year term rates continued to rise and the 3-month HIBOR gained to its highest since May 2009. Finally, 10yr JGBs traded were supported amid the risk averse sentiment in the region, while the BoJ’s buying operations for a total JPY 1.23tr1 in maturities ranging from 1yr-10yr also underpinned. PBoC injected CNY 160bIn 7-day reverse repos, CNY 60bIn in 14-day reverse repos, CNY 25bn in 28-day reverse repos for a net weekly injection of CNY 70bIn vs. CNY 40bIn net injection last week. PBoC set mid-point at 6.8794. South Korean opposition parties agreed to propose motion for the impeachment of President Park, with the vote on motion to be held on December 9th.
Top Asian News
As many look ahead to today’s nonfarm payroll report from the US, the European session has kicked off with equities firmly in the red. European stocks have followed on from their Asian counterparts, with profit taking seen in energy and material names after the recent OPEC inspired upside. Further to this, IT stocks are also among the worst performers today, moving in tandem to the recent downside seen in US IT names, with the NASDAQ vastly underperforming over the past 48 hours. Elsewhere, price action remains relatively tight — fixed income markets have seen Bunds close the opening gap and pare earlier downside, which comes in tandem with the exacerbation of risk off sentiment given the softness seen in stocks. From a European standpoint, many are looking ahead to the Italian referendum on Sunday, with the GE/IT spread tightening so far this morning
Top European News
In currencies, markets have been dominated by risk sentiment this morning, with equity markets coming off better levels on Wall Street in recent sessions and Asia sporting modest losses overnight. All of this has served to pull some flow back into the JPY, which has gained across the board — notably the EUR this morning after rejecting 122.00 key resistance. USD/JPY has also suffered as a result, though buyers still stepping in in anticipation of a strong US jobs report this afternoon, but there may be other areas to express USD strength as stocks could dominate. The Italian referendum this weekend will also prompt some risk pairing to some degree, despite some suggesting the negative impacts may be overstated in the run up. EUR/USD looks the obvious sell given the immediate focus, but as we have seen in the past week or so, there has been stubborn support coming in ahead of 1.0550 on each test lower amid continuous bouts of USD strength. GBP may have softened a little vs the USD, but against the EUR stays strong as the soft Brexit perceptions have been strengthened by EU comments regarding Britain’s access to the single market. Cable looks support into the mid to low 1.2500’s, while sellers in EUR/GBP resolute ahead of .8500. Commodity FX continues to favour the CAD; unsurprising given the OPEC deal this week. Outperformance vs the AUD and NZD in evidence, but all 3 could come unstuck vs both the USD and JPY if equity market losses start to accelerate. AUD a little more buoyant than NZD, courtesy of the better than expected Oct retail sales read. The Turkish Lira crashed to an all time low of 3.5935 after Erdogan called for lower interest rates.
In commodities, it has been a mixed market as base metals have been trading lower in recent sessions, while Oil has risen in the latter part of the week in the aftermath of the OPEC meeting. Gains here are now tailing off a little with risk sentiment souring, and in turn, has seen Gold recoup some ground as emerging market weakness and the upcoming Italian referendum divert some trade into the safe havens. Dampened interest for Copper out of China looks to have been the latest catalyst for USD29 drop in the 3m contract. WTI hit highs around USD51.80, but is a little over a cent
down on these levels this morning. Gold hit USD1160.0 or so, but was up USD20.0 earlier this morning.
Looking at the day ahead, the main focus for markets today will be the November employment report in the US including the nonfarm payrolls number. Also due to be released is the ISM NY print for last month. Away from the data the BoE’s Haldane is scheduled to speak around lunchtime while the Fed’s Brainard and Tarullo are also on the cards for today. Meanwhile, along with obvious focus on the Italy referendum, a reminder also to keep an eye on the results of the Austrian presidential election re-run. Voting ends at 4pm GMT on Sunday with initial projections expected soon after.
US Event Calendar
DB’s Jim Reid concludes the overnight wtap
Bond markets must feel like my knee at the moment. Attacked from all directions. After a two-day +15.7bps rise in US 10yr yields and a +12.89% rise in WTI Oil over the same period, today’s payroll number therefore comes at a very interesting time. The market consensus is for a 180k print which follows a 161k gain in October. The range though between economists is anywhere from 140k to 250k. Our US economists are at the lower end of the market and are forecasting a 150k reading which is below the 181k YTD and consistent with their view of a slower pace of economic activity in the current quarter. As always keep an eye on the other components of the report including the unemployment rate (consensus is for no change at 4.9%) and average hourly earnings (expected to rise +0.2% mom). The report is out at 1.30pm GMT.
That move in rates yesterday actually saw 10y Treasury yields look at 2.5% at one stage (reaching a high of 2.492% intraday) before then settling into the end of the session to close at 2.448% (and +6.7bps on the day). Still, that’s the highest closing yield since July 2015. 2y Treasury yields were also up a little more than 3bps at 1.149% while 30y yields broke past 3.10% to close up nearly 8bps higher at 3.109%. There were similar moves also in Europe where 10y Bund yields in particular sold off 9.2bps to 0.364%. That was actually the biggest move higher for Bund yields since December 2015. BTP’s outperformed again in relative terms (10y +6.2bps to 2.046%) while EM had a day to forget with hard-currency bond yields in Brazil, Argentina and Columbia +20.1bps, +22.8bps and +11.6bps higher respectively.
A few factors seemed to be in play yesterday contributing to the moves. Clearly the sharp move higher again for Oil continues to challenge markets’ outlook for inflation, while some better than expected manufacturing data in the US also helped at the margin. The ISM manufacturing print rose to 53.2 (vs. 52.5 expected) in November from 51.9 in October with the new orders component also rising, while the final manufacturing PMI was revised up from 53.9 to 54.1 – a level last matched in October last year. A bumper day for corporate issuance across the pond was also said to have been a factor although much of chatter was about another ECB article on Reuters. The article suggested that the ECB will extend bond purchases beyond March but at the same time ‘consider sending a formal signal after its policy meeting next Thursday that the program will eventually end’. The suggestion was that much of the prep staff work has focused on a six-month extension at the continued 80bn purchase rate but that some have indicated that they would favour an extension at lower volumes. The article quoted ‘senior sources’ which raises the usual validity question about such a story. In any case it seemed to have some impact on markets.
Meanwhile in equity land there was a bit of a déjà-vu feeling for US equities in particular where another decent day for energy and financials stocks – reflecting the moves for Oil and rates – was more than offset by weakness across rate sensitive and defensive sectors and to a great extent, the tech sector with the Nasdaq (-1.36%) suffering its worst one-day fall since October 11th with the sector seemingly plagued by continued sector rotation post the US election. In Europe the Stoxx 600 closed -0.33% but the FTSE MIB (+0.99%) rallied for the third successive day, in which time it is up more than 5%. Like the moves for bonds, EM equities also struggled with bourses in Brazil, Mexico and Argentina down -3.88%, -0.95% and -1.97% respectively.
Alongside payrolls, Italy will continue to attract attention with the referendum being held on Sunday. In terms of timing, we’re expecting to get provisional turnout results from 7pm GMT with exit polls then expected around 10pm GMT on Sunday night (although these have proved unreliable in the past) with the first projections by Italian pollsters based on counted votes at around 10.45pm GMT. The final result could come in around 2am on Monday and we’ll have a full wrap up of it in Monday’s EMR.
Ahead of this, our European equity strategists have published a note this morning suggesting that a rebound in the Italian equity market should be largely restricted to financial stocks in case of a “Yes” vote. Although the FTSE MIB is trading at a 15% discount relative to its 10-year average vs. Europe, valuations look substantially less attractive once banks are excluded from the index. The relative P/E of the FTSE MIB ex banks is trading in line with its long-term average vs. Europe ex banks. Several Italian sectors are even trading at a premium vs. their European peers, showing no signs yet of a spillover of banking sector risks.
Over now to a recently forgotten theme – namely Brexit. Remember that? Yesterday Brexit secretary David Davies and Chancellor Hammond suggested that Britain may be prepared to pay into the EU budget for access to the single market. This is the first time such a view has been expressed in official channels. Obviously it’s still fairly early stages and also hypothetical but the UK government is seemingly becoming increasingly pragmatic from the hard line stance that was taken at the Conservative party conference back in October. Whether Europe has any interest in also being pragmatic is a debate for another day but overall the development certainly aided Sterling which climbed +0.68% vs. the Dollar to $1.2591 albeit well off the intraday high of $1.2696.
While we’re on the theme of politics, last night we also heard the slightly surprising announcement that French President Hollande will not run for re-election next year. The Socialist party will now choose its candidate through a two-round primary on the 22ndand 29th of January. The suggestion is that the door is now open for Prime Minister Valls to be in the running, as well as ex-economy minister Montebourg. It’s worth noting that the polls aren’t giving much of a chance for any Socialist candidate qualifying for the second round of the Presidential election and it appears extremely challenging for the centre-left to prevent a Fillon-Le Pen play-off in the second round and final round.
Refreshing our screens now where markets in Asia this morning are largely following the lead from the losses in Europe and on Wall Street yesterday. The Nikkei (-0.47%), Hang Seng (-0.98%), Shanghai Comp (-0.30%), Kospi (-0.75%) and ASX (-0.70%) are all currently in the red, while sovereign bond yields in the antipodeans are 7-8bps higher and a few basis higher in Asia. Oil (-0.30%) has edged a touch lower while US equity index futures are also modestly lower.
A quick wrap up of the remaining data yesterday. In the US the other data out included construction spending which rose a tad less than expected (+0.5% mom vs. +0.6% expected) but did include material upward revisions to prior months. In fact it was enough to see the Atlanta Fed revise up their Q4 GDP forecast to 2.9% from 2.4%. Initial jobless claims were reported as rising 17k last week to 268k while finally total vehicles sales in November fell as expected to an annualized rate of 17.8m from 17.9m.
Meanwhile in Europe the final manufacturing PMI’s for November didn’t throw up any real surprises. There was no change to the Euro area print at 53.7, while a 0.1pt downward revision for Germany to 54.3 was somewhat offset by a 0.2pt increase in France to 51.7. The non-core was where most interest lay though and as expected the data was reasonably strong. Italy rose 1.3pts to 52.2 (vs. 51.3 expected) and Spain rose 1.2pts to 54.5 (vs. 53.7 expected). The UK was a little more disappointing after printing at 53.4 (vs. 54.4 expected), down from 54.2 in the month prior. The final data to mention is the Euro area unemployment rate print which came in at 9.8% and a new post-financial crisis low.
Looking at the day ahead now. It’s a pretty quiet end to the week in Europe today with the sole release being the October PPI print for the Euro area. As mentioned earlier the main focus for markets today will of course be the November employment report in the US including the nonfarm payrolls number. Also due to be released is the ISM NY print for last month. Away from the data the BoE’s Haldane is scheduled to speak around lunchtime while the Fed’s Brainard (at 1.45pm GMT) and Tarullo (at 6pm GMT) are also on the cards for today. Meanwhile, along with obvious focus on the Italy referendum, a reminder also to keep an eye on the results of the Austrian presidential election re-run. Voting ends at 4pm GMT on Sunday with initial projections expected soon after.
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