US jobs data ends 2024 strongly

US initial jobless claims fell to 211,000 in the week ending December 28, down from 220,000 the previous week and lower than the predicted 221,000. This marked an eight-month low for the measure as the US labour market continues to show surprising resilience despite the period of tighter monetary policy. Continuing claims in the previous week to December 21 also ticked down, coming in at 1.844mn, down from 1.896mn on the previous reading and a three-month low for the measure. In other positive data from the US, the S&P Global manufacturing PMI reading for December was revised up on the second reading to 49.4, from 48.3 on the initial print.

Today’s Economic Data and Events

11:00 Turkey CPI inflation, % y/y, December. Forecast: 45.2%

19:00 US ISM manufacturing survey, December. Forecast: 48.2

Fixed Income

• There were modest gains in USTs yesterday, with yields on the 10yr down 1bps to 4.5590%, while the 2yr yield closed down by less than 1bps at 4.2395%. The robust jobs data released yesterday does not suggest that the Fed will be forced to accelerate its rate-cutting.

FX

• The US dollar started the year strongly, with the DXY index closing up 0.8% against its basket of peer currencies, trading around two-year highs. GBP closed down 1.1% on the day at 1.2380, while EUR did not perform much better as it lost 0.9% to 1.0265.
• JPY lost 0.2% against the dollar to 157.50.

Equities

• Weak PMI data out of China saw Asian equity markets start the year on the back foot, with the Shanghai Composite dropping 2.7% on Thursday, while the Hang Seng fell 2.2%. In Japan, the Nikkei ended the day 1.0% lower.
• US equities also started the year under pressure as the S&P 500 closed down for a fifth straight session, ending down 0.2% on the day. The NASDAQ also fell 0.2%, while the Dow Jones dropped 0.4%.
• Locally, the DFM ended Thursday 0.1% lower, while the ADX fell 1.0%. Saudi Arabia’s Tadawul gained 0.2% to end its trading week up 2.0%.

Commodities

• Reports of falling US crude inventories were supportive of oil prices to start the year and both benchmarks rose for a fourth straight session. Brent futures closed up 1.7% at USD 75.9/b, while WTI added 2.0% to USD 73.1/b.