Markets await clarity from US nonfarm payrolls

US initial jobless claims rose in the week ending 3 January 2026 to 208k, up 8k week/week. On a four-week moving average basis the total number of new claims dipped to 211k from 219 in the prior week. Continuing claims ticked higher to 1.91m, up from 1.86m a week earlier. Separate to the claims data, the Challenger, Gray & Christmas layoffs report reported 35,553 jobs cuts in December, their lowest level since July 2024. Firms reportedly also announced plans to add more than 100k jobs last month. Overall the data further reinforces a labour market picture in the US that looks to be stalling. Focus today will be on the nonfarm payrolls numbers for December and the unemployment rate.

Inflation in China accelerated to 0.8% y/y in December, its fastest level since February 2023. The rise in prices last month was largely down to higher food costs. Core CPI in China was up by 1.2% while producer prices were still negative at 1.9%, though less of a drop than a month earlier.

Today’s Economic Data and Events

11:00 TU industrial production Nov y/y

17:30 US nonfarm payrolls change Dec: forecast 70k

17:30 US unemployment rate Dec: forecast 4.5%

17:30 US housing starts Oct: forecast 1.3m

19:00 US University of Michigan sentiment Jan p: forecast 53.5

Fixed Income

US Treasury yields ticked marginally higher at the front of the curve with the 2yr yield up 2bps at 3.4881% while the 10yr yield rose by 2bps to 4.1672%. Markets are waiting for the release of the nonfarm payrolls data for December to set a clearer near-term trajectory.

The government of Türkiye raised USD 3.5bn in a dual tranche Eurobond deal. A USD 2bn 7yr tranche priced at a yield of 6.35% and a USD 1.5bn 12yr priced at a yield of 6.9%. Government statements noted the bond was more than 3x oversubscribed.

Dubai Aerospace priced a USD 600m 7yr at +120. The deal was upsized from an original USD 500m plan.

Saudi Telecom prices a USD 2bn issue in dual tranche sukuk. A USD 750m 5yr priced at +75 while a USD 1.25bn 10yr priced at +90.

FX

The US dollar extended gains against peers overnight with a focus on the upcoming jobs data and US supreme court decision governing the legality of the Trump administration’s tariffs. EURUSD slipped 0.1% to 1.166, USDJPY was marginally higher at 156.76 while GBPUSD fell by 0.3% to 1.3458.

In emerging economies, the Indian rupee weakened after a few days of gains, with USDINR up 0.2% to 90.0275. The Turkish lira was stable at 43.0429 overnight but has jumped in early trade today to 43.1525. The Egyptian pound was near unchanged at 47.2722.

Equities

Benchmark US equity markets were mixed overnight with the Dow Jones up 0.6% while the S&P 500 was flat and the NASDAQ declined by 0.4%. European markets leant negative with a 0.3% drop in the Euro Stoxx index while the FTSE was near flat.

In local markets the DFM had a 0.1% rise overnight while the ADX closed lower by about the same amount. The Tadawul ended its final session of the week with a gain of 0.2% while the EGX rallied by 0.8%. In Türkiye, the BIST 100 closed higher by 0.5%.

Commodities

Oil prices had their strongest day of 2026 so far overnight with a 3.4% rise in Brent futures to USD 61.99/b, up more than USD 2/b. WTI also had a strong rally, up 3.2% at USD 57.76/b. Market focus is likely switching from the uncertainty over what is next for Venezuela’s oil production to the political unrest in Iran and what it could mean for oil output in the country. Oil production in Iran has steadily moved higher in recent years, estimated at 3.3m b/d as of December 2025.

Precious metals prices continue to hover ahead of the release of the nonfarm payrolls which may act as a binary risk for the space. Gold was higher by 0.5% overnight at USD 4,478/troy oz while silver dropped by 1.5% to USD 76.99/troy oz.

Industrial metals were broadly weaker with a drop of 1.4% in LME copper and a 4% decline in LME nickel.