Jan 4, 2019, by Lorcan Roche Kelly
Today’s U.S. jobs data for December is expected to show employers added 184,000 positions when the number is released at 8:30 a.m. Eastern Time. Forecasts suggest the jobless rate will hold at 3.7 percent and wage growth will cool slightly to 3.0 percent. Should today’s number turn out as expected, it would be below the 11-month average of 206,000, with economists suggesting that 2018’s strong growth will not be repeated in 2019.
Deputy U.S. Trade Representative Jeffrey Gerrish will lead a delegation to talk with Chinese counterparts on Monday in the first meeting of the two sides since a 90-day truce was agreed in Argentina last month. While the initial talks will be technical in nature, U.S. Trade Representative Robert Lighthizer is expected to meet with Chinese Vice Premier Liu He, President Xi’s top economic adviser, later this month, according to a person familiar with the matter. Stocks rose with investors seeing the meeting as a positive step towards resolving the trade war.
Euro-area inflation dropped to an eight-month low of 1.6 percent in December, down from 1.9 percent in November and below analyst expectations. The fall in headline inflation is unlikely to cause undue concern at the European Central Bank as much of the move was down to volatile oil prices – a measure of core inflation remained unchanged at 1 percent. In China, monetary authorities delivered stimulus by cutting the reserve ratio by 1 percentage point in a bid to revive sluggish growth.
Overnight the MSCI Asia Pacific Index slipped 0.2 percent, with Japanese markets proving a drag on the region as they played catch-up following some holidays. The Topix closed 1.5 percent lower after the first session of the new year. In Europe the Stoxx 600 Index was 1.3 percent higher at 5:45 a.m. as sentiment improved ahead of next week’s trade talks. S&P 500 futures also rose ahead of the jobs number, the 10-year Treasury yield was at 2.606 percent and gold slipped from its recent high.
As well as U.S. payrolls data, we also get Canadian unemployment numbers at 8:30 a.m. Markit services and composite PMIs for the U.S. are due at 9:45 a.m. At 10:15 a.m. Fed Chair Powell is joined by Janet Yellen and Ben Bernanke for an interview at the American Economic Association in Atlanta. For oil market watchers there’s the EIA oil inventory report due at 11:00 a.m. and the Baker Hughes rig count due at 1:00 p.m.