Market Analytics and Considerations
Key Notes
- US non-farm payrolls exceeded forecasts, while salaries fell.
- The US dollar (DXY) is having difficulty maintaining recent advances.
After the most recent US labor data revealed that 223k additional employment was created in December, vs market expectations of 200k and a trimmed previous month’s 256k, the US dollar seems attempting to hold onto previous rises. The rate of unemployment fell from 3.7percentage points to 3.5%, whereas average hourly earnings dipped from 4.8percentage points to 4.6% over the past year and from 5percent predicted to 4.6%. A little lopsided package that could make the US dollar suffer at its present elevated amounts.
According to yesterday’s ADP employment report, private companies created 235k new job opportunities in Dec, significantly surpassing the 150k market projections and the 182k jobs created in Nov. ADP reports that while major institutions had a 151k loss of jobs, recruitment remained robust in small and medium-sized businesses.
The Federal Reserve may consider raising US interest rates further and for a longer time frame in an attempt to keep inflation in check given the strength of the US job market. Esther George, president of the Kansas City Fed, stated recently that levels may have to be increased to 5percentage points or higher for a period in order to combat inflation, and other Fed officials have recently attacked market assumptions that interest rates will decline this year. Three Fed members are scheduled to speak later this afternoon, but their views on rates and the job market may well determine how prices move so over weekend.
