Treasury yields are noticeably higher this morning as part of a risk-on move sparked by reports that China cut their reserve ratios by 100bps and confirmed the next round of trade negotiations start next week. U.S. equity futures are still set to open higher (SPX +1.33%) on the back of a better than expected jobs report. The consensus was that risk markets would respond positively to a weaker report since it would increase the odds of a Fed pause. However, nonfarm surged by 312k in December, due largely to gains in the service sector, beating even the most optimistic forecasts of 225k. In addition, November and October payrolls were revised upward by 21k and 37k respectively. Wage data continues to be robust as average hourly earnings increased by 3.2% YoY.

Chris Eckhoff
Associate, Investment Management Group


12/31Dallas Fed Manf. Activity15-5.117.6
01/02Markit US Manufacturing PMI53.953.853.9
01/03MBA Mortgage Applications-8.50%-1.40%
01/03Challenger Job Cuts YoY35.30%51.50%
01/03ADP Employment Change180k271k179k
01/03Initial Jobless Claims220k231k216k
01/03Continuing Claims1690k1740k1701k
01/03Bloomberg Consumer Comfort59.659.4
01/03Construction spending data postponed by govt shutdown
01/03ISM Manufacturing57.554.159.3
01/03ISM Employment56.258.4
01/03ISM Prices Paid57.754.960.7
01/03ISM New Orders51.162.1
01/03Wards Total Vehicle Sales17.24m17.50m17.40m
01/04Revisions: Seasonally Adjusted Household Survey data
01/04Change in Nonfarm Payrolls184k312k155k
01/04Two-Month Payroll Net Revision58k
01/04Change in Private Payrolls185k301k161k
01/04Change in Manufact. Payrolls20k32k27k
01/04Unemployment Rate3.70%3.90%3.70%
01/04Average Hourly Earnings MoM0.30%0.40%0.20%
01/04Average Hourly Earnings YoY3.00%3.20%3.10%
01/04Average Weekly Hours All Employees34.534.534.4
01/04Labor Force Participation Rate63.10%62.90%
01/04Underemployment Rate7.60%7.60%
01/04Markit US Composite PMI54.453.6
01/04Markit US Services PMI53.454.453.4