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

 

Date Event Survey Actual Prior
12/31 Dallas Fed Manf. Activity 15 -5.1 17.6
01/02 Markit US Manufacturing PMI 53.9 53.8 53.9
01/03 MBA Mortgage Applications -8.50% -1.40%
01/03 Challenger Job Cuts YoY 35.30% 51.50%
01/03 ADP Employment Change 180k 271k 179k
01/03 Initial Jobless Claims 220k 231k 216k
01/03 Continuing Claims 1690k 1740k 1701k
01/03 Bloomberg Consumer Comfort 59.6 59.4
01/03 Construction spending data postponed by govt shutdown
01/03 ISM Manufacturing 57.5 54.1 59.3
01/03 ISM Employment 56.2 58.4
01/03 ISM Prices Paid 57.7 54.9 60.7
01/03 ISM New Orders 51.1 62.1
01/03 Wards Total Vehicle Sales 17.24m 17.50m 17.40m
01/04 Revisions: Seasonally Adjusted Household Survey data
01/04 Change in Nonfarm Payrolls 184k 312k 155k
01/04 Two-Month Payroll Net Revision 58k
01/04 Change in Private Payrolls 185k 301k 161k
01/04 Change in Manufact. Payrolls 20k 32k 27k
01/04 Unemployment Rate 3.70% 3.90% 3.70%
01/04 Average Hourly Earnings MoM 0.30% 0.40% 0.20%
01/04 Average Hourly Earnings YoY 3.00% 3.20% 3.10%
01/04 Average Weekly Hours All Employees 34.5 34.5 34.4
01/04 Labor Force Participation Rate 63.10% 62.90%
01/04 Underemployment Rate 7.60% 7.60%
01/04 Markit US Composite PMI 54.4 53.6
01/04 Markit US Services PMI 53.4 54.4 53.4