Morning Macro 17th December
Double NFP day yesterday. October showed a drop of 105k, almost completely undoing September’s additions, and November saw a 64k rise. Federal government jobs keep falling, as workers taking Trump’s deferred buyouts leave the workforce. NFPs now showing consistently weaker monthly values than last few years. (Figure 1)
Further big downward revisions to August and September data too, totalling 33k less jobs added than previously reported. Concerningly, the unemployment rate rose to 4.6%, from 4.4% in October and above expectations. That puts it at the highest since September 2021!
Fed’s Goolsbee says he expects strong growth in 2026, allowing for more cuts to Fed funds rate. OIS still only pricing 2 full cuts over the next 12 months with the first full cut priced only in June.
Even so, inflation expectations rising again and precious metals are reacting: silver got to a new intraday record high at $66.51/oz this morning, spot palladium reaches new record too, at $1,630.50/oz and gold near record too. Platinum in particular is surging, up at least 2%+ each session for the last 5 successive days – 4% today! Now more than doubled YTD. (Figure 2)
Equities look like they’re rolling over; the S&P 500 closed yesterday at 6,800, but only down 1.8% from record high in October. Big tech/AI names struggling like Oracle – down more than 45% from September record.
European flash PMIs for December were mixed: the UK surprisingly outperformed expectations despite poor labour market data (unemployment rate 5.1% is highest since May 2021!), Germany and broader Euro Zone continued to underperform. However, ZEW economic sentiment index for Germany was stronger than expected at 45.8, aided by the auto and export sectors.
Data today: MBA Mortgage data, Ifo business climate
