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Ahead of the US jobs report on Friday, survey data signalled that the labour market remained solid into the end of the year.
Market consensus pointed to non-farm payroll gains of 171,000 in December from 199,000 in November. Growth over the past few months had been affected by strike action to the tune of approximately 30,000. The unemployment rate is expected to have ticked up a tenth to 3.8%. Wages are forecast to remain steady at 0.3% m/m and 3.9% y/y.
“In the details, we anticipate continued weakness in the information/tech and finance sectors, while government jobs likely stayed perky (note that the government has contributed 64k jobs on average to payrolls every month since July),” posited TDS Securities in a note.
According to preliminary data from the EU statistics office Eurostat, last month the annual rate of consumer price growth in the single currency area rose eight-tenths of a percentage point to 2.9%, which matched the market estimate for the first increase since April.
The core rate continued its downward trend, dropping to 3.4% as expected from 3.6% in November.
Eurostat said food, alcohol, and tobacco prices showed the highest annual increase with a rise of 6.1% versus 6.9% in November. Energy prices fell 6.7% on the year in December following a 11.5% drop in the previous month.
Traders pared bets on interest-rate cuts from the European Central Bank and Bank of England following key inflation data in the region and ahead of the US jobs report.
Money markets priced fewer than 150 basis points of monetary-policy easing by the ECB and less than 125 basis points by the BOE in 2024, according to swaps tied to the central bank meeting dates. It’s the first time since mid-December that traders bet on fewer than six and five quarter-point cuts respectively.