We expect another decent US employment report today

Allan von Mehren Danske Bank A/S

Market movers today

Today brings some very important data releases. The main event is the US jobs report for November. Employment in October was quite strong, both when looking at the upward revisions of the previous months and the fact that the strike at General Motors pulled the headline down by nearly 50,000 workers. Soft indicators are showing a weakening in employment growth, but the headline is likely to be strong, as the striking workers have returned to work. We estimate non-farm payrolls rose 200,000 in November, suggesting underlying growth of around 150,000.

October German industrial production figures will give us a clue about how the manufacturing sector started Q4. Recent signs of a forming trough in leading indicators such as IFO and PMI give hope that the worst of the German industrial recession is behind us. On the other hand, yesterday's factory orders surprised on the downside, suggesting that weak industrial activity persisted at the start of Q4. Industrial production figures are also due for both Norway and Denmark. In Norway we expect a 0.2% print.

Markets will also keep an eye on headlines from the SPD party convention that kicks off today. With the surprise win of Norbert Walter-Borjans and Saskia Esken as party leaders last week, hopes in the market about fiscal easing have rekindled. In Research Germany - Four reasons why a fiscal boost is not around the corner, 5 December, we take a closer look at this issue.

Selected market news

The markets are in wait-and-see mode ahead of the US payroll report today and the informal deadline of a US-China phase one trade deal only nine days away. Most equity markets are trading with a slight positive tone , though, based on cautious optimism that the US and China will find common ground and strike a deal ahead of 15 December when the US is set to put a 15% on another USD160bn goods coming from China. Yesterday Trump stated that the talks were 'moving right along'.

While the two rivals seem to be getting closer to a phase one deal, the confrontation continues in all other areas. Yesterday, yet another front of tension opened up, as the White House administration is objecting to a USD1bn World Bank loan to China . The rift has another angle to it as the World Bank is now headed by David Malpass , who is American and was appointed by Washington earlier this year.

US tensions with North Korea have resurfaced and in the past days turned into an exchange of insults . Yesterday North Korea named Trump a 'dotard' in response to Trump calling Kim Jong-Un 'rocket man' again three days ago. North Korea has threatened to end the diplomatic route by the end of December unless Washington makes concessions.

Japan released data on labour earnings overnight showing an unchanged annual rate of 0.5% y/y. Despite an unemployment rate at 2.4%, close to the lowest in 30 years, Japan is still struggling to create higher wage growth and inflation.

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Allan von Mehren

Danske Bank A/S

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