U.S. Review
Blockbuster Payrolls Set the Tone
- Nonfarm payrolls surged 321,000 in November, as the workweek and average hourly earnings picked up. The employment report, coupled with lower gas prices, bodes well for consumption in the fourth quarter.
- The ISM manufacturing and non-manufacturing indices remained firmly in expansion territory, with solid gains in the new orders and export orders components.
- The U.S. trade deficit narrowed slightly in October, as export growth outpaced imports, though this comes after a sizable widening of the deficit in the previous month.
Global Review
Brazilian Central Bank Pushes Forward
- The Brazilian central bank surprised markets in late October, just days after the second round of presidential elections, when it raised the Selic benchmark interest rate by 25 bps. The central bank sent an even stronger signal to markets on Dec 3, pushing the Selic rate 50 bps higher to take it to 11.75 percent, in an attempt to keep a lid on the Brazilian currency and inflation expectations.
- The current shift in policy direction from what President Rousseff followed during her first term in office could be signaling a larger influence by ex-President Da Silva in the Rousseff administration.
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GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
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Week ahead – BoE and RBA decisions headline a calm week
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