Markets
December FOMC Minutes still echoed through dealing rooms yesterday. Markets concluded that the US central bank could be on its way for a March rate hike with intentions to start winding down the $8.8tn balance sheet later this year. Voting regional Fed governor Bullard backed this scenario as did non-voting San Francisco Fed governor Daly. The latter emphasized strength on the US labour market as witnessed for example earlier this week in a very strong December ADP employment report. Today’ payrolls are expected to confirm this. Consensus expects a decent net job creation of 447k with the unemployment rate forecast to decline from 4.2% to 4.1%, which would be the lowest since February 2020 (3.5%). Average hourly earnings are forecast to remain robust at 0.4% M/M and 4.1% Y/Y. The key question is whether the data will still be able to influence main markets further following a volatile start (excl. FX)…
