It's jobs day, a huge weekend in European politics, and Bill Gross isn't buying Trump. Here are some of the things people in markets are talking about today.
While this week has been a particularly good one for bullish data from around the world, today will see the biggest test of that trend when the U.S. Bureau of Labor Statistics releases November's jobs data at 8:30 a.m. ET. Expectations are that employers added a net 180,000 workers in the month, keeping the unemployment rate at 4.9 percent. Average hourly earnings growth is expected to match October's 2.8 percent gain, which was the fastest pace since 2009. With the futures-implied probability of a rate hike at this month's Federal Reserve meeting remaining at 100 percent, it would most likely take a huge miss on today's number to move the dial on expectations there.
Italians go the polls on Sunday in a referendum on political reform, with the stakes high as Prime Minister Matteo Renzi has said he will resign should he lose. While traders, already shaken from a year of political shocks, are concerned about the fallout if Renzi quits, at least this time they should be prepared for it as polls have consistently shown a 'no' victory most likely. Also on Sunday, there is a rerun of the Austrian presidential election, with two candidates at opposite ends of the political spectrum competing for the largely ceremonial post. There was a major development in French politics yesterday when President Francois Hollande made the surprise announcement that he would not be standing for a second term in office.
Not buying Trump
Erstwhile bond king Bill Gross has said that he isn't buying the Trump rally, as he doesn't see the changes proposed by the president-elect providing long-term stimulus to the economy. As U.S. Treasury yields continue to rise, one aspect of the Trump team's plan may already be coming under pressure. Steven Mnuchin has said he would look at taking advantage of historically low rates in order to sell 50- and 100-year bonds just as the window for that seems to be closing.
Overnight, the MSCI Asia Pacific Index lost 0.4 percent while Japan's Topix index also dropped 0.4 percent following a strong November rally. In Europe, the Stoxx 600 Index was 1.1 percent lower at 5:21 a.m. ET as investors await the results of Italy's referendum. S&P 500 futures were down 0.3 percent.
Mad Dog, and the Englishmen
President-elect Donald Trump said yesterday he would appoint General James 'Mad Dog' Mattis as the nation's defense secretary. Trump is also said to narrow the search for Director of National Intelligence to three candidates. In the U.K., former Conservative Party member and London mayoral candidate Zac Goldsmith lost his seat to anti-Brexit Liberal Democrat Sarah Olney in a by-election. May's government said the result "doesn’t change anything."
What we've been reading
This is what's caught our eye over the last 24 hours.
- OPEC deal hinged on 2 a.m. call and it nearly failed.
- Worst-case scenario no sweat for Chinese banks: PineBridge
- Shredding Iran nuclear deal could prove harder than Trump thinks.
- November was a massive month for markets around the world.
- South Africa junk rating might be hours away and last years.
- Yes, there’s an award for best banknote. No, the U.S. never wins.
- On India's reverse helicopter drop.