The main currency pairs aren’t doing an awful lot ahead of today’s key jobs report in the US. The euro did trade up to a post-Fed meeting high of about $1.1770 against the dollar yesterday and is hovering around there this morning. Sterling is trading just below $1.34 against the US currency and at about £0.8785 versus the euro, with UK labour market data released a short while ago having little impact on the pound although they do add to the case for a Bank of England rate cut this Thursday.
Yesterday’s Events
US government bond yields nudged down a bit further, with 2- and 10-year yields both a couple of basis points lower on the day, while German and UK yields were largely unchanged. European equities outperformed again, advancing by more than 0.5%, while the main US indices all ended in the red with the Nasdaq leading the decline (shedding around 0.6%).
This morning’s labour market report in the UK shows employment fell over the three months to October, while the unemployment rate rose to a near four-year high of 5.1%. Wage growth continues to moderate, with the year-on-year increase in private sector earnings – which the Bank of England monitors very closely – dipping below 4% for the first time since the end of 2020.
Fed member Williams says he expects growth in the US to pick up next year “fueled by tailwinds from fiscal policy, favourable financial conditions, and increased investments in artificial intelligence”, and sees tariffs having “a largely one-off price level effect” with inflation declining to just under 2.5% next year (from close to 3% currently). He believes monetary policy is now “well-positioned” following recent rate cuts, suggesting he’s not in a hurry to lower rates again.
The Day Ahead
Today’s jobs report in the US is expected to show payrolls rose by 50k in November according to the consensus forecast, with the unemployment rate seen nudging up to a four-year high of 4.5%. Other data due today include retail sales in the US and flash PMIs for December in the main economies.
Today's Talking Points 16.12.2025
Market Commentary
The main currency pairs aren’t doing an awful lot ahead of today’s key jobs report in the US. The euro did trade up to a post-Fed meeting high of about $1.1770 against the dollar yesterday and is hovering around there this morning. Sterling is trading just below $1.34 against the US currency and at about £0.8785 versus the euro, with UK labour market data released a short while ago having little impact on the pound although they do add to the case for a Bank of England rate cut this Thursday.
Yesterday’s Events
US government bond yields nudged down a bit further, with 2- and 10-year yields both a couple of basis points lower on the day, while German and UK yields were largely unchanged. European equities outperformed again, advancing by more than 0.5%, while the main US indices all ended in the red with the Nasdaq leading the decline (shedding around 0.6%).
This morning’s labour market report in the UK shows employment fell over the three months to October, while the unemployment rate rose to a near four-year high of 5.1%. Wage growth continues to moderate, with the year-on-year increase in private sector earnings – which the Bank of England monitors very closely – dipping below 4% for the first time since the end of 2020.
Fed member Williams says he expects growth in the US to pick up next year “fueled by tailwinds from fiscal policy, favourable financial conditions, and increased investments in artificial intelligence”, and sees tariffs having “a largely one-off price level effect” with inflation declining to just under 2.5% next year (from close to 3% currently). He believes monetary policy is now “well-positioned” following recent rate cuts, suggesting he’s not in a hurry to lower rates again.
The Day Ahead
Today’s jobs report in the US is expected to show payrolls rose by 50k in November according to the consensus forecast, with the unemployment rate seen nudging up to a four-year high of 4.5%. Other data due today include retail sales in the US and flash PMIs for December in the main economies.
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