US LABOR MARKET: It’s Not Only Claims Today, Watch Out For Revelio And More
Weekly jobless claims will continue to be an important update for tracking labor conditions, with initial claims at very low levels but continuing claims having pushed higher in recent weeks. However, when it comes to labor updates, we also flag Challenger job cuts (0730ET) and Revelio Labs' labor statistics (0830ET) for November in particular, rounded out by the final Chicago Fed u/e rate estimate for November (also 0830ET).
- The October Challenger report showed a sharp increase in layoffs to its highest for an October since 2003 along with tepid hiring plans over Sep-Oct combined. Focus should be on the layoff announcements whilst we only watch November hiring plans to see if there were any later than usual plans ahead of the holidays.
- The Revelio nonfarm payrolls estimate drew a dovish market reaction last month when it pointed to nonfarm payrolls growth of -9k in October after a downward revised 33k (initially 60k) in September. It was the first negative M/M reading for the Revelio series since May. ADP yesterday reported a -32k drop for private employment in November after a 47k increase in Oct, with today’s Revelio report offering a sense check.
- The Chicago Fed will release its final estimate for the unemployment rate in November, after its advance estimate published Nov 24 pointed to 4.44% in Nov after an upward revised 4.46% in Oct. Accordingly, it has been implying little additional change in the unemployment rate since the 4.44% in the BLS payrolls report for September (which in turn prompted that Oct estimate of 4.46% to have been revised up 4.36% previously). The next BLS u/e rate we’ll get is the November print on Dec 16 – there won’t be an official October figure as the household survey wasn’t able to be conducted.
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US 10YR FUTURE TECHS: (Z5) Trading At Its Recent Lows
- RES 4: 114-02 High Oct 17 and the bull trigger
- RES 3: 113-29 High Oct 22
- RES 2: 113-18+ High Oct 28
- RES 1: 113-03 20-day EMA
- PRICE: 112-26 @ 10:41 GMT Nov 4
- SUP 1: 112-16 Low Oct 30
- SUP 2: 112-14 Low Oct 9
- SUP 3: 112-06 Low Sep 25 and a reversal trigger
- SUP 4: 111-30+ Trendline support drawn from the May 22 low
Recent weakness in Treasuries undermines a bullish theme. The move down has resulted in a breach of the 50-day EMA, at 112-26+, highlighting potential for a deeper retracement near-term. A continuation lower would open 112-06, the Sep 25 low and the next key support. The contract needs to trade above 113-18+, the Oct 28 high to signal a possible bullish reversal. Key resistance and the bull trigger is at 114-02, the Oct 17 high.
EQUITIES: Estoxx Put Spread
SX5E (19th Dec) 5700/5300ps 1x1.5, traded for 109.5 in 5k (5kx7.5k).
NETHERLANDS: Speaker To Meet Party Ldrs In First Step To Forming New Gov't
Speaker of the House of Representatives Martin Bosma will meet with party leaders this afternoon from 16:00CET (10:00ET, 15:00GMT) as the first efforts to form a new gov't coalition begin. The final postal votes were tallied on 3 Nov, the liberal progressive Democrats 66 (D66) securing top spot in the election by 28,455 votes over the far-right populist Party for Freedom (PVV).
- D66 winning top spot is important concerning the process of forming a coalition. It means that their 'scout', likely former Deputy PM Wouter Koolmees, will be appointed by Bosma and from next week will begin to canvass parties on the nature of the gov't they want to see formed. The new parliament convenes for the first time on 12 Nov.
- D66 leader Rob Jetten has stated his preference for a broad centrist four-party coalition involving D66, the centre-left environmentalist GreenLeft-Labour Party (GL-PvdA), the liberal conservative People's Party for Freedom and Democracy (VVD), and centrist Christian Democratic Appeal (CDA). This is the only four-party combination to cross the 76-seat majority threshold that does not include the PVV.
- However, Jetten and D66 face a difficult challenge in getting the VVD on board. Party leader Dilan Yeşilgöz has stated her preference for a centre-right coalition, substituting GL-PvdA with the right-wing JA21. Such a coalition would hold 75 seats, one short of a majority. However, Yeşilgöz claims it would be stable as the opposition (ranging from far-left to far-right) would not be able to unite into a cohesive bloc.
Chart 1. 2023 and 2025 House of Representatives Election Results, Seats
Source: NOS, Kiesraad, MNI
