EU CREDIT SUPPLY: National Australia Bank (NAB): Allocations

Going back to other weak/mixed notes from November's Household Survey:

• Those working part-time for economic reasons rose 909k over the 2 months to November, easily the highest for a 2-month  period since the pandemic (the preceding 8-month average had been +13k), though we'd guess this is at least partly related to the federal government shutdown.
• And the demographic breakdown was extremely mixed, suggesting potential quirks driven by the unusual survey: White unemployment ticked up 0.1pp to 3.9% and fell 0.8pp for Asian (3.6%) and 0.5pp for Hispanic/Latino Americans (5.0%), but the Black/African American rate jumped 0.8pp to 8.3%.
• Additionally, for adult men the unemployment rate rose 0.1pp to 4.1%, but for women it fell 0.1pp to 4.1%. Unemployment by education was mixed, with all those with a high school diploma or higher seeing a higher unemp rate vs September.
• We could go on with the various biggest caveat of all is that October's household survey was not conducted due to the federal government shutdown and there were multiple caveats provided with the release. As BLS noted the day before the release, the November Household survey has higher-than-usual standard errors due to "multiple reasons: lower survey response, composite weighting changes, and the use of a 2-month period of analysis rather than a 1-month period", which meant that the unemployment rate "required a 0.26 percentage point change to be statistically significant compared with a required change in September of 0.21 percentage point".
• That alone suggests a higher bar to interpreting the November estimate of the U/E rate rise literally, though clearly it remains in an uptrend overall.
• However the report also confirms that federal government workers were counted as employed in November's survey as they returned to work in the reference week. However, "It is not possible to precisely quantify the effect of the federal government shutdown on household survey estimates for November."

• RES 4: 1.4140 High Nov 5 and a key resistance   
• RES 3: 1.4051 High Nov 28 
• RES 2: 1.3906 20-day EMA  
• RES 1: 1.3872 High Dec 10  
• PRICE: 1.3733 @ 14:52 GMT Dec 16
• SUP 1: 1.3727 Low Sep17
• SUP 2: 1.3682 76.4% retracement of the Jun 16 - Nov 6 bull cycle
• SUP 3: 1.3637 Low Jul 25
• SUP 4: 1.3576 Low Jul 23  

A bear theme in USDCAD remains intact, reinforced by the recent bearish extension. The move down maintains the current price sequence of lower lows and lower highs and signals scope for a test of 1.3727 next, the Sep 17 low. Initial firm resistance to watch is 1.3906, the 20-day EMA. Short-term gains would be considered corrective and would allow an oversold condition to unwind.

• Treasury futures bounced off lows briefly - following lower than expected S&P Global flash PMIs.
• Block buy just ahead of the release: +7,000 TUH6 104-11.75, buy through 104-11.62 post time offer at 0943:00ET, DV01 $278,000. The contract trades104-11.62 last (+.5).
• Currently, TYH6 trades 112-10 (+0) vs. 112-06 low / 112-22.5 high.
• Curves steeper but off highs: 2s10s +1.203 at 67.872 vs. 69.086 high (new multi year high last seen Jan 2022)  5s30s +.706 at 112.759.
• Bbg US$ index lower: BBDXY at 1202.82 -3.22.