US TSYS: Sentiment Buoyed After Mixed November Jobs Data
Dec-06 20:10
- Treasuries look to finish near early session highs, curves steeper (2s10s +2.126 at 5.135) with short end rates outperforming after this morning's better than expected jobs gain (+227k vs. 220k est) even as the unemployment rate inched up to 4.2% from 4.1%. On net, the data reinforced the view of a resilient labor market despite gradual cooling - which in turn supported expectations of more rate cuts by the Federal Reserve.
- Steeper post-data curves buoyed projected rate cuts into early 2025 vs. pre-data (*) as follows: Dec'24 cumulative -22.2bp (-17.1bp), Jan'25 -29.7bp (-24.0bp), Mar'25 -46.6bp (-38.6bp), May'25 -56.4bp (-48.1bp).
- Meanwhile, the preliminary U.Mich consumer survey for December saw sentiment firm a little more than expected at 74.0 (cons 73.3) after 71.8. Components were mixed though, with a much stronger than expected increase in current conditions (77.7 vs cons 65.2 after 63.9) at the expense of expectations (71.6 vs cons 77.7 after 76.9).
- Reminder, the Federal Reserve enters their self-imposed blackout at midnight tonight through December 19, the day after the final FOMC policy announcement for 2024. Focus turns to next week's CPI and PPI inflation data on Wednesday and Thursday respectively.
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EURJPY TECHS: Trend Structure Remains Bullish
Nov-06 20:00
- RES 4: 169.20 High Jul 24
- RES 3: 168.01 High Jul 26
- RES 2: 167.40 61.8% retracement of the Nov 11 - Aug 5 bear leg
- RES 1: 166.69 High Oct 31
- PRICE: 165.63 @ 15:55 GMT Nov 6
- SUP 1: 164.26/163.16 20-and 50-day EMA values
- SUP 2: 161.85/161.01 Low Oct 17 / Low Oct 4
- SUP 3: 158.11 Low Sep 30
- SUP 4: 157.05/155.15 Low Sep 18 / 16
The EURJPY trend set-up is unchanged. A bullish theme remains intact and the contract continues to trade closer to its recent highs. Initial support to watch lies at 164.26, the 20-day EMA. Recent gains suggest scope for a climb towards 167.40, the 61.8% retracement of the Nov 11 - Aug 5 bear leg. Clearance of this level would strengthen a bullish theme and open 168.01, the Jul 26 high.
US STOCKS: Post-Election Rally Forges New All-Time Highs
Nov-06 19:58
- Stocks continue to mark new all-time highs late Wednesday - a Trump presidency seen as positive for business, credit risks waning. Currently, the DJIA trades up 1426.58 points (3.38%) at 43649.52, S&P E-Minis up 139.25 points (2.4%) at 5951.5, Nasdaq up 517.7 points (2.8%) at 18956.76.
- Financials and Energy sectors continued to lead gainers in late trade, banks and financial services outperforming: Synchrony +18.41%, Discover +18.16%, Capital One +14.03%. Meanwhile, Goldman Sachs gains 12.94%, Wells Fargo +11.92%, Morgan Stanley +12.32% and JP Morgan +10.55%. Oil & gas services shares continued to support the Energy sector: Baker Hughes +11.35%, Schlumberger +8.87%, EQT Corp +7.81% while Halliburton gains 7.33%.
- Real Estate and Consumer Staples sectors lagged the post-election rally: investment trusts, particularly specialized and Health Care REITS underperformed: Iron Mountain -9.16%, American Tower -7.14%, Public Storage -5.26%. A mix of broadline retail and personal product makers weighed on Staples: Dollar Tree -7.89%, Brown-Forman -4.62%, Colgate-Palmolive -3.9%.
- With over 75% of of the S&P reporting earnings already, a large backlog of earnings announcements expected after today's close include: Corteva, Albemarle, Energy Transfer, Take-Two Interactive Software, Duolingo, Gilead Sciences, APA Corp, McKesson Corp, Williams Cos, Dutch Bros, Match Group, Lyft, Core Scientific, Permian Resources, Zillow Group, Guardant Health, Fair Isaac, QUALCOMM, AMC Entertainment, Coherent, Wolfspeed.
US TSY FUTURES: BLOCK, Dec'24 2Y Buy
Nov-06 19:37
- +5,000 TUZ4 102-23.38, buy through 102-23.12 post time offer at 1431:00ET, DV01 $181,000. The 2Y contract traders 102-23.38 last (-4.5)
