Just one day before the all-important nonfarm payrolls and unemployment numbers, markets are decidedly looking sour this morning after another mixed session yesterday.
A little more than one hours before the opening bell, Dow futures are off by 28 points to 10,491 and S&P 500 futures are trading 3.75 points lower to 1,129.25.
Commodities are also weaker with WTI Crude oil down 76 cents to $82.42 per barrel, and Spot Gold down $8.85 to $1129.55.
“China’s central bank raised the yield on its 3-month bill auction, triggering some fear over further tightening down the road,” noted Robert Kavcic from BMO before the bell. “As a result, commodity prices are also under pressure with oil, copper and gold all down, while natural gas is bucking the trend, holding steady as temperatures remain cold in much of the Eastern U.S.”
Lastly, with risk off the table the US$ index is stronger this morning. Fears that China will soon start tightening monetary conditions is contributing to greenback strength, as are comments from Japan’s new finance minister, who on the first day of the job mentioned that he would like the yen to weaken “a bit more.”
Key Events Today:
8:30 ― With just a day before the release of December’s nonfarm payrolls employment report, the Jobless Claims survey is sure to get a lot of attention. But the reality is that the data can’t say much for a few weeks; the holiday period simply skews data too much.
“The weekly data are deeply unreliable over the holidays, and you should be ready for anything over the next couple of weeks,” said Ian Shepherdson from High Frequency Economics. “Claims have dropped sharply in the past two weeks, by a total of 48k, and that pace is simply unsustainable.”
The consensus view is for the seasonally-adjusted number of claims will be 440k, more than the prior week’s 432k figure.
11:00 ― Treasury announces 10-year TIPS, 3s, 10s and 30s debt auction supply
1:00 ― Tom Hoenig, president of the Kansas City Fed, speaks on the economic outlook at the Central Exchange in Kansas City.
