Macro Roundup (Jan 9)

SHANGHAI, Jan 9 —This is a roundup of global macroeconomic news last Friday night and what is expected today.

The dollar fell on Friday after U.S. jobs data showed a strong, but not blockbuster employment picture in December, while a separate report showed that U.S. services industry activity contracted for the first time in more than 2-1/2 years that month.

Employers added 223,000 jobs in December, more than economists’ forecasts of 200,000.

Wages also grew 0.3% last month, less than the 0.4% in November and below forecasts of 0.4%. That lowered the year-on-year increase in wages to 4.6% from 4.8% in November.

The dollar fell 1.17% on the day against a basket of currencies to 103.88, after reaching 105.63, the highest since Dec. 7.

The euro gained 1.19% to $1.0645 and was on track for the biggest percentage daily increase since Nov. 11. The dollar fell 1.03% against the Japanese yen to 132.07.

Stock futures inched higher in overnight trading Sunday after the major averages notched their first big rally of the new trading year.

Futures tied to the Dow Jones Industrial Average gained 37 points, or 0.11%, while S&P 500 and Nasdaq 100 futures added 0.16% and 0.25%, respectively.

The overnight moves followed Friday’s first major market rally of 2023. The Dow surged 700 points, or 2.13%, while the S&P 500 and Nasdaq Composite added 2.28% and 2.56%, respectively, after the December jobs report signaled that inflation may be easing.

Nonfarm payrolls came in slightly higher than expectations, but wages increased at a slower pace than expected. That, and data showing a contraction in the services sector, heightened hopes that the central bank’s rate hikes are accomplishing their goal.

Friday’s payrolls report and news of layoffs across industries suggest that the labor market is softening, but the economy may have more work to do, according to Rick Rieder, BlackRock’s chief investment officer of global fixed income.

Oil prices were little changed on Friday as the market balanced a weaker U.S. dollar and mixed U.S. jobs reports, but both crude benchmarks ended the first week of the year lower due to global recession concerns.

Brent futures fell 12 cents, or 0.2%, to settle at $78.57 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 10 cents, or 0.1%, to settle at $73.77.

For the week, both Brent and WTI were down over 8%, their biggest weekly dives to start the year since 2016. Both benchmarks had gained about 13% during the prior three weeks.

Gold prices shot up over 1% on Friday to seven-month highs as Treasury yields and the dollar fell after U.S. economic data cemented expectations of a less-hawkish Fed.

Spot gold jumped 1.9% to $1,867.18 per ounce by 1:43 p.m. ET, their highest since June 13 last year. Prices have gained about 2.1% so far this week, the most since the week of Dec. 2.

European markets climbed on Friday as investors digested key euro zone inflation data and December’s U.S. jobs report.

The pan-European Stoxx 600 index closed 1.1% higher provisionally, marking a 3.4% rise for the week — its best performance since mid-November.