US non-farm payroll report will be a major focus before the first full week of 2021 is wrapped up. Markets are expecting non-farm payrolls to grow 100k in December. Unemployment rate is expected to edge up to 6.8% while average hourly earnings are expected to rise 0.2% mom.
Looking at related indicators, ISM manufacturing employment turned back into expansion at 51.5 in December, up from 48.4. ISM Services employment, however, dropped back to contraction at 48.2, down from 51.5. ADP employment showed a contraction of -123k jobs. Four-week moving average of initial jobless claims rose nearly 100k to 837k.
The NFP result will more likely disappoint market expectations than not. Nevertheless, traders could still look through the set of “old” data to the policies of the new administration. A focus would be on whether 10-year yield could extend this week’s powerful rally, and whether that could help set up a sustainable Dollar rebound.
