Please note that the Morning Minutes will not be issued on Monday, they should return on Tuesday December 6.
Stocks and commodities have turned sharply downward in the last few minutes following the release of the monthly Nonfarm Payrolls report for November. US index futures have gone from essentially flat to down 1.2 to 2.3% on the news with the NASDAQ leading the way lower.
Headline payrolls increased more than expected (263K vs street 200K), and last month’s payrolls were revised upward to 284K from 261K. More importantly, average hourly earnings (wage inflation) came in much hotter than expected (5.1% vs street 4.6% and previous 4.9%), meaning that even if the Fed were to slow the pace of interest rate increases, it may have to move up the terminal/peak rate for this hiking cycle. Canadian job growth also came in stronger than expected (10.1K vs street 5.0K) but wage inflation was steady (5.4% vs previous 5.5%).
The US 10-year treasury note yield has jumped from near 3.5% toward 3.6% on the news, igniting a rally in the US Dollar and a retreat in commodities. Currency trading now finds Gold, the Euro, the Pound, and the Australian Dollar all down about 0.75% and the Canadian Dollar down 0.4%. In commodity action, Copper is down 1.2%, Platinum is down 3.3%, Natural Gas is down 2.0% and WTI Crude Oil is up 0.5%.
