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What to Watch: Latest Employment Data

US TSYS

Tsys trading mildly higher for the most part, 2s little weaker following recent 2s10s flattener block, current levels inside narrow overnight range on moderate volumes (TYH3<280k). Yield curves continue to extend inversion/unwind late 2022 steepening, 2s10s currently -2.249 at -69.522 vs. -70.455 low.

  • With little react to Wed's Dec FOMC minutes (ongoing hikes "appropriate"), focus turns to APD private employ data (150k est vs. 127k prior) at 0815ET, headline NFP data (+200k est vs. +263k prior) Fri at 0830ET.
    • SocGen see nonfarm payrolls rising a strong 245k (cons 200k), down from earlier months but above 125k-150k per month and exceeding trend growth in labor force; unemployment rate holding at 3.7%, with turn from lows of 3.5%, if sustained, faster than they anticipated.
    • JPMorgan expect nonfarm payrolls growth of 200k in Dec (cons 200k) of which 175k comes from private industries; continued signs of strength in the labor market and strong labor demand, albeit softest month of job gains in 2022.

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