• U.S. Payrolls Rise 156,000 as Wages Increase Most Since 2009
The U.S. labor market turned in a solid performance at the end of 2016, putting job gains above 2 million for a sixth year as paychecks rose by the most during the current expansion.
The 156,000 increase in December payrolls followed a 204,000 rise in November that was bigger than previously estimated, a Labor Department report showed Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 175,000 advance. The latest data released could be slightly delayed due to inclement weather in the Washington D.C. area, according by Bloomberg.
The jobless rate ticked up to 4.7 percent as the labor force grew, and wages rose 2.9 percent from December 2015.
• The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $45.2 billion in November, up $2.9 billion from $42.4 billion in October, revised. November exports were $185.8 billion, $0.4 billion less than October exports. November imports were $231.1 billion, $2.4 billion more than October imports.
• Factory orders retreated in November, snapping a four-month winning streak, the Commerce Department said Friday. The 2.4% decline was a bit stronger than the 2.3% forecast by economists surveyed by MarketWatch, but it followed an upward revision to October’s gain, taking that to 2.8%.
• The dollar rallied against its major rivals on Friday, turning firmly higher for the week as the latest reading on the labor market underscored the belief that inflation could be poised to return to the market.
• The ICE Dollar Index DXY, +0.79% added 0.7% to 102.26, trading near its highs of the session. With the day’s advance, the index, which gauges the greenback against six rival currencies, turned slightly higher for the week, erasing a 1.1% slump on Thursday.
Against the yen, the greenback USDJPY, +1.42% was trading at ¥117.05, compared with ¥115.34 late Thursday in New York, a move of 1.4%. The rise took the dollar to levels last seen in February 2016.
The euro EURUSD, -0.6977% weakened to $1.0553 from $1.0598 late Thursday.
• The yuan fell 0.4% from Thursday’s close to 6.9185 to the dollar in Asian trade on Friday. On Wednesday and Thursday in the offshore market, the yuan surged 2.5% against the dollar, the latest signs that Chinese authorities are fighting to control the yuan’s descent.
However, some traders suspect was orchestrated by China to shake out large short positions against the currency.
As China works to stem capital flows and stabilise the currency ahead of the Lunar New Year and Donald Trump's inauguration as U.S. president, the offshore yuan rose the previous day to a two-month high against the dollar to mark the largest two-day rise since its inception in 2010.
• China's foreign exchange reserves fell for a sixth straight month in December but by less than expected to the lowest since February 2011, as authorities stepped in to support the yuan ahead of U.S. President-elect Donald Trump's inauguration.
Reserves fell by $41 billion last month to $3.011 trillion, central bank data showed on Saturday, following a drop of $69.06 billion in November.
The yuan depreciated 6.6 percent against the surging dollar in 2016, its biggest one-year loss since 1994, and is expected to weaken further this year despite authorities' latest attempts to slow its descent.
Adding to pressure on the currency, Trump has vowed to label China a currency manipulator on his first day in office on Jan. 20 and has threatened to impose huge tariffs on imports of Chinese goods.
• Sterling fell back against a dollar that was boosted by U.S. labour market data on Friday but still ended the week slightly higher, riding out nerves about the British government's preparations for Brexit talks due to start in March.
Prime Minister Theresa May is expected to try and quash charges of indecisiveness - The Economist's front page this week calls her "Theresa Maybe" - with a speech later this month outlining her central aims for talks with the other 27 members of the European Union.
The Bank of England's (BoE) Chief Economist bemoaned the inherent risks of placing too much faith in economic forecasting given the failure to foresee the financial crash in 2008 as well as the Brexit vote.
However, he reiterated the central banks view that the U.K. economy would suffer in 2017 as a consequence of the country's vote to leave the European Union (EU).
• Oil prices drifted between gains and losses Friday and eventually settled lower, as investors weighed OPEC’s plan to rebalance the market against lingering concerns that other producers may sidestep their share of planned production cuts.
The March contract for Brent crude slipped 4 cents, or 0.1%, to $56.85 a barrel at 4:59 pm ET. The global benchmark was down as much as 1.1% earlier in the day. Prices also briefly traded at new 17-month highs.
The West Texas Intermediate (WTI) benchmark for US crude futures declined 10 cents, or 0.2%, to $54.58 a barrel. Like Brent, WTI traded higher earlier in the session before running into volatility.
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