The main highlight of the session was the UK labour market report. The unemployment rate ticked higher to 5.1% vs 5.0% prior as expected with payrolls declining once again. Wage growth, on the other hand, surprised to the upside, which could validate BoE's Greene views that wage setting might have indeed changed.

The UK PMIs showed kind of the same with the commentary citing lacklustre growth, worryingly widespread job losses and renewed upturn in selling price inflation across both goods and services. Rising staff costs were reported as the key concern.for businesses. The pound strenghtened on a slightly hawkish repricing as the total easing for 2026 pulled back from 64 bps to 56 bps.

We had also the Eurozone PMIs which surprised to the downside. The main drag was once again Germany as the French PMIs were better than expected. The data didn't change anything for the ECB though as it's seen on hold well into 2027.

In the American session, it goes without saying that all eyes will be on the US NFP report and nothing else will matter. In fact, despite having also the US Flash PMIs on the agenda, the market will highly likely trade based on the US jobs report.

The November Non-Farm Payrolls is expected at 50K vs 119K prior, while the Unemployment Rate is expected to remain unchanged at 4.4%. The Average Hourly Earnings Y/Y is expected at 3.6% vs 3.8% prior, while the M/M figure is seen at 0.3% vs 0.2% prior.

There's been lots of talk that this report could be noisy as the data collection process was affected by the shutdown. Moreover, Fed Chair Powell said in the press conference that they think job gains have been overstated by 60K in recent months and that they think there's a negative 20K in payrolls per month.

Therefore, the Unemployment Rate will probably be the most important metric to look at in terms of market reaction, but big deviations in payrolls will also catch market's attention.

Source: Investing Live