Forexlive Americas FX news wrap: Initial jobless claims drop, USD stays strong

• US initial jobless claims 201K vs 218K estimate
• US December ADP employment +122K vs +140K expected
• FOMC Minutes: Participants saw gradual move to more-neutral stance if data as expected
• Fed’s Waller: Will support further cuts in 2025 but pace will depend on inflation progress
• More from Waller: Some of ongoing services inflation may represent lagged wage increases
• US November wholesale inventories -0.2% vs -0.2% expected
• US consumer credit falls $-7.49 billion versus $10.5 billion estimate
• U.S. Treasury auctions off $22 billion of 30 year bonds at a high yield of 4.913%
• Yellen: We haven’t seen too much progress on inflation in the the past couple of months
• EIA weekly US crude oil inventories -959K vs -184K expected
• Quantum computing stocks crater after Nvidia’s Jensen Huang pours cold water prospects
• The angst is rising in the UK as 10-year yields hit the highest since 2008

Markets:

• Gold up $13 to $2662
• US 10-year yields flat at 4.68%
• WTI crude down 93-cents to $73.32
• S&P 500 up 0.2%
• USD leads, GBP lags

The US dollar finished as the top performer once again today. In the bigger picture, the market is getting increasingly anxious about Trump taking office and placing tariffs. With the whole world as a target, the only safe place is the US dollar. The rhetoric isn’t going to get any quieter, including after Trump takes office.

The pound was the big loser on the day but the selling all took place before US hours. The catalyst was a blowout in gilt yields to the highest since 2008. Stops were hit below 1.2450 as the pound fell to the lowest since April. There was a slight recovery in North American trading as the US dollar drifted modestly lower across the board.

Economic data was mixed with the ADP number a negative for employment while jobless claims dropped. The Fed Minutes were largely ignored but Waller offered up comments that were more dovish than expected, highlighting that he believes rate cuts will continue. That runs counter to the global bond market, which is either pricing in higher inflation, higher US deficits or some kind of trade uncertainty.

In general, the FX moves in US trading were small as the dollar drifted slightly lower. Stocks and commodities were volatile though and bitcoin dipped sharply at one point before recovering. Eyes are increasingly fixed on fixed income but the 30-year sale with a 0.7 bps stop through today provided some relief.

Reminder that Thursday is something of a holiday for US market’s due to Jimmy Carter’s funeral and Friday is non-farm payrolls.

This article was written by Adam Button at www.forexlive.com.