- Australia November employment -21.3K vs +20.0K expected
- Mexico approves tariffs as high as 50% taiff on Chinese and Asian imports
- UK RICS house price survey -16 vs -21 expected
- New Zealand Q3 manufacturing sales +1.1% vs -2.9% prior
- Japan Q4 business survey index +4.7% vs +3.8%
- RBC forecasts gold to average $4,600 in 2026 and hit $5,100 in 2027
- Shares of Oracle fall 10% the questions about AI spending continue
Markets:
- Gold down $15 to $4212
- US 10-year yields down 4 bps to 4.12%
- WTI crude oil flat at $58.45
- S&P 500 futures down 53 points or 0.8%
- JPY leads, AUD lags
The Australian dollar struggled after a soft jobs report. The unemployment rate managed to hold steady but only because of a three-tick drop in the participation rate. AUD fell about 20 pips on the headline but that was the extent of that move.
The continued selling in AUD after that came on generalized risk aversion and an unwind of the post-Fed trade. After the decision, the US dollar sold off and stock markets rallied. The move in stock markets has been completely erased and the dollar is rebounding. The equity selling was helped along by a bad post-earnings reaction in Oracle shares, which are down 11% and nearly 50% since their prior earnings spike.
The theme around AI overspending and profitability isn't going away and will likely nag markets throughout the year ahead.
Neither will tariffs and Mexico made an interesting move by blocking off much of its Asia imports via tariffs. That sets up a potential negotiation with the US to create a bloc and replace Chinese low-cost goods.
Other moves saw silver hit as high as $62.88 as that rally continues. But the profit taking quickly unwound the gains on the day and gold is down modestly.
