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Congress Passed a Spending Bill To Avert Government Shutdown Before Christmas Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Fri Dec 08 17 01:28 ET

As the last-minute decision, the House voted 235-193, and the Senate voted 81-14 an hour after, to pass a stopgap spending bill, allowing the government to continue running until December 22. US dollar firmed against major currencies with the exception of the euro and sterling. The DXY index added +0.19% for the day. US Treasury yield curve was less flat as 2-year yield slipped -1 while 10-year yields gained +3 points for the day. Wall Street moved modestly higher ahead of the nonfarm payrolls report, with both the DJIA and S&P 500 indices adding +0.29% at close. In the commodity sector, crude oil prices rose two main oil unions in Nigeria threatened to strike from December 18. Short covering is certainly another reason for the rise in oil prices. The front-month WTI crude oil contract gained +0.3% and settled at 56.69 while the Brent contract was up +1.6% to close at 62.2 on Thursday.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), a major oil union in Nigeria, called for a strike on December 18, in response to the "mass sacking" of workers that have joined the union. PENGASSAN urged the government to force the companied to hire the fired workers again, while the government pledged that it would resolve the matter "as soon as possible". Nigeria is the biggest oil producer in Africa. While an OPEC member, it has been exempted from participating in the oil output deal to curb production, due to the fact the country's oil facilities had been destructed by militants for years. At the OPEC/ non-OPEC meeting late last month, the African producer, however, agree to cap its output at 1.8M bpd.

The focus today is undoubtedly the US employment report for November. The market expects nonfarm payrolls to have added +200K in November, following a +261K addition a month ago. the unemployment rate probably stayed unchanged at 4.1%. Meanwhile, average hourly earnings might have risen +0.3%, after a flat reading in October. However, downside surprises are not impossible, in particular after disappointments from several job market data released earlier this week. Challenger estimated that the number of job cuts jumped +20.1% y/y in November, after a -3% decline in the prior month. Meanwhile, the ISM non-manufacturing index surprisingly dropped -2.7 points to 57.4 last month, with all other indices in the report reporting decline. On a positive note, initial jobless claims surprisingly dropped to 236K in the week ended December 2, from 238K a month ago. The market had anticipated an increase to 241K for the month. As such, the 4-week moving average was brought to 241.5K. Continuing claims decreased -52K to 1 908K in the week ended November 29.

Released earlier today in Asia, Japan's GDP growth was revised higher to +0.6% q/q in 3Q17, from previous estimate of +0.3%. This came in better than expectation of +0.4%. Separately, the labor cash earnings grew +0.6% y/y in October, missing expectations of +0.8% and September's +0.9%. In China, trade surprise widened to US$ 40.2B in November, from US$ 38.2B a month ago. The market had anticipated a narrowing to US$ 34.9B.


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