BT Three Minute Markets Update

The US December employment report matched the lacklustre concensus expectation of 7.8% unemployment but the gain in payrolls suggests greater health in the economy.

US weekly initial jobless claims - 360,000 concensus, actual 372,000 increase with a 'strong holiday effect' due to office closures; 4 week average still 360,000. ADP private payrolls December saw an increase of 215,000, well above 140,00 estimate.

US December ISM manufacturing report rebounded from 49.5 of November with concensus expecting 50.5, actual 50.7, just beating estimate and more importantly returning to expansionary territory. However, November construction spending -0.3% against the concensus +0.6%.

A good end to the year! Initial jobless claims forecast to be 360,000 actual almost spot-on at 361,000. December Philly Fed metric expected -3 from November's -10.7, actual was +8.1, revealing the effect Sandy had had. Q3 GDP now +3.1% growth, above consensus +2.8.

November housing starts: consensus was for 872,000 but actual 861,000 - still up 21.6% on an annualised basis and the second-highest figure since July 2008. Permit activity increased 899,000 (868,000 in October).

US third quarter current account deficit $107.5bn (2.75% of GDP), lowest since Q4 2010; wider that concensus but $10.6bn narrower than the revised Q2 deficit.

December Empire State manufacturing report: -5.2 in November, consensus hoping for -1, actual -8.1 but this regional report is not reflected nationally.

Markets consolidated overnight due to the fiscal cliff impasse; Euro finance minsters released 41.1bn euros for Greek bail-out. FTSE -0.3%, S&P -0.6%

NFIB Small Business Confidence Report for November was sadly lacking in confidence, lowest sinch March 2010.

NFIB Small Business Confidence Report for November was sadly lacking in confidence, lowest sinch March 2010.

November non-farming payrolls +146,000, mainly in retail. Unemployment came in at 7.7%, concensus chasing the 7.9% figure from last month but it was driven by a 2% decline in participation even though the payrolls were up.

Initial jobless claims for the week ending December 1 declined 25,000 to 370,000, concensus expecting 380,000, so the Hurricane Sandy distortion behind us.

We'll open up after a good night - FTSE +0.4%, DAX +0.3%, US: S&P +0.2%, Dow +0.6% after a mixed session - strong rally in China, Chicago ISM good except for employment.

We should start +0.25% despite no major economic news; fiscal cliff or greek debt: FTSE and DAX flat, Dow -0.1%, S&P -0.2%. AUD rose to 104.7 US cents despite the Reserve rate cut, and there's probably going to be another one.

November manufacturing ISM 49.5, down from October's 51.7, concensus expecting 51.4, lowest since July 2009, with employment and inventories most alarming.