HL commentary as it happens

Brent crude prices dip towards $60

Brent crude oil prices are precariously close to falling through the $60 barrier. A peace deal between Russia and the Ukraine looks to be back on the agenda but there have already been multiple false dawns this year. Even without Russian exports, concerns around Chinese demand as well as increasing production from OPEC+ members and other nations are keeping prices way below the $80 peaks seen earlier this year.

Double dose of US jobs numbers later today

Later on, we'll see official US jobs numbers, which haven’t been seen since before the US government shut down. Non-farm payroll numbers are expected for both October and November, with last month likely to be a cleaner-looking print. Consensus forecasts suggest around 50,000 new hires were made, less than half the 119,000 seen in September, but the range of expectations is much wider than usual.

If recent private jobs data is anything to go by, the risk here is to the downside. With average hourly earnings expected to be up 3.7% on a 1-year view the juggling act for those with the keys to monetary policy also looks increasingly tricky stateside. That’s weighing on sentiment with US stock futures pointing downwards today. If, however, jobs and wage growth comes in weaker than expected, there is a chance that the bears will go back into hibernation on hopes of a more doveish approach by the Fed in 2026.

FTSE opens in the red

The FTSE’s in the red this morning. While the Bank of England is widely expected to bring rates down to 3.75% on Thursday, today’s employment figures raise the question of whether that will be enough to stimulate growth as the UK economy limps towards the new year.

If setters stick to the playbook, rates will be at their lowest level since February 2023, but save for the exceptional circumstances of the coronavirus pandemic, unemployment of 5.1% is now at its highest level since 2016. With wage growth easing only slowly, the headroom for further rate cuts next year looks pretty tight.

Oil steadies after last week’s sell-off

Oil prices steadied in early trading, with Brent crude climbing back to around $61 a barrel after last week’s sharp sell-off, as nerves around global politics outweighed worries about too much supply.

The US turned up the heat on Venezuela by seizing a tanker, adding fresh sanctions, and increasing its military footprint in the region - reminding markets how quickly tensions can disrupt energy flows.

At the same time, traders are keeping an eye on Ukraine peace talks in Berlin, aware that developments could send ripples through the market.

US futures suggest a mini rebound

US markets are trying to find their feet, with futures pointing to a firmer open as dip-buyers step back in, hopeful that a Santa rally can still materialise after Friday marked the S&P 500’s worst session since 20 November.

Attention now shifts to a heavy week of economic data, with a backlog of delayed releases finally hitting the tape following the government shutdown. The spotlight is firmly on Tuesday’s jobs report and Thursday’s inflation print, both of which could sway expectations for when, and how fast, interest rates might come down. Markets are tentatively pencilling in two cuts next year, but we know from history that these predictions can easily change.

UK investors expect a rate cut on Thursday

UK markets have a clear focal point this week, with the Bank of England in the spotlight and a rate cut on Thursday widely seen as a done deal. Markets are pricing in around a 90% chance of a move, so, absent any shocks, the decision itself matters less than the Bank’s tone. Beyond domestic policy, UK assets will also take cues from the flood of delayed US economic data, making this a week where macro forces are firmly in the driving seat.