US jobs data, Eurozone inflation, Lula ministerial meeting and other market highlights today

US futures indices traded slightly higher on Friday (6), ahead of the release of nonfarm payrolls data for December, which will be closely watched by the Federal Reserve in its decisions to control inflation. The Refinitv consensus forecasts the creation of 200,000 jobs in December.

A better-than-expected report would point to a resilient labor market, which could mean the US Federal Reserve needs to go further in its efforts to contain inflation.

European stock markets, on the other hand, trade mostly on the upside as investors reverberate the release of inflation data from the euro zone, which was below expectations.

In Brazil, on a day when the agenda of indicators is empty, attention continues to focus on political news. President Luiz Inácio Lula da Silva will attend the first ministerial meeting of the new government at 9:30. The meeting aims to align speeches between members of the government.

It is worth mentioning that the main index of the Brazilian Stock Exchange closed on Thursday (5) at a high of 2.19%, at 107,641 points, in its second session of expressive gains after falling by about 5% in the first two sessions of trade of the year.

1. World Scholarships

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US futures indices are trading slightly higher this morning, erasing part of the previous day’s losses, as investors await new data from the US labor market.

On the eve, Wall Street stocks closed in the red, with a rise in US private sector jobs well above the consensus of Refinitiv, which aimed for 150,000 jobs.

This morning, investors await the release of the payroll report, which serves as a yardstick for the Fed’s decision-making process on the direction of the country’s monetary policy.

See how the futures markets performed:

• Dow Jones Futures (US), +0.12%
• S&P 500 Futures (US), +0.10%
• Nasdaq Futures (US), +0.03%

Asia

Asian markets closed higher, with the exception of Hong Kong’s Hang Seng, after a US labor market survey the day before suggested that the US Federal Reserve should make further rate hikes to contain inflation.

The Hang Seng Index trimmed its gains and closed lower as China signaled further supportive measures for its real estate sector ahead.

• Shanghai SE (China), +0.08%
• Nikkei (Japan), +0.59%
• Hang Seng Index (Hong Kong), -0.29%
• Kospi (South Korea), +1.12%

Europe

Most European markets traded higher on Friday, with investors reflecting euro zone inflation data. Preliminary data showed an annualized gain of 9.2% in December, below Refinitiv’s estimate of 9.7% and 10.1% in November.

Earlier, France, Germany and Italy reported longer-than-expected inflation slowdowns over the course of the week, leaving investors confident that inflation has passed its peak in the common currency bloc.

A slowdown in the inflation rate could pave the way for the European Central Bank to moderate its cycle of monetary policy tightening.

However, according to analysts interviewed by CNBC, this should not lead to a change of tone of the European Central Bank. Interest rates “will reach 3 (%) and probably have to hold up for the whole year, even if the recession becomes more and more evident,” Hetal Mehta, of Legal & General Investment Management, told the portal.

Carsten Brzeski, global head of macro at ING Germany, said December’s numbers “are not a relief, just a reminder that eurozone inflation is still primarily an energy price phenomenon.”

Energy costs have decreased in Europe in recent months. Natural gas prices traded at around 72.42 euros per megawatt-hour on Friday, well below August’s peak of 349.90 euros per megawatt-hour.

• FTSE 100 (UK), +0.39%
• DAX (Germany), -0.20%
• CAC 40 (France), +0.03%
• FTSE MIB (Italy), +0.08%

Goods

Oil prices rose and extended gains on the eve after data pointed to lower US fuel inventories following a winter storm late in the year.

Inventories of distillates, which include diesel and heating oil, fell more-than-expected in the week ending December 30. They lost 1.4 million against expectations for a drop of 396,000 barrels.

Meanwhile, U.S. gasoline inventories fell by 346,000 barrels last week, according to EIA data, compared with analysts’ expectations for a drop of 486,000 barrels.

Iron ore prices in China have rallied again after recent declines due to Covid concerns in China. The commodity price moved higher on Friday on optimism surrounding China’s stepping up political support for the domestic real estate sector, but lingering concerns over local Covid-19 outbreaks kept the ore on track to a weekly decline.

• WTI crude oil, +0.14%, to 73.77 dollars a barrel
• Brent Crude, +0.10%, to 78.77 dollars a barrel
• Iron ore traded on the Dalian Stock Exchange rose 1.85% to 855.00 yuan, or $124.65

bitcoins

• Bitcoin, -0.36% to $16,791.63 (24 hours ago)

2. Schedule

The week ends with the release of official data on the US labor market and wages, closely monitored by the Federal Reserve in its decisions to control inflation. Refinitiv’s consensus forecasts the creation of 200,000 jobs in December. The average of the market projections also indicates an unemployment rate maintained at 3.7% and wage growth of 0.4% compared to November.

Brazil

8 am: PGI-DI index

United States of America

10:30: Payroll Employment Report

12:00: Orders to industry

12:00: PMI ISM

1:15pm: Speech by Fed Chair Lisa Cook

2:15pm: Speech by Fed Chairman Thomas Barkin

3pm: Baker Hughes equipment count

5.30pm: Speech by Fed Chairman Raphael Bostic

3. Economic news

The new transport minister outlines a 100-day investment plan

After investment fell to its lowest level in history, Transport Minister Renan Filho took office with R$20 billion to spend on transport infrastructure, more than triple the amount in recent years.

In his first interview after taking office, he said that his predecessor, the governor of São Paulo, Tarcísio de Freitas, delivered the roads in “worse conditions than he received” and anticipated that he would announce on the 16th a action plan for the 100 days, which include the resumption of all the paralyzed works, the repair of roads for the transport of the crop, the preparation of the roads for the rainy season and the strengthening of the emergency response.

Renan Filho also defended a new fiscal framework that would allow for an increase in priority investments. “The big challenge is to have a broader discussion to ensure fiscal sustainability in the medium to long term.”

It means increasing investment

In an interview with Valor, Civil House prime minister Rui Costa defended the predictability of the current government, which would seek ways to pragmatically expand international investment and PPPs. As for the postponement of fuel tax cuts, it was clear that the government’s decision was to avoid an inflationary peak at the very beginning of the mandate.

Costa also highlighted the discomfort with the current level of interest caused by fiscal uncertainties. And the additional BRL 150 Bolsa Família for children up to 6 years must be paid only after the re-evaluation of the Single Registry, which can take up to 90 days. It is worth mentioning that, for each month without this payment, R$1.5 billion is not spent.

4. Political news

The government holds its first ministerial meeting today

President Luiz Inácio Lula da Silva concludes the first week of his government with a meeting of his group of ministers this Friday. The meeting begins at 9:30, at Palazzo Planalto and, according to the president himself, “there is only time to begin”.

In a video released by his office, the minister of institutional relations, Alexandre Padilha, said that the meeting was meant to be a moment of welcoming new members of the top federal government. “President Lula made a point of convening this meeting with all of them, welcoming these ministers and starting the government,” he said.

Covid

Brazil recorded this Thursday (5) 183 deaths from covid-19 in the last 24 hours, for a total of 694,625 since the start of the pandemic.

With that, the rolling average of deaths over the past 7 days is 120. Compared to the average 14 days ago, the change was -22%.

In total, the country recorded 28,049 new Covid-19 diagnoses in 24 hours, completing 36,456,156 known cases since the start of the pandemic.

The operator Oi (OIBR3) informed that the General Superintendency of the Administrative Council for the Defense of Competition (CADE) approved, this Thursday, the sale of shares representing the entire share capital of Lemvig RJ Infraestrutura e Redes de Telecomunicações SA (SPE Torres 2) to NK 108 Empreendimentos e Participações, an affiliate of Highline do Brasil, without restrictions.

The approval provision will become definitive within 15 calendar days, counted from its publication, in the absence of an appeal by the interested third parties or the revocation of the Transaction by the CADE Administrative Court.

PRIO’s daily production reached 47,621 barrels of oil equivalent in the fourth quarter of 2022, an increase of 4.1% from the third quarter of 2022.

The company had a daily production of 40,470 in cumulative 2022.

The Board of Directors of Taesa (TAEE11) has approved the distribution of interim dividends for the year 2022 in the amount of R$ 460 million, equivalent to R$ 0.4450909139 per share or R$ 1.3352727417 per Quota, with ex-dividend date 11 January 2023 and payment date 23 January 2023.

(With Estadão, Reuters and Agência Brasil)

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