5 Five Things You Need to Know to Start Your Day

Good morning. Investors are nervy on jobs day, China hints at more support and the yen ends a stellar week on a volatile note. Here’s what’s [View in browser]( [Bloomberg]( Good morning. Investors are nervy on jobs day, China hints at more support and the yen ends a stellar week on a volatile note. Here’s what’s moving markets.  —[David Goodman]( Nervy jobs day Stocks and US futures [kept to narrow ranges]( before (yet another) pivotal jobs report on Friday. Economists say payrolls probably grew by 183,000 last month, after increasing 150,000 in October, while the unemployment rate held steady at 3.9%. Still, a number of other labor market reports this week, including job openings data and the ADP private survey, have pointed to some weakness, amping up bets on Fed rate cuts next year. This may leave some positioned for another soft reading this morning. More China support There were [more signs of potential support]( for the Chinese economy on Friday as the nation’s Politburo — the top 24 leaders of the Communist Party -- pledged to strengthen the government’s fiscal measures and make monetary policy more effective. While no new policies were announced, the meeting, chaired by President Xi Jinping, said fiscal policy will be stepped up “appropriately.”  Meanwhile, it said monetary policy should be flexible, appropriate, targeted and effective, with the previous wording describing it as “forceful” crucially dropped from the statement. Yen speculation Jobs data aside, the big theme of the week in currency markets has been the yen, which has been on a tear as traders speculate about a shift away from negative rates by the Bank of Japan. The currency [fluctuated on Friday](, as an initial jump faded over the course of the Asian trading session. Investors are[braced for more wild swings](, but for now the yen remains the best performing performing major currency this week, and the third best of more than 150 tracked by Bloomberg. ECB collision course The European Central Bank might be on a [collision course](with markets, with economists warning the bank won’t lower interest rates as soon or as sharply as investors think. A Bloomberg survey today showed analysts expect officials to maintain keep rates unchanged until June and cut just three times in 2024. Investors see almost 150 basis points of cuts next year, kicking off as early as March. No holiday slowdown There’s going to be no let up in the pace of news next week, even as we get closer to the holiday season. The Fed, ECB and BOE are among those due to announce their latest policy decisions, with, as[Bloomberg’s Anna Edwards points out]( on our Markets Today blog, rates for 60% of the global economy set to be decided in a 60-hour window. While no change in rates is expected by the big three mentioned above, the meetings will help set the tone of 2024. As that ECB survey shows, the divergence between central banks and markets looks set to be a big theme. Traders[are pricing in a year of sharp rate cuts](, despite more hawkish rhetoric from policy makers. Something’s got to give... What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - UK supermarket Sainsbury’s heads for its[best year since 1992](. - The world’s richest families [added $1.5 trillion in wealth this year](. - One of the biggest US public pensions [lost most of its private equity team](. - France readies [new push to lure banks and funds to Paris]( - John Authers asks if the BOJ is ready [to kill the Widowmaker trade](. - [The record rush to buy a Rolex]( or a Patek Philippe is over. - The new World Bank leader has the [climate crisis on his agenda.]( And finally, Kristine explains why boring is best for stocks when it comes to jobs data For bond markets, a boring jobs day could spell disaster. For stock markets, it's the best-case scenario. With markets bracing for at least five quarter-point cuts to US interest rates over the next year and 10-year Treasury yields trading near the lowest in three months, there's a sense that fixed income investors have gotten ahead of themselves in pricing lower borrowing costs. The latest jobs figures are forecast to show hiring picked up to 183k in November, though that would be on the lower end of this year's prints. It's a moderate, rather than accelerating, slowdown in hiring, which could well be the final straw that breaks the Treasuries bull run's back. That's especially true when some in the market -- for instance, JPMorgan's clients -- are sitting on the largest net long positions in nearly a month. The trouble for bond bulls is that the rate-cut scenario they're pricing is consistent with a hard-landing environment that just isn't being borne out by the current set of data. Outside of the Covid pandemic, the last two instances where the Fed pivoted on policy -- in 2007 to 2008 and in 2001 to 2003 -- coincided with the beginning of at least a year of negative payrolls prints. The Fed has a history of being slightly behind the curve on policy shifts, turning only when it's staring a pronounced labor market deterioration right in the eye. And if it finds itself in a situation where it's delivering the kind of rate cuts rates traders are currently pricing, then we're already in trouble. The good news for equities is that the current trend in the labor market is more consistent with a soft landing narrative. Our colleagues on Bloomberg Intelligence observed this week that recent communication from US policymakers has "become less hawkish, yet not more dovish," signaling that while rates may stay elevated for a while, the era of hikes is behind us. In other words, it's an environment ripe to keep the stock rally going -- at least until the jobs data signal it's time for the Fed to start cutting rates. [Kristine Aquino]( is managing editor for Bloomberg Markets Today. Follow her on X at [@krisaqnews](. Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Tell us what you want to see in the Five Things newsletter! Please [take our quick survey here.]( [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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