We expect the Dec’24 NFP headline nos to be another symbol of continued US exceptionalism. We expect the headline NFP no to come at 210k against current market estimates of 160,000. We also expect the unemployment rate to come at 4.3% due to plummeting hiring rates. The median duration of unemployment has climbed steadily throughout 2024, to 10.5 weeks in November – so even without mass layoffs, the ranks of unemployed swell as it’s harder to find work. On AHEs we expect MoM no to cool down to 0.3%. In summary, Dec'24 NFP data is likely to push the long end UST yields higher and DXY higher also. While the short end UST yield upside is capped as anyways rate cuts are priced in (at 39 bps for CY25) even lower than what the Fed DOTS showed in Dec, we expect the 2-10 US SOFR curve to further bear steepen.
