Market focus shifts to CPI, while Brent crude slips below $60

The first US labour market report since the US government shutdown was a highly anticipated market event. In the end, it was mostly inline with expectations. The NFP number was 64k for November, slightly higher than the 50k expected. The unemployment rate was higher at 4.6%. The 3-month average for payrolls was -8k, however, this data could be distorted by the government shutdown and the delayed effects of DOGE federal jobs cuts earlier in  the year.

US labour market continues to cool

Overall, the first Labour market reading for the last two months suggests a continued cooling in the jobs market. Looking a bit deeper into the data, and the picture is slightly more concerning. Out of the 11 sectors measured in the NFP report, only three of them generated jobs last month, including construction, professional services and health and education services. If it had not been for the health and education sector, the US would not have had a positive payrolls reading.

Narrowing in US jobs growth concerning

Elsewhere, tech and finance jobs registered small declines, while retail and hospitality also lost jobs. A narrowing in jobs growth is never good, so we need to see if this trend continues or if there is a global wave of job losses as we move into the second half of the 2020s.

The immediate market impact from this report has been a weaker dollar, bond yields are also down, but they have picked up from their lows, while US stock markets are continuing with their recent trend and are in the red. The market is still expecting 2.3 rate cuts from the Federal Reserve for 2026, and today’s slightly stronger NFP number has not caused market-based expectations to fall back in line with the FOMC’s own assessment that rates will only need to be cut once next year.

CPI now the key focus for investors

The focus has now shifted to Thursday’s CPI report, which is expected to show core and headline inflation at 3% and 3.1%, respectively. Although this is well above the Fed’s target rate, at this level it would suggest that inflation remains stable, and it would also add to the view that tariffs have not caused a spike in inflation, yet.

Oracle stocks stabilize as the oil price plunges

In the US the tech stock sell off  has paused, and Oracle is higher by more than 1.5% in early trading. The index is being dragged lower by a decline in energy stocks after a sharp sell off in the oil price. WTI and Brent crude oil are both lower by more than 2.5% so far today.

Brent falls below $60 as supply glut fears grow

Brent crude is now below $60 per barrel, as the market looks through news that Europe has scrapped its ban on combustion engines for cars and is instead focusing on an expected surplus in the oil market, and signs that supply is outstripping demand in the Gulf and in the US. Middle Eastern crude prices are now in a bearish contango pattern, where spot prices are significantly lower than futures prices. When this happens, expectations are that future prices will fall back towards spot price levels, which can aggravate price declines.

Price concerns grow: will Opec +  prop up oil

The prospect of an end to the war in Ukraine and continued strong production from Opec+ is also weighing on prices. Even though US growth has been upgraded for 2026, this is not filtering through to a stronger oil price. Until we get a clearer demand picture or supply restraint from Opec +, it is hard to see how the oil price will recover. In the short term, a close below $60 for Brent today would be a bearish development that could weigh on the oil price further, but it may also make the market more hopeful of major global central bank rate cuts in 2026.