The US economy added around 64’000 jobs in the latest payrolls report, beating expectations of roughly 50’000 job additions and a clear improvement from the more than 100’000 job losses recorded previously. But the unemployment rate climbed from 4.4% to 4.6%, the highest level since pandemic months and another sign of cooling momentum.

Fed officials have also acknowledged that headline payroll gains may be overstated by around 60’000 jobs per month, meaning future revisions could paint a weaker picture of the labour market.

Average hourly earnings softened, and retail sales disappointed as well — though much of that weakness came from autos and gasoline; strip those out and the picture looks firmer.

Still, taken together, the data was soft enough to support the Fed’s doves if markets had wanted to lean that way. The US 2-year yield — the best proxy for Fed expectations — fell to around 3.45% before rebounding toward 3.50%, suggesting some dovish repricing, but not a wholesale shift.

Equities barely responded. The S&P 500 slipped, small caps fell, while the Nasdaq 100 and tech-led growth stocks eked out modest gains. Frankly, the opposite market reaction would have been easier to explain.

The takeaway seems to be this: the data was weak, but not weak enough to convince investors to materially change their Fed bets or meaningfully increase risk exposure. Markets continue to price around two Fed cuts next year, with close to a 50% probability that the first cut comes by March.

Attention now turns to Thursday’s US inflation data, the final major input into the Fed’s year-end calculus. Slower inflation would give the Fed more room to manoeuvre. Until then, market conviction is likely to remain contained.

For Americans, there is at least one consolation: they’re not British.

The UK jobs data released yesterday was genuinely ugly. Unemployment jumped to 5.1%, the highest level in five years, and the economy has shed around 187’000 jobs over recent months, since around the time of the government’s first post-election budget.

Youth unemployment stands at a troubling 13.4% — a level more commonly associated with economies struggling to absorb their young workforce, not a G7 country.

The one small comfort for the Bank of England (BoE) is that wage growth is cooling, giving policymakers room to cut rates. But lower rates alone will do little to fix a weakening labour market. Fewer jobs mean fewer taxpayers and higher fiscal strain — a worrying dynamic at a time when investors are no longer willing to fund UK debt at bargain yields.

That’s already visible in the market: 10-year gilt yields are pushing higher despite dovish BoE expectations, an uncomfortable and unhealthy combination.

Sterling held up well against both the euro and the dollar yesterday, but that strength looks fragile. A soft growth outlook and a more dovish BoE argue for a weaker currency. This morning’s softer-than-expected UK inflation print reinforces that view and suggests the November-December rebound may be losing steam.

A rare bright spot remains the FTSE 100, heavy with energy and mining names that have performed strongly this year. Gold miners in particular have benefited from the powerful rally in precious metals. Fresnillo rallied around 420% since the start of the year – to make any meme stock trader jealous.

Given the combination of softer Fed expectations, reduced appetite for US Treasuries amid rising debt, and persistent geopolitical stress, the case for higher precious-metal prices remains intact. Silver and platinum are also participating, underscoring the breadth of the move. The rally likely still has room to run.

Oil tells a different story. US crude briefly dipped below $55 per barrel before rebounding on news that Donald Trump ordered a blockade of tankers entering and leaving Venezuela. This is a more significant escalation than last week’s seizure of a single sanctioned vessel, as it directly targets flows from an OPEC producer.

That said, geopolitical spikes in oil prices are often short-lived. Venezuela exports just under 1 million barrels per day, and the global oil market is facing a growing supply glut — potentially around 3.8 million barrels per day into 2026, according to IEA projections. Against that backdrop, the loss of Venezuelan supply is manageable, and the latest rebound could fade once the immediate headlines pass.

I’ll end on a lighter note. Another Chinese chipmaker, MetaX, surged dramatically – by 755% at peak - on its trading debut, echoing the explosive — and short-lived — rallies seen in other recent listings like Moore Threads. These episodes offer a reminder: risk appetite is still alive, especially when it comes to technology and AI-related names.

The broader AI rally may be showing signs of fatigue, but investors remain eager for the next trigger. Fundamentals matter — but for now, dreams still carry more weight. Just look at Tesla, which pushed to fresh highs on renewed robotaxi optimism.