Analysis: Nonfarm Payrolls vs. Tariff Ruling in Direct Showdown, Venezuela is Just Background Noise

Odaily According to the median forecast of economists, the U.S. economy is expected to have added 73,000 jobs last month, up from 64,000 in November, while the unemployment rate is projected to drop from the previous 4.6% to 4.5%. The ADP private-sector employment report ("small nonfarm payrolls") will be released on Wednesday, two days ahead of the government data, but it is generally not considered a reliable leading indicator. Additionally, the U.S. Supreme Court may issue a ruling on the legality of Trump's global tariffs on Friday—the same day the December nonfarm payrolls report is released—which could also have some impact on the market.

"Trading in interest rates and credit instruments depends on U.S. growth, inflation, and the Fed's next moves," said Vincent Ahn, portfolio manager at Wisdom Fixed Income Management in Plano, Texas. "That's why events like Friday's jobs report are far more important to the Treasury market than Venezuela. Venezuela only enters the market's view if it leads to sustained oil price volatility, which then affects gasoline prices and inflation. Currently, the market is not seeing that."

In other words, "Venezuela has failed to impact the bond market because it hasn't changed the inflation narrative," Vincent added in an email to MarketWatch. (Jin10)