As we approach the December jobs report, the dollar exhibits strength. Following a decline at the end of the previous year, it has rebounded in the current week. This surge in the greenback can be attributed to the rise in interest rates, with the 10-year Treasury yield concluding last year near 3.88% and presently hovering around 4.04%.

Profit-taking has impacted stocks at the beginning of this year, leading to a 3% drop in China's CSI 300 and Hang Seng indices throughout the week. Europe's Stoxx 600 is retracting gains from the previous day, experiencing a decline of slightly over 2% for the week. US index futures indicate significant trading activity, pointing towards the fifth decline for the S&P 500 and the sixth consecutive fall for the NASDAQ.

The yellow metal faces its fifth session of decline in the last six, influenced by rising rates and a stronger dollar that have diminished its recent strength.
February WTI remains stable within the $72-$73 range.

Asia Pacific
Japan's final service and composite PMI, similar to the final manufacturing PMI, lack the market-moving impact. However, the composite PMI has been revised to 50.0 from 50.4, with the services component revised downward to 51.5 from 52.0. After a nearly 3% annualized contraction in Q3, the Japanese economy is anticipated to return to growth in Q4 23, driven by expansion in consumption and private investment for the first time since Q1 23.

The greenback's recovery extends to JPY144.85 in the North American session yesterday and JPY145.35 today, aided by the ongoing rebound in US rates.
The Australian dollar faced selling pressure, retreating from its session high near $0.6760 in the European morning to below $0.6700 in the North American session, and further selling pushed it to $0.6675.

Europe
The eurozone's December CPI records a 0.2% monthly increase, resulting in a three-month annualized growth rate of an impressive 1.2%. The year-over-year rate has risen to 2.9% from 2.4%, reflecting the base effect warned by ECB President Lagarde, related to energy subsidies in late 2022. The core rate, however, has fallen for the fifth consecutive month, reaching 3.4% (down from 3.6%), the lowest since March 2022.

While the euro briefly rose above $1.0970 yesterday, exhibiting a consolidative tone, it is currently trading below yesterday's low, finding support ahead of $1.09.
Sterling is holding up slightly better, with impulsive gains seen in Europe carrying over into the North American morning before stalling.

America
The US jobs report, the initial major data release for the new month, poses challenges for accurate forecasting due to the absence of solid inputs. Despite its questionable reliability, many analysts incorporate the ADP private sector estimate into their expectations. Through November, the ADP estimated the creation of 2.33 million jobs in the private sector in 2023.

In Canada, labor market conditions have eased more rapidly than in the US, with the unemployment rate rising from 5.0% at the beginning of the last year to 5.8% in November, and projections suggest a further increase to 5.9% last month.
The US dollar, largely confined to Tuesday's range against the Canadian dollar, awaits the unfolding of the jobs report.