Market News

Unit labor costs for Q4

• Prior quarter -1.9% revised to -1.8%
• Unit Labor costs for Q4 2.8% vs 2.0% expected

More details on Unit Labor costs from the BLS:

• Hourly compensation rose 5.7%, partly offset by 2.8% productivity growth.

• Year-over-year: Unit labor costs increased 1.3% over the past four quarters.

• Real hourly compensation: +3.1% in Q4; +1.3% year-over-year after adjusting for inflation.

• Labor share: 53.8% of output, the lowest level since records began in 1947.

• Current business cycle: Productivity has grown at a 2.2% annualized pace since Q4 2019, stronger than the 1.5% pace in the prior cycle (2007–2019).

Productivity for Q4

• Prior quarter 4.9% revised higher to 5.2%
• Productivity Q4 2.8% vs 1.9% expected
• Annual average productivity increased…

Headlines:

• Iran is ready to abandon its nuclear program if the US makes a satisfactory offer
• Is this a hint that the US-Iran conflict might stretch on for much longer?
• ECB's de Guindos: Baseline scenario is that US-Iran will be a short conflict
• ECB policymaker Villeroy: I do not see reason today why we should raise interest rates
• Eurozone January retail sales -0.1% vs +0.3% m/m expected
• Germany February construction PMI 43.7 vs 44.7 prior
• UK February construction PMI 44.5 vs 47.0 expected
• US February Challenger layoffs 48.307k vs 108.435k prior
• A friendly reminder that we do have the US non-farm payrolls tomorrow

Markets:

• WTI crude oil up 1.5% to $77.20, Brent crude oil up 1.3% to $83.69
• S&P 500 futures down 0.2% but recover from 0.5% losses…

US-based employers announced 48,307 job cuts in February 2026, and that is down ~72% compared to the same month last year. Some good news is that through February, employers announced 156,742 job cuts in total. That marks the lowest January-to-February total since 2022. But when you put things into better context, it is the fifth-highest January-February total since 2009.

The tech sector once again is the one seen slashing jobs the most with 11,039 job cuts in February. That brings the year-to-date total to 33,330 in 2026 so far. Of note, this marks a 51% increase to the 22,042 cuts in this sector announced in the same period last year.

Challenger notes that:

"Tech is responding to a number of pressures right now. AI is the big story, but…

The consensus is for a softer reading in the headline non-farm payrolls figure, following the strong showing in January. The first month of the year typically has seasonal factors imbued and this time, we are expected to see job gains of 59k.

One known downside factor is the United Nurses Associations of California/Union of Health Care Professionals (UNAC/UHCP) strikes, which will reflect around 31k striking workers over the payrolls reference period. The health physicians on strike will be absent from the payrolls figure having not worked through 26 January to 23 February. Of note, this will be the largest strike activity impact on the labour market report since October 2024 (the Boeing worker strike).

As such, just keep in mind to…

The consensus is for a softer reading in the headline non-farm payrolls figure, following the strong showing in January. The first month of the year typically has seasonal factors imbued and this time, we are expected to see job gains of 59k.

One known downside factor is the United Nurses Associations of California/Union of Health Care Professionals (UNAC/UHCP) strikes, which will reflect around 31k striking workers over the payrolls reference period. The health physicians on strike will be absent from the payrolls figure having not worked through 26 January to 23 February. Of note, this will be the largest strike activity impact on the labour market report since October 2024 (the Boeing worker strike).

As such, just keep in mind to…

• Prior -0.5%; revised to +0.2%

The breakdown shows an increase in retail sales for food, drinks, tobacco (+0.3%), offset by a decline in sales for non-food products (-0.2%) and automotive fuel in specialised stores (-1.1%). But relative to the same month last year, euro area retail sales is at least seen up 2.0%. The monthly trend:

•  Asian Stock Markets : Nikkei up 1.36%, Shanghai Composite up 0.84%, Hang Seng up 0.75% ASX up 0.24%
• Commodities : Gold at $5,191.90 (1.11%) Silver at $84.945 (2.11%), Brent Oil at $83.79 (1.64%), WTI Oil at $77.20 (3.39%)
• Rates : US 10-year yield at 4.114, UK 10-year yield at 4.4440, Germany 10-year yield at 2.7459

• (USD) ADP Non-Farm Employment Change  63K  to 50K  expected

Asian stock markets traded mostly higher on Thursday, following broadly positive cues from Wall Street overnight. Technology stocks led the gains across the region, mirroring the strength seen on the tech-heavy Nasdaq. Markets in South Korea, Taiwan, Hong Kong and Indonesia posted notable…

•  Asian Stock Markets : Nikkei up 1.36%, Shanghai Composite up 0.84%, Hang Seng up 0.75% ASX up 0.24%
• Commodities : Gold at $5,191.90 (1.11%) Silver at $84.945 (2.11%), Brent Oil at $83.79 (1.64%), WTI Oil at $77.20 (3.39%)
• Rates : US 10-year yield at 4.114, UK 10-year yield at 4.4440, Germany 10-year yield at 2.7459

• (USD) ADP Non-Farm Employment Change  63K  to 50K  expected

Asian stock markets traded mostly higher on Thursday, following broadly positive cues from Wall Street overnight. Technology stocks led the gains across the region, mirroring the strength seen on the tech-heavy Nasdaq. Markets in South Korea, Taiwan, Hong Kong and Indonesia posted notable…