Jobless Claims Drop to 198,000, Boosting Dollar as Oil Falls on Reduced Iran Risk

Overview

• Weekly initial unemployment claims fell to 198,000 versus a 215,000 forecast, with the Empire State and Philadelphia Fed surveys also beating expectations.
• The dollar index reached a six-week high as markets pared near-term easing bets, with futures implying about a 5% chance of a January rate cut and lower odds for April.
• Atlanta Fed President Raphael Bostic and Kansas City Fed President Jeff Schmid said policy should stay restrictive given persistent inflation pressures.
• U.S. equities advanced while WTI crude dropped nearly 5% to about $59 a barrel after President Trump signaled lower immediate military risk with Iran.
• Policy signals abroad added to FX moves, with a Bloomberg report saying BoJ officials are watching yen weakness more closely, separate reports pointing to a 25 bp cut in PBOC structural-tool rates, and some outlets reporting a U.S.–Taiwan tariff deal.