Daily Market Color December 6, 2017Geopolitical Concerns Hold Down Risk Assets Global financial markets held within a tight range throughout the day as investors remained tepid with the continued uncertainty surrounding Brexit negotiations. UK Prime Minister Theresa May’s initial plan for a “soft Brexit” has now drawn the criticism of several members within her cabinet, including this morning when Foreign Secretary Boris Johnson and Environment Secretary Michael Gove publicly spoke out against May and her intentions to remain close to the EU trade/border rules. The British pound fell 0.4% today to $1.34/GBP – the currency’s third consecutive session of losses. Adding to the geopolitical uncertainty, President Donald Trump is expected to recognize Jerusalem as the capital of Israel and formally relocate the US embassy to that area, making the US the first country to have an embassy in the city. The move threatens to escalate tensions in the area and has been condemned by several leaders in the Middle East and Europe, including Pope Francis earlier today. The shifting of the US embassy dates back to 1995 when Congress mandated that it be moved there, but the action has been postponed by six successive presidents over national security concerns. Major US stock indices were mixed on the day, with the DJIA closing down 0.15% as the tech-heavy Nasdaq added gains of 0.20%. US Treasurys experienced a mild rally, and yields/swap rates finished 1-2 bps lower across the curve, bringing the yield on the 10-year note to 2.34%. In commodities, crude oil futures saw their largest decline in more than two months, falling almost 3% on the day as a rise in US inventories signaled struggling demand. Today’s decline pushed a barrel of WTI crude below $56 for the first time in more than 2 weeks. Labor Market Remains Steady The ADP national employment report for November was released today, displaying the number of new hires by private employers in the US at 190,000, matching expectations. The figure represents a modest decline from October’s seven-month high of 235,000. Steady employment gains were observed across most major industries, with the manufacturing sector adding the most jobs in the past 15 years. Often a leading indicator for the Labor Department’s more comprehensive employment report, today’s ADP figure foreshadows steady gains in Friday’s nonfarm payrolls figure, with current expectations pointing towards a 195,000-monthly increase for November after a 261,000 post-storm surge in new payrolls during the previous month.