Reuters - A look at the day ahead in U.S. and global

markets by Samuel Indyk

2025 has kicked off how 2024 ended: stocks are having a

wobble and the dollar remains in charge as investors bet that

Fed rate cuts will be few and far between this year.

Data on Thursday supported that view, with the number of

Americans filing new applications for unemployment benefits

dropping to an eight-month low last week.

A robust labor market should stamp out any near term

expectations for rate cuts from the Fed, with lower borrowing

costs now conditional on a worsening employment picture and

softer inflation.

The chances of a cut at the Fed's January meeting stand at

about 11%.

With U.S. rates expected to stay higher for longer, it's the

dollar that reigns supreme.

The dollar index, albeit a touch softer on Friday,

remains near its highest level in over two years, pushing the

pound to multi-month lows and the euro ever closer towards

parity.

On Thursday, the single currency fell to its

lowest in over two years at $1.0225.

Europe remains unloved, for now, with the threat of U.S.

import tariffs further weighing on sentiment.

The fourth quarter of 2024 marked the worst quarterly

showing in more than two years for the pan-European STOXX 600

.

And it's not just Europe that is showing signs of stress.

Wall Street is wobbling too.

The S&P 500 couldn't hold onto gains on Thursday and

fell for a fifth straight trading session, its longest losing

streak since mid-April. The Nasdaq Composite also fell for a

fifth straight day.

Wall St futures are higher before the bell on Friday as they

look to end the holiday-disrupted week in the green before a big

week next week, which include December's nonfarm payrolls report

and flash inflation data from the euro zone.

Key developments that should provide more direction to U.S.

markets later on Friday:

* ISM Manufacturing PMI

* EIA Natural Gas Storage Change

(Writing by Samuel Indyk

Editing by Christina Fincher)