An exceptionally strong US payrolls release for December roiled markets at the end of last week, driving the US dollar and bond yields higher, and pushing US equities sharply lower on the week. The payrolls data showed a further fall in US unemployment on the back of a stellar month of jobs growth. On the back of the “Trump trade” of late-2024, markets are now bracing for higher-for-longer interest rates, with investors pricing in just 25 basis points (bps) of interest rate cuts by the US Federal Reserve in 2025, and the US 10-year Treasury yield edging towards 5%.