USA employment and unemployment data will be under scrutiny this coming week, as the final NFP reading for 2017 is revealed
Our economic calendar begins to take on a more recognisable shape this coming week as our: FX, equity and commodity markets finally burst back into life, after the Xmas and new year holidays. Whilst there’s a concentration of global PMI readings published by: Markit, Caixan and the USA equivalent the ISM throughout the week, the main focus of the week is on jobs and unemployment, particularly USA job numbers.
The week ends with the monthly NFP numbers and at a predicted 180k for December, analysts and investors may view this figure as disappointing, given the temporary jobs the holiday season should have created. Challenger job losses, the ADP job numbers, new unemployment claims and continuous claims will be published. However, there’s another metric that is often ignored in the noise; the labour force participation rate for adults in the USA, which is circa 62%. The sobering fact; that nearly four in ten adults in the USA are economically inactive/unemployed/off the grid, is not the type of figure you’d expect a booming economy to register.
Sunday starts the week with China’s manufacturing and non manufacturing PMIs, the forecast is for both numbers to remain close to the figures published in November and given China’s status as the globe’s engine of manufacturing growth, the projected figure for manufacturing at 51.7 will always be closely monitored by investors and analysts, for any signs of weakness.
Monday (new year’s day) is an extremely quiet day for economic calendar news, the main publication is the monthly dairy auction figures from New Zealand. For kiwi dollar traders these figures are essential due to the country’s position as a dominant dairy exporter to Asia. Australian data published on the day consists of the latest PMI for December and the AiG performance of manufacturing index.
Once Tuesday arrives, our economic calendar information begins to return to normality as a busy day for fundamental news is delivered. German retail figures should reveal 1% growth for November (yearly and MoM), an improvement on the negative readings published for October. A raft of Eurozone manufacturing PMIs for December are published, with France, Germany, Italy and the wider Eurozone figures expected to remain close to unchanged. Whereas the U.K. PMI figure is forecast to reveal a fall from 58.2 to 57.9. As focus then turns to North America, Canada’s December PMI is revealed, as is the USA PMI from Markit.
Wednesday begins with the latest new car sales figures from the USA, always an indication of U.S. consumers’ ability, confidence and desire to take on new big ticket item debt. The latest Swiss manufacturing PMI for December is released, as is the December unemployment figure for Germany, with the rate forecast to improve to 5.5%. The U.K. construction PMI for December is predicted to remain unchanged at 53.1, whilst construction spending in the USA is forecast to seasonally fall to 0.7% for November. High impact data releases for the USA on the day are the: ISM manufacturing reading for December expected to remain unchanged at 58.2, the ISM employment metric and the release of the minutes from the meeting the FOMC held in December, at which they took the decision to raise the main interest rate to 1.5%.
Thursday is an extremely busy day for economic calendar news, however, most of the releases are low to medium impact. China’s latest services and composite Caixan PMIs will be published, as will Japan’s latest manufacturing PMI. As attention turns to Europe, the U.K. house price index published by Nationwide will be released, the expectation is for a rise of 0.2% in December registering a 2% YoY rise. A cluster of services and composite PMIs for Eurozone countries and the Eurozone specifically are published, with the majority expected to show little or no change from the November readings. The U.K. central bank the BoE publishes its November metrics on: net borrowing, mortgage lending and money supply. Focus is maintained on the U.K. as the latest services and composite Markit PMIs are published, with services forecast to make a modest improvement to 54.1, from 53.8.
As attention turns to the USA market open the focus is on jobs, particularly with the NFP numbers due to be published on the following day, Friday. The ADP jobs numbers are published, as are the challenger job cuts, the latest unemployment claims and continuous claims for the USA will also be revealed. The combination of these metrics could provide an indication of how accurate the prediction for NFP job growth in December proves to be. The day’s publication of significant data ends with Japanese monetary base and loans and discount data.
Friday witnesses the publication of the Australian balance of payments figures, Japan’s latest services and composite PMIs are revealed. As focus turns to the European markets’ open, a group of retail PMIs for the leading Eurozone nations is published, Italy, France, Germany and the wider Eurozone, whilst Germany’s construction metric is also revealed. The latest Eurozone CPI figure is forecast to come in at 1.4%, a slight fall from 1.5%.
North American data publications begins with Canada’s latest unemployment figure, expected to come in at 5.9% with a participation rate of 65.7%. From the USA we’ll receive the latest NFP figures, courtesy of the BLS (bureau of labour statistics). The prediction is that 185k jobs were created in December, a fall from the 228k created in November. The labour force participation rate is predicted to come in at 62.7%, with the unemployment rate forecast to remain unchanged at 4.1%. Average weekly hours and the wages earned in the USA, are expected to remain consistent with November figures and show no change.
The USA trade balance figure for November is forecast to improve marginally to -$48b, durable orders for November are predicted to remain close to the 1.3% figure published in October, whilst the ISM non manufacturing/services reading is predicted to reveal a slight rise to 57.5. The USA weekly data ends with the Baker Hughes rig count, revealing the domestic oil production performance of the country. A Fed official Mr Harker will deliver speeches at two conferences, his subjects are the economic outlook and monetary policy coordination.
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