New review of events in the upcoming week
Last week, the US dollar continued to lose ground against the currency majors.
At the moment, the dollar index (#DX) is consolidating near monthly lows.
The US currency is under pressure due to a trade conflict between the US and China, the political uncertainty in the White House, as well as a number of weak statistics.
Financial market participants expect a report on the US labor market for December.
In the upcoming trading week, we recommend paying attention to the following macroeconomic events.
Wednesday, January 2nd
On Wednesday, investors will assess the following economic reports:
- Caixin Manufacturing PMI at 03:45 (GMT+2:00);
- German Manufacturing PMI at 10:55 (GMT+2:00);
- Manufacturing PMI in the UK at 11:30 (GMT+2:00).
Thursday, January 3rd
On Thursday, we expect important statistics:
- The index of economic activity in the UK construction sector at 11:30 (GMT+2:00);
- ADP nonfarm employment change in the US at 15:15 (GMT+2:00);
- The index of economic activity in the US manufacturing sector from ISM at17:00 (GMT+2:00).
We also recommend paying attention to statistics on the real estate market in the United States.
Friday, January 4th
On Friday, a report on the US labor market for December will be the key event, at 15:30 (GMT+2:00).
We recommend paying attention to the difference between the actual and forecasted values of the indicators.
- German unemployment change at 10:55 (GMT+2:00);
- The index of economic activity in the UK services sector at 11:30 (GMT+2:00);
- Consumer price index in the Eurozone at 12:00 (GMT+2:00);
- Employment change in Canada at 15:30 (GMT+2:00).
We also recommend paying attention to the speech by the Fed Chairman.
1. US Non-Farm Payrolls
Data from the United States this week will see the release of the jobs report which includes both the ADP/Moody’s private payroll figures and the official nonfarm payroll numbers.
Economists forecast that the private payroll hiring increased 175k during the month of December.
The forecasts mark a modest decline from 179k jobs that was registered in November.
Later in the week, the official payrolls report will be coming out. Forecasts show that the U.S. economy added 168k jobs during the month.
This marks a modest increase from 161k jobs added the month before. The average hourly earnings are forecast to rise 0.3% on the month, accelerating from 0.2% from the month before.
The U.S. unemployment rate is expected to remain unchanged at 3.7%.
2. Non-manufacturing PMI reports
Besides the payroll figures, data will also see the release of the Institute of Supply Management’s manufacturing and nonmanufacturing PMI reports over the week.
Manufacturing activity as measured by ISM is forecast to ease to 58.4 compared to November’s reading of 59.3.
The slight decline in the index comes as regional manufacturing indexes point to a slowdown in manufacturing activity during December.
Later in the week, the ISM’s non-manufacturing PMI will be released with the forecasts showing that there could be a decline in the index especially for the manufacturing sector.
3. Eurozone PMI estimates
Economic data from the Eurozone this week will cover the final PMI estimates from the manufacturing and services sector.
According to the flash estimates, services PMI are once again expected to outperform the manufacturing sector.
The data will show whether Germany was able to recover from the slowdown in manufacturing, especially in the automobile sector in December.
Germany’s automobile sector was seen posting a drag on the economy and also pulling down the Eurozone’s economy on the whole.
However, it was expected to be only temporary. Later in the week, the preliminary inflation figures for the Eurozone will be released.
Economists forecast that inflation dipped to 1.9% in January after hovering around the 2.0% level over the past few months.