Friday’s Nonfarm Payrolls report for November will be the focus of investors’ attention. Economists expect the US economy to have added 180,000 jobs in November after 150,000 jobs were created in October. A strong report will make it less likely that the Fed will begin easing its restrictive monetary policy sooner than expected, which could impede a further rally in stocks. Also, this week’s main events will be the interest rate meetings of the central banks of Australia and Canada. Both RBA and BoC are expected to leave interest rates unchanged, which will reinforce investor confidence that rates are at their peak. Investors should also pay attention to the Eurozone and Japanese GDP quarterly data as well as the inflation rate in Germany and Switzerland. Fed policymakers will not be speaking or commenting this week.
Monday, December 04
On Monday, investors’ focus should be on Swiss inflation data. Inflation is expected to remain at 1.7% year-on-year, below the SNB’s 2% target. President Christine Lagarde’s speech on Monday will be closely watched for new monetary policy ideas ahead of the bank’s upcoming meeting on December 14.
Main events of the day:
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– German Trade Balance (m/m) at 09:00 (GMT+2);
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– Switzerland Consumer Price Index (m/m) at 09:30 (GMT+2);
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– Eurozone ECB President Lagarde Speaks at 16:00 (GMT+2);
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– US Factory Orders (m/m) at 17:00 (GMT+2).
Tuesday, December 05
The main event on Tuesday will be an interest rate meeting of Australia’s central bank. The RBA is expected to leave the rate unchanged at 4.35%, although there remains a 40% chance of another 0.25% rate hike. The RBA raised interest rates at its last meeting, citing more sustained inflationary pressures, with the bank’s Governor Michele Bullock speaking in a hawkish tone after the meeting. Volatility on currency pairs with the Austrian dollar will increase. On Tuesday, there also will be a lot of macro statistics on business activity in the services sector. This data will complement the Manufacturing PMI reports that were released last week. Investors should also carefully analyze the JOLTS Job Openings report, which will bring additional volatility to currency pairs with the US dollar. The number of vacancies is expected to decrease, which may be a negative factor for the US dollar.
Main events of the day:
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– Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
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– China Caixin Services PMI (m/m) at 04:45 (GMT+2);
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– Australia RBA Interest Rate Decision at 05:30 (GMT+2);
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– Australia RBA Rate Statement at 05:30 (GMT+2);
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– German Services PMI (m/m) at 10:55 (GMT+2);
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– Eurozone Services PMI (m/m) at 11:00 (GMT+2);
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– Eurozone Producer Price Index (m/m) at 11:00 (GMT+2);
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– UK Services PMI (m/m) at 11:30 (GMT+2);
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– US ISM Services PMI (m/m) at 17:00 (GMT+2);
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– US JOLTS Job Openings (m/m) at 17:00 (GMT+2).
Wednesday, December 06
The Bank of Canada is forecast to leave rates unchanged for the third consecutive time at 5.0%. Recent data showed that the economy contracted in the third quarter, suggesting that the central bank’s aggressive rate hikes are holding back economic growth and reinforcing investor’s view that the BoC has peaked on rates this cycle. Volatility in currency pairs with the CAD will increase. Traders should also closely monitor quarterly GDP data in Australia. Australia’s economy is expected to have grown by 0.3% in the third quarter. However, in annual terms, GDP is expected to contract from 2.1% to 1.7%.
Main events of the day:
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– Australia GDP (q/q) at 02:30 (GMT+2);
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– UK Construction PMI (m/m) at 11:30 (GMT+2);
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– UK FPC Meeting Minutes at 12:30 (GMT+2);
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– UK BoE Financial Stability Report at 12:30 (GMT+2);
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– UK BoE Gov Bailey Speaks at 13:00 (GMT+2);
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– US ADP Nonfarm Employment Change (m/m) at 15:30 (GMT+2);
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– US Trade Balance (m/m) at 15:30 (GMT+2);
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– Canada Trade Balance (m/m) at 15:30 (GMT+2);
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– Canada BoC Interest Rate Decision at 17:00 (GMT+2);
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– Canada BoC Rate Statement at 17:00 (GMT+2);
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– Canada Ivey PMI (m/m) at 17:00 (GMT+2);
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– US Crude Oil Reserves (w/w) at 17:30 (GMT+2).
Thursday, December 07
Thursday is expected to be a quiet day. The Eurozone will update its GDP data for the third quarter. Analysts expect to see the economy contract by 0.1%. This could be a positive for the euro as it will reduce the ECB’s hawkish tone and increase the likelihood of a rate cut soon. Weekly jobless claims will also provide insight into the US labor market. A slight increase in jobless claims is expected, which may increase the likelihood of a weaker Nonfarm Payrolls report on Friday. It is also important to pay attention to the trade balance data in Australia and China, which can strongly affect the dynamics of Asian indices.
Main events of the day:
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– Australia Trade Balance (m/m) at 02:30 (GMT+2);
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– China Trade Balance (m/m) at 05:00 (GMT+2);
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– Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
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– German Industrial Production (m/m) at 09:00 (GMT+2);
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– Eurozone GDP (q/q) at 12:00 (GMT+2);
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– US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
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– US Natural Gas Storage (w/w) at 17:30 (GMT+2).
Friday, December 08
Friday’s main event will be the monthly Nonfarm Payrolls report. The report is expected to show that the unemployment rate remained unchanged at 3.9%, and the number of Nonfarm Payrolls increased by 180k in November compared to 150k in October. A strong one will make it less likely that the Fed will begin easing its restrictive monetary policy sooner than expected. A weak number, on the other hand, could raise concerns that the economy is cooling after a 525 basis point rate hike. Japan’s Q3 GDP data is expected to be weak: the economy is forecast to contract by 2.1% at once, which could hit hard the Bank of Japan’s ambitions to move to normalize monetary policy. In Germany, inflation is expected to fall from 3.8% to 3.2% y/y, which will bolster investor confidence that there is no point in the ECB raising rates any further.
Main events of the day:
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– Japan GDP (q/q) at 01:50 (GMT+2);
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– German Final Consumer Price Index (m/m) at 09:00 (GMT+2);
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– US Nonfarm Payrolls (m/m) at 15:30 (GMT+2);
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– US Unemployment Rate (m/m) at 15:30 (GMT+2);
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– US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).
by JustMarkets, 2023.12.04
Open Account