On Monday 1st: The Australian Judo Bank Manufacturing PMI will be released.
On Tuesday 2nd: The Caixin China General Manufacturing PMI is due.
On Wednesday 3rd: The US ISM Manufacturing PMI is released, along with the US JOLTs Job Openings, and the Monetary Policy Minutes from the last Federal Reserve Meeting
On Thursday 4th: French Inflation data, the UK Services PMI, German Inflation and the ADP Employment Change are due
On Friday 5th: Japan’s Consumer Confidence is released, along with Euro Area Inflation, Italian Inflation, Canadian Employment figures, US Employment data and the Canadian Ivey PMI.
Weekly outlook
Another quiet start to the week this week, as the world stops to mark the beginning of a new calendar year on Monday. Investors can still expect plenty to keep them busy though; the holiday season is quickly passing, reporting is starting to go back to normal, and we’ll soon start gearing up for another earnings season.
This week, investors can expect to see plenty of employment related data released and particularly of interest will be this month’s US Non Farm Payrolls. After months of fading growth in employment this year owing to the Federal Reserve’s aggressive tightening of interest rates to curb inflation, last month, the economy added just shy of 200,000 new jobs. As the Fed continues to strive for the so called “soft landing,” where inflation normalises and the country manages to avoid a recession, many expect these numbers to continue to fall in the coming months before interest rates may be cut again.
Monday 1st of January
The Australian Judo Bank Manufacturing PMI will be published this morning at 10:00 AM GMT. According to preliminary estimates, the PMIs value increased slightly to 47.8 in December, up from 47.7 in the previous month. The manufacturing sector has seen a continuous decline for 10 months in a row now, with not too much improvement expected this month.
Tuesday 2nd of January
A number of Manufacturing PMIs are due to be released across the day for the month of December today. Most notably, the Caixin China General Manufacturing PMI, which increased to 50.7 in November, surpassing market expectations of 49.8 and indicating the highest level since August. A slight reduction to around 50.4 is expected for this report.
Wednesday 3rd of January
The US ISM Manufacturing PMI, due at 3:00 PM GMT today, remained steady at 46.7 last month, the same as in October, and fell short of the predicted value of 47.6. Despite the ongoing decline in orders, companies are effectively handling their outputs, and a slight improvement for December is expected, up to around 47.1.
US JOLTs Job Openings are also due at 3:00 PM GMT. In October, there was a notable decline of 617,000 job openings compared to the previous month, amounting to 8.733 million. This figure represents the lowest level since March 2021 and falls short of the 9.3 million forecast by the market. Analysts predict a slight bump to 8.8 million for November.
The Federal Reserve will make its Monetary Policy Meeting minutes available today from 7:00 PM GMT. Consistent with expectations, the FOMC maintained the fed funds rate between 5.25% and 5.5% at its third consecutive meeting in December. However, it did signal 75 basis point reductions in 2024. Recent indicators, according to policymakers, indicate that economic growth has decelerated, job gains have moderated but remain robust, and the unemployment rate has remained low. Additionally, the central bank released updated projections.
Thursday 4th of January
France’s Preliminary Inflation figures are due to be released at 7:45 AM GMT today. In November, the yearly headline rate decelerated to 3.5%, surpassing a preliminary estimate of 3.4%, after peaking at 4% in October. Significant decelerations in the costs of energy, services, and manufactured products were predominantly responsible for this reading falling to its lowest level since January of last year, and expectations are for a slight drop in December to around 3.4%.
A variety of Services PMIs are due to be released throughout the day today, possibly of most interest, the Final S&P Global/CIPS UK Services PMI, which will likely confirm an increase from 50.9 in November to 53.7, surpassing expectations of 51. This result would signify the second consecutive month of growth in the services sector of the UK, which surpasses the contractions observed in Eurozone member countries. It matched the recent increase in new orders and marked the most rapid growth rate since May.
The German annual consumer price inflation rate was officially confirmed to be 3.2% in November, reflecting a deceleration from October's rate of 3.8% and signifying the lowest level since June 2021. A slight increase to around 3.4% is forecast for December, when the preliminary report is released at 1:00 PM GMT today.
According to the ADP Employment Change for the US, private companies recruited 103,000 people in November, falling short of both October's revised 106K and forecasts of 130K, as the labour market continues to slow. Expectations are for around 100,000 new positions to be taken up in December, when the new figures are released at 1:15 PM GMT.
Friday 5th of January
Japanese Consumer Confidence is due to be published at 5:00 AM GMT today. In November, the Japanese index surpassed market expectations, rising to 36.1 from 35.7. For December expectations are for a slight dip to around 36.
Inflation data from the Euro Area will be published today from 10:00 AM GMT. Consistent with the preliminary data, the annual inflation rate in the Euro Area fell to 2.4% in November from 2.9% in October, and was the lowest rate since July 2021. Expectations are for a rise to around 3% for December, while the core rate is thought to be dropping to around 3.4% from 3.6%.
Due to high base effects and the protracted period of restrictive monetary policy from the ECB, Italy's annual inflation rate declined to 0.7% in November from 1.7% in the previous month. This is the lowest reading since February 2021 and below initial estimates of 0.8% amid disinflation processes in the entire Euro Area. A further drop to around 0.6% is expected for December when the new data is released at 10:00 AM GMT.
Canadian Employment figures are due today from 1:30 PM GMT. In November, the unemployment rate increased to 5.8% from 5.7%, as anticipated by the market. It was the highest rate since January 2022, when 1.24 million people were jobless, a rise of 11,000 over the previous month. Forecasts for December predict a rise to 5.9%. Meanwhile, Canada's employment increased by 24.9K in November, above estimates of 15K and up from 17.5K in October. Expectations are for a further 13.2K jobs to be added in December.
US Employment numbers are also due today, including Non Farm Payrolls. Market forecasts were for a gain of 180,000 jobs in November, but the US economy actually created 199,000 jobs, above the 150,000 jobs gained in October. However, the jobless rate was lower than the average monthly increase of 240,000 during the previous year, indicating a downturn in the labour market for the second consecutive month. 158,000 new positions are expected to have been created in December when the data is released at 1:30 PM GMT. The Unemployment Rate is also predicted to increase to 3.8% from 3.7%.
In November, the Ivey Purchasing Managers Index in Canada reached 54.7, which was up from 53.4 in October. The most recent data showed that Canada's economy grew for the fourth month in a row, which is the longest streak of increase since April of last year. A dip to around 52.4 is expected for December
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