UPDATE: Critical economic reports are set to shape market expectations this week, from January 5 to 9, 2024. The week kicks off quietly, but key data releases throughout the week will capture attention across global financial markets.
On Monday, January 5, all eyes will be on the ISM Manufacturing PMI in the U.S., providing insights into the health of the manufacturing sector.
Tuesday, January 6, brings a trio of services PMI reports from the Eurozone, the U.K., and the U.S. These figures are crucial for gauging economic activity and potential market shifts.
Midweek, the spotlight shifts to Wednesday, January 7, when inflation data will be released from Australia and the Eurozone. The U.S. will also report on the ADP Nonfarm Employment Change, the ISM Services PMI, and JOLTS Job Openings, which are vital for understanding labor market dynamics.
Thursday, January 8, will see Switzerland release its CPI data, while the U.S. publishes its weekly unemployment claims. These reports could sway central banks’ policy decisions.
Friday, January 9, is packed with significant labor market data. Canada will unveil its employment change and unemployment rate. In the U.S., the figures for average hourly earnings, nonfarm payrolls, and the unemployment rate will be closely watched, along with preliminary data on University of Michigan consumer sentiment and inflation expectations.
Analysts forecast a modest increase in Australia’s CPI m/m at 0.1%, compared to 0.0% previously. The annual rate is expected to hold at 3.7%, down slightly from 3.8%. Westpac analysts indicate a significant 16% surge in electricity prices as a key driver of this increase.
In Switzerland, CPI is projected to remain steady at 0.0% m/m, up from -0.2% last month. The Swiss National Bank (SNB) anticipates inflation will stay within the 0-2%% target range for the foreseeable future.
For the Bank of Canada, this week’s employment data will be pivotal ahead of its January policy meeting. Following a sharp drop in the unemployment rate in November, analysts expect a modest decline in employment, reversing part of prior gains. The unemployment rate may edge higher, but RBC analysts suggest this is likely a correction rather than a sign of broader labor market weakness.
In the U.S., the consensus predicts average hourly earnings will rise by 0.3% m/m, compared to 0.1%% previously. Nonfarm payrolls are expected to increase by 57,000, down from 64,000, while the unemployment rate is forecast to fall from 4.6%% to 4.5%%.
Despite recent fluctuations in payroll growth, recent job data indicates a mixed labor market. Gains have predominantly skewed toward part-time roles, while core-age unemployment and wage growth have displayed resilience. However, the overall job market remains subdued, prompting analysts at Wells Fargo to predict that wage growth will stay soft, helping to mitigate inflation pressures.
As the week unfolds, traders and investors will be closely monitoring these pivotal indicators, which are essential for understanding the economic landscape. Stay tuned for updates as these reports are released, with implications that could resonate through global markets.
