Week Ahead | US Nonfarm Payrolls to provide first boost in 2017
Today is a light start to the new year. Many markets including USA,UK,Australia,France & New Zealand will be closed as they will be observing new year’s holiday. Midafternoon Europe will release Markit Manufacturing PMIs for December. This captures business conditions in the manufacturing sector in Europe. Financial markets in New Zealand and Japan will remain closed for holidays. In the euro zone, Germany is to release preliminary inflation data and a report on the change in the number of people unemployed. First up will be Unemployment rate which shows , in a percent basis, the amount of unemployed people in Germany, using seasonally adjusted data. This will be followed by Consumer Price index which measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends. By midafternoon UK will release Markit Manufacturing PMI captures business conditions in the manufacturing sector. The day will end with ISM Prices Paid & ISM Manufacturing PMI reports from USA, which shows business conditions in the US manufacturing sector, taking into account expectations for future production, new orders, inventories, employment and deliveries. The day will start with economic reports from Europe on Markit Services PMI and Markit PMI Composite which are indicators of the economic situation in the Euro Zone services sector. This will be followed by PMI construction from UK , which shows business conditions in the UK construction sector. Next will be Consumer Credit report which shows the amount of money that’sborrowed by UK residents. It shows if consumers can afford large expenses, which can fuel economic growth. This will be followed by Mortgage approvals report from UK, which is an leading indicator of the UK Housing Market. A Mortgage growth represents a healthy housing market that stimulates the overall UK economy. By evening USA will release ADP Employment change report, which is a measure of the change in the number of employed people in the US. Generally speaking, a rise in this indicator has positive implications for consumer spending, stimulating economic growth. The day will end with FOMC minutes of the December meeting. The day will start with Producer Price index from Europe which measures the change in prices received by domestic producers of commodities in all stages of processing. This will be followed by Monetary policy meeting accounts from Europe which is an overview of financial market, economic and monetary developments in the Euro zone. By Evening USA will release Initial jobless claims report which is an measure of the number of people filing first-time claims for state unemployment insurance. These will be followed by Markit PMI Composite & Market Services PMI which captures business conditions in the services sector. The day will end with ISM Non-manufacturing PMI which shows business conditions in the US non-manufacturing sector. The day will be dominated by US economic data. The US employment report will set the immediate tone surrounding sentiment towards the US economy at the start of 2017 and will also have a significant impact on Federal Reserve expectations. A firm reading for payrolls growth would increase expectations that the labor market remains very robust, while a disappointing reading would raise some doubts surrounding the outlook. The day will start with Trade Balance, Exports & Imports reports from Australia, which will give an indication of the export and import market. By evening USA will release Average Hourly earnings which is an significant indicator of labor cost inflation and of the tightness of labor markets. The Federal Reserve Board pays close attention to this report when setting interest rates. This will be followed by Non-Farm payrolls which shows the number of new jobs created during the previous month, in all non-agricultural business. The monthly changes in payrolls can be extremely volatile, due to its high relation with economic policy decisions made by the Central Bank. US Unemployment rate will follow next which shows a percentage that surges from dividing the number of unemployed workers by the total civilian labor force. It represents the percentage of people actively seeking employment and willing to work. The day will end with Factory orders from USA which is an measure of the total orders of durable and non-durable goods such as shipments (sales), inventories and orders at the manufacturing level which can offer insight into inflation and growth in the manufacturing sector.Monday
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