NFP Report To Kick Off New Year, Inject Life Into Muted FX Market
XM Group | Dec 30, 2021 12:26PM ET
NFP and FOMC minutes could roil the dollar
It’s going to be a gradual return to business as usual in most countries except in the United States where it’s set to be a full-on week. The ISM manufacturing PMI is the first top-tier data to greet 2022 on Tuesday. The closely watched manufacturing activity gauge is expected to point to an easing in the PMI from 61.1 to 60.2 in December. If the decline is led by a fall in the priced paid component, that may not be such a bad thing. On the other hand, weaker new orders and a still elevated prices paid index could worry investors.
The JOLTS job openings for November on Tuesday and the ADP private payrolls print due Wednesday will keep traders guessing about the labour market ahead of the all-important jobs report on Friday. Factory orders and the ISM non-manufacturing PMI out on Thursday will be the other key data to be watched prior to Friday.
But of course, all eyes will be on the NFP figures, especially after November’s surprise miss and the swelling of Covid-19 cases in recent weeks. Analysts are forecasting an increase of 400k jobs in December and for the unemployment rate to tick lower to 4.1%. Average hourly earnings are expected to have eased from 4.8% to 4.1% year-on-year.
Most don’t think the ECB will be in a position to hike rates anytime soon, hence why the euro hasn’t been able to make much progress against the dollar.
But there will be plenty of other releases next week to shed some light on the Eurozone economy, including the final manufacturing PMI on Monday, followed by the final services print on Wednesday. German industrial orders are out on Thursday, with production figures coming up on Friday. Also rounding things up on Friday will be the economic sentiment indicator and retail sales for the bloc.
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