The first full trading week of the new year is expected to be pretty volatile and packed with various events. The spotlight will be on the US Non-Farm Payrolls report, which will play a crucial role in shaping Fed rate expectations. In the meantime, markets will be scrutinizing inflation trends in the Eurozone and China, setting the tone for major currency pairs throughout January.
United States:
● 3:00 p.m. GMT: ISM Manufacturing PMI (December). Forecast: 48.3; Previous figure: 48.2. The index remains below the 50 mark, which is signaling stagnation in the manufacturing sector. A stronger-than-expected reading could lend support to the USD.
● 3:00 p.m. GMT: ISM Manufacturing Prices Index (December). Forecast: 59.0; Previous figure: 58.5. Rising price pressures indicate persistent inflation within the industrial sector.
Eurozone:
● 9:00 a.m. GMT: Services PMI (December). Forecast: 52.6; Previous figure: 52.6.
● 9:00 a.m. GMT: S&P Global Composite PMI (December). Forecast: 51.9; Previous figure: 51.9. Stable readings above 50 points to moderate economic expansion and provide underlying support for the euro.
Germany:
● 1:00 p.m. GMT: CPI (Month-over-Month) (December). Forecast: 0.3%; Previous figure: -0.2%. A return to price growth following November’s deflation may boost volatility in EUR pairs.
United States:
● 2:45 p.m. GMT: Services PMI (December). Forecast: 52.9; Previous figure: 54.1. A decline in this indicator may trigger short-term USD weakness amid signs of cooling in the services sector.
Eurozone:
● 10:00 a.m. GMT: CPI (Year-over-Year) (December). Forecast: 2.1%; Previous figure: 2.1%. A key inflation reading for the ECB. If inflation stabilizes at 2.1%, the regulator may maintain a wait-and-see approach.
United States:
● 1:15 p.m. GMT: ADP Non-Farm Payrolls (December). Forecast: 47K; Previous figure: -32K. An intense rebound is expected following November’s weak reading. This report is often viewed as a preview of Friday’s NFP.
● 3:00 p.m. GMT: ISM Non-Manufacturing PMI (December). Forecast: 52.2; Previous figure: 52.6.
● 3:00 p.m. GMT: JOLTS Job Openings (November). Forecast: 7.650M; Previous figure: 7.670M.
● 3:30 p.m. GMT: Crude Oil Inventories. Previous figure: -1.934M. A key release for WTI crude oil and the Canadian dollar.
United States:
● 1:30 p.m. GMT: Initial Jobless Claims. Forecast: 216K; Previous figure: 199K. An increase in claims may be interpreted as a sign of gradual cooling in the previously overheated labor market.
China:
● 1:30 a.m. GMT: CPI (Year-over-Year) (December). Forecast: 0.8%; Previous figure: 0.7%. Rising inflation in China is generally supportive of risk appetite and commodity-linked currencies such as AUD and NZD.
United States:
● 1:30 p.m. GMT: Average Hourly Earnings (MoM) (December). Forecast: 0.3%; Previous figure: 0.1%. Wage growth remains a pro-inflationary factor closely monitored by the Fed.
● 1:30 p.m. GMT: Non-Farm Payrolls (December). Forecast: 57K; Previous figure: 64K. The main event of the week. A weaker-than-expected result would pressure the USD.
● 1:30 p.m. GMT: Unemployment Rate (December). Forecast: 4.5%; Previous figure: 4.6%.
● Liquidity has returned: Markets are back in full swing after the holidays. While spreads are tighter, trading volumes may surge following German PMI and CPI data.
● JOLTS and ISM trap: Wednesday’s 3:00 p.m. GMT releases could hit the USD massively if job openings turn out to be lower-than-expected and ISM data confirms a slowdown.
● Trading the EUR: Pay close attention to German CPI on Tuesday and Eurozone CPI on Wednesday. Any deviation from forecasts could trigger a breakout of key levels in EUR/USD.
We wish you a successful trading week and profitable trades!
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