Despite a paucity of corporate earnings, there is no shortage of fodder for traders as we approach a key moment for Brexit, the final nonfarm payrolls release before the Fed’s December meeting and a good smattering of PMI releases to chew on.
Brexit
Monday kicks off with British prime minister Theresa May in Brussels for lunch with European Commission president Jean-Claude Juncker. It is hoped that a pledge to offer more cash for the divorce bill will uncork talks on Britain’s future relationship with the EU.
Whilst the financial settlement appears to be resolved, it is unclear whether ‘sufficient progress’ has been made on the contentious topics of the Irish border and citizens’ rights.
GBP/USD rallied on news that the UK was prepared to up its offer, but the bulls have been kept on a fairly tight leash since as there are still numerous doubts about whether the European council will officially recommend moving onto the next phase of the negotiations at its meeting on December 14-15th.
NFP
Fridays sees the release of the final nonfarm payrolls and average earnings report ahead of the Federal Reserve’s policy meeting a week later. Whilst a rate hike is all but a certainty, the monthly NFP report will be as closely watched as ever.
Jobs growth missed the mark with 261k jobs added in October against expectations for more than 310k. This was the best month of jobs gains since July and the unemployment rate actually fell to 4.1% and the revisions to the prior two months means there is nothing in this to stop the Fed from hiking in December.
Nonfarm payrolls for employment for August was revised up from +169k to +208k, and the change for September was revised up from -33k to +18k , meaning employment was 90k higher than previously reported.
Of concern for the Fed is that wage growth has stalled and this raises doubts about the pace of inflation growth. Average hourly earnings rose 2.4% year on year, well down on the 2.9% reported last month and short of expectations for 2.7%. Again it’s a case of strong jobs growth but where is the wage growth? Without wages going up the Fed is going to struggle to achieve its inflation target.
Services PMIs
The UK services sector, which accounts for about 80% of the British economy, is the main focus on Tuesday as traders look to see whether the economy is showing signs of stress.
The ISM non-manufacturing PMI is due later in the day and expected to confirm the US economy is on a solid trajectory following the upward revision to Q3 GDP growth last week. The world’s largest economy expanded at annual rate of 3.3% in the third quarter, up from a previous estimate of 3%.
(All times GMT)
Monday, 4 December
00:30 – Australia company operating profits
08:00 – Spain unemployment change
09:30 – Eurozone Sentix investor confidence
09:30 – UK construction PMI
All day – Eurogroup meetings
15:00 – US factory orders
Tuesday, 5 December
00:01 – UK BRC retail sales monitor
00:30 – Australia current account, retail sales
01:45 – China Caixin services PMI
03:30 – Reserve Bank of Australia cash rate and rate statement
05:00 – Bank of Japan core CPI inflation
09:00 – Eurozone final services PMI
09:30 – UK services PMI
13:30 – Canada trade balance
15:00 – US ISM non-manufacturing PMI
Wednesday, 6 December
00:01 – BRC shop price index
00:30 – Australia GDP
07:00 – German factory orders
13:15 – US ADP nonfarm employment change
13:30 – Canada labour productivity
15:00 – Bank of Canada rate statement, overnight rate
15:30 – US weekly crude oil inventories
Thursday, 7 December
00:30 – Australia trade balance
08:30 – UK Halifax house price index
13:30 – Canada building permits
13:30 – US unemployment claims
15:00 – Canada Ivey PMI
23:50 – Japan final GDP
Friday, 8 December
00:30 – Australia home loans
Tentative – China trade balance
09:30 – UK manufacturing production, goods trade balance
13:30 – US nonfarm employment change, average earnings
Saturday, 9 December
01:30 – China CPI and PPI inflation
Source: Bloomberg
Disclaimer: Any information, analysis, opinion, commentary or research-based material on this page is for information purposes only and is not, in any circumstances, intended to be an offer of, or solicitation for, a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any person acting on it does so entirely at their own risk and ETX Capital accepts no responsibility for any adverse trading decisions. You should seek independent advice if you do not understand the associated risks.