All eyes on US labour data, as Japan’s final GDP and Economy Watchers survey, UK Employment PMI and Swedish monthly GDP are digested, little in the way of central bank speakers; USDA WASDE report
US Payrolls seen rebounding modestly on end of autoworkers strike, but sharp JOLTS drop and soft ADP suggests ‘whisper’ estimate lower; more focus likely on Average Hourly Earnings
EVENTS PREVIEW
Today’s focus will be the US labour data and preliminary Michigan Sentiment, with the rest of the day’s key data times on the overnight ‘to digest list’ via way of the downward revision to Japan’s Q3 GDP along with its Current Account and somewhat better than expected Economy Watchers (services) survey, the renewed setback in the UK Employment PMI, and unexpectedly sharp rebound in Swedish monthly GDP (though production and services output remained very weak), and another slightly less ‘hawkish hold’ from India’s RBI, wit. There is little in the way of central bank speak, while agricultural commodity markets look to the USDA WASDE (World Agricultural Supply & Demand Estimates). Next week’s schedule brings a busy run of major data (inflation and activity) from the US, China and the UK, though the focus will likely be on the run of central bank policy meetings (Fed, ECB, BoE and SNB), as the PBOC conducts its monthly 1-yr MTLF operations at an expected unchanged rate of 2.50%.
** U.S.A. – Nov Labour report **
A sharp drop in JOLTS Job Openings and weaker than forecast ADP Employment (103K) suggest that the risk is to the downside of the consensus estimates of a rebound in headline Payrolls to 183K (vs. 150K) and Private Payrolls to 158K (vs. 99K), and an unchanged 3.9% Unemployment Rate. The expected rebound is expected to be paced by a 30K bounce back in Manufacturing Payrolls as the UAW strike ended, and the drop in Initial Claims in the establishment survey week. Given that markets have already priced in a great deal in terms of Fed easing next year, it is debatable how much more could be priced in, should Payrolls come in below expectations, particularly as it would likely remain around Fed’s suggested breakeven Payrolls rate of 100K, i.e. the level at which the Unemployment Rate remains unchanged. As much, if not more attention will be given to Average Hourly Earnings, which are seen edging up 0.1 ppt in m/m terms to 0.3% though dipping to 4.0% y/y, which would leave the 3-mth annualized rate at 3.2%, still slightly above the Fed’s comfort zone. Michigan Sentiment is expected to improve modestly to 62.0 from 61.3, presumably paced by the drop in gasoline prices.
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