URGENT UPDATE: Market watchers brace for a week packed with crucial economic data impacting the FX market from January 5-9, 2023. This week kicks off with the highly anticipated ISM manufacturing PMI in the U.S., setting the stage for a flurry of reports that could significantly influence currency values.
On Tuesday, investors will scrutinize the services PMI data from the Eurozone, U.K., and U.S., a critical indicator of economic health. As the week progresses, Wednesday promises pivotal insights with inflation data from Australia and the Eurozone. In the U.S., focus will be on the ADP nonfarm employment change, ISM services PMI, and JOLTS job openings.
Thursday will unveil Switzerland’s CPI data, while the U.S. will report weekly unemployment claims, an essential gauge for labor market strength. Friday is set to be a blockbuster day for labor market statistics, featuring Canada’s employment change and unemployment rate, alongside the U.S. report on average hourly earnings m/m, nonfarm payrolls, and the unemployment rate.
Analysts predict that Canada will report an employment decline after a sharp drop in the unemployment rate recorded in November. This anticipated correction is not seen as a sign of deterioration but rather a response to the previous month’s volatility, according to analysts at RBC.
In the U.S., the consensus for average hourly earnings is set at 0.3% m/m, while nonfarm payrolls are expected to increase by 57,000, a decrease from 64,000 last month. With the unemployment rate projected to dip slightly from 4.6% to 4.5%, the data will provide critical insights into the ongoing labor market conditions.
Wells Fargo analysts caution that while hiring remains subdued, the job market shows signs of gradual cooling. The rise in the unemployment rate above the Fed’s neutral level and recent data quality issues due to the government shutdown add layers of uncertainty.
As this week unfolds, market participants will closely monitor how these reports shape policy expectations and economic outlooks across the globe. The upcoming data releases are vital not just for market trends but also for understanding the underlying economic resilience in various sectors.
Stay tuned as we track these developments closely, providing real-time updates on their implications for the FX market and global economy.
