US jobs report will take a spotlight next week followed by worldwide manufacturing and services PMI surveys and Eurozone GDP and inflation numbers. Also, central banks in the UK, Australia, Euro Area and Brazil will be deciding on monetary policy, while the OPEC+ meeting is expected to offer guidance into the production plans from March. The earnings season will also be in the spotlight, with GM, Alphabet, Meta, Amazon and Ford due to report.
Next week, investors will get an update on the strength of the US labor market as the impact of the rapid spread of the omicron that led to more shutdowns and an increase in hospitalizations will now become more clear. Nonfarm payrolls likely increased by 200 thousand after rising by 199 thousand in December, the smallest employment gain in 12 months. The unemployment rate is seen steady at 3.9% and the earnings growth is expected to remain elevated. JOLTs job openings and quits, ADP report and productivity and labor costs for Q4 will also be in the spotlight as well as the ISM reports for both manufacturing and services index, final Markit PMIs, Chicago PMI and factory orders.
Meanwhile, the earnings season continues with Advanced Micro, Exxon Mobil, GM, Alphabet, Meta, Amazon, Honeywell, Ford, PayPal, and Wynn Resorts due to report quarterly results.
Elsewhere in America, the central bank of Brazil will likely raise its policy interest rate by another 150 bps to 10.75%, bringing borrowing costs to the highest level since April 2017 and aiming to curb rising inflation. Key data to follow include Canada employment figures, producer prices, monthly GDP, and Ivey and Markit PMI surveys; Mexico fourth-quarter GDP figures, business and consumer morale and Markit Manufacturing PMI; and Brazil foreign trade, industrial production, producer prices and Markit PMIs.
In Europe, all eyes will be on the BoE and the ECB monetary policy decisions on Thursday. The Bank of England is largely expected to increase the key interest rate by a quarter-percentage point to 0.5%, after a 15bps hike in December, as the inflation surged to 1992 highs of 5.4%. The ECB however, will likely leave interest rates unchanged but investors will look for any comments on the inflation outlook. Markets now anticipate a 10bps hike to the deposit rate by the October meeting only. Meanwhile, preliminary GDP growth rates for the Eurozone and Italy and early estimates for Euro Area, Germany, Spain, France inflation will provide an update on the economic recovery and price pressures, at a time the omicron coronavirus variant started to spread in the European continent. Other important economic releases include Germany unemployment and retail sales, Euro Area unemployment, UK consumer credit and mortgage indicators and final Markit PMIs.
In Asia-Pacific, the lack of Chinese indicators will stand out, as celebrations for the Lunar New Year and the following festivities will occupy most of the week. Still, Sunday will see China’s Caixin and NBS Manufacturing PMI releases, which are expected to show a halt in Chinese manufacturing sector growth in January. Japan will be releasing January’s consumer confidence indicator and the jobless rate for December, which is forecasted to remain unchanged at 2.8%. Down south, the Reserve Bank of Australia interest rate decision will be highly monitored for clues on its forward guidance, after hotter-than-expected inflation data strengthened the case for a rate hike as soon as May. Meanwhile, the rest of the week should be dominated by more January PMI figures, CPI numbers for Indonesia, Thailand and South Korea, and India 2022-23 government budget.
On the earnings front, results will be coming from Chinese e-commerce giant Alibaba, Japanese industrial conglomerate Mitsubishi and automaker Honda Motor, and Indian conglomerate ITC.