Week Ahead

It will be a busy week in the US with center stage taken by labour market report, FOMC meeting minutes, ISM manufacturing and services PMI, foreign trade, factory orders, and Jolts Job Openings. Elsewhere, inflation rates for December will be released for Euro Area, Germany, France, Netherlands, Turkey, Switzerland, Philippines, and Indonesia. Finally, investors will pay attention to manufacturing PMIs from China, India, Spain, South Korea, Canada, Italy, and Switzerland.

The first week of 2023 will be dominated in the US by non-farm payrolls report, and the Federal Reserve December meeting minutes. In December, the economy likely added 200k jobs, with unemployment sticking to 3.7% and annual wage growth remaining strong at 5%. Meanwhile. The FOMC meeting minutes should provide further clues on how long the policymakers plan to keep interest rates elevated and if any big adjustments would be necessary. Also, investors will follow closely ISM PMI: the manufacturing PMI is likely to remain in the contractionary territory while the non-manufacturing gauge may show services growth slowed in December. Other important releases include trade balance, JOLTs Job Openings, and factory orders.

In Europe, preliminary estimates are expected to show the annual inflation rate across the region continued to slow down in December, likely returning to single digits in both the Euro Area and Germany. Other data to follow include Eurozone business survey, unemployment rate and producer prices; Germany jobless rate, domestic and international trade and factory orders; Switzerland CPI and retail sales; and Turkey inflation rate and balance of trade. Also, final figures for S&P PMIs will be released. On the monetary policy side, the National Bank of Poland is expected to hold its benchmark reference rate unchanged at 6.75% for the fourth consecutive time at its first 2023 meeting. In the United Kingdom, the economic calendar will be soft, with only the BoE’s monetary indicators, updated S&P Global PMIs and Halifax housing prices to be released.

In Asia, all eyes will be on December’s Chinese Manufacturing PMI data, expected to point to a further contraction in factory activity as the world’s second largest economy deals with soaring Covid infections ahead of the country’s reopening. In Japan, investors will closely watch the consumer confidence gauge for December. Meanwhile, India and South Korea will release manufacturing PMI figures. Elsewhere, Singapore will publish Q3 GDP data, while the Philippines and Indonesia will release their CPI prints for December.