It’s the US Nonfarm Payrolls Day!
The US nonfarm payrolls report for December remains the key event today. The Federal Reserve continues to monitor the health of the US labour market to determine the timing of the next interest rate rise. Apart from this, the nation’s trade balance and durable goods orders data are also up for release later in the day.
The British economic calendar sports a deserted look today. In the Euro zone, data showed that German retail sales fell more than expected in November. Going ahead, the Euro zone’s retail sales, business climate and consumer confidence data are up for release in a few hours.
Pound Sterling – UK Markets
The Pound rose for a second consecutive session against the US Dollar yesterday, following the release of upbeat services purchasing managers’ index (PMI) in the UK. The index showed that growth in service sector expanded for a third consecutive month in December and at the quickest pace since mid-2015. The upbeat services PMI along with positive figures from manufacturing and construction sectors released earlier in the week have highlighted UK’s robust economic performance in the aftermath of the Brexit vote. Separately, a chief economist at the Bank of England, Andy Haldane has pointed out that UK’s economic resilience in the wake of Brexit vote has not changed the central bank’s view that the nation will suffer a slowdown in 2017.
The Pound is trading on a weaker footing against the shared currency and the greenback this morning. The UK economic calendar is devoid of key economic releases today. Investors now shift focus to next week’s data calendar which features the release of UK’s NIESR GDP estimate along with the nation’s manufacturing and industrial production data.
US Dollar – US Markets
The US Dollar traded lower against its major peers yesterday, as market participants digested two reports on the US labour market that indicated mixed conditions. Data showed that the nation’s private employers added less than expected jobs in December. On the other hand, first time jobless claims fell to a nearly 43-year low last week. Separately, the US service sector activity unexpectedly remained steady at a
13-month high in December, suggesting that growth in the nation’s service sector remains strong.
The US Dollar is trading on a stronger footing against the shared currency and the Pound this morning. Looking ahead, the nonfarm payrolls data scheduled to release later in the day will be the first major data print on the US economic calendar for 2017. The nonfarm payrolls figures for December are projected to come in line with the November reading. Moreover, markets participants would also focus on US unemployment rate, average hourly earnings and trade balance data, scheduled to be released later today.
Euro – European Markets
The Euro is trading higher against the Pound and lower against the greenback this morning. Data released earlier in the session showed that German retail sales dropped more than expected in November. However, retail sales rebounded on an annual basis during the same month. Meanwhile, the nation’s seasonally adjusted manufacturing orders declined in November, after registering strong growth in the previous month. In other economic news, French trade deficit narrowed in November, backed by robust exports. Moving ahead, a slew of economic data points such as the Euro zone’s retail sales data along with the business climate and consumer confidence index are set to cross the wires in a short while.
Yesterday, the shared currency ended higher against its major peers, after the Eurostat indicated that the Euro region’s producer prices advanced more than expected in November, mostly driven by soaring energy prices. At the annual level, it recorded the first increase since June 2013, thus indicating that inflationary pressures are building up within the Euro zone.
Other Currencies – Highlights
The Canadian Dollar is trading lower against the greenback this morning. There is a string of economic data points scheduled for release in Canada today. First up for release is Canada’s international merchandise trade balance and is likely to post a wider deficit for November. Further, the nation’s unemployment rate data is also due later in the day and is expected to rise to 6.9% in December after easing more than market expectations to 6.8% in November. Today’s job report will be of key interest to the Bank of Canada as it announces its overnight rate target later this month.
Yesterday, the Canadian Dollar continued its rally for a third straight session against the US Dollar. On the data front, Canada’s raw material price index fell more than anticipated, while the industrial product price index advanced at a slower pace in November. Earlier in the week, the nation’s RBC manufacturing PMI slightly rose in December, as new work advanced to the highest level in two years.