It’s the US Nonfarm Payrolls Day Today
Today’s the first nonfarm Friday of 2017. Market consensus sees the US economy to have created 175.0K jobs in January and the unemployment rate staying put at 4.7%. Apart from this, the US ISM non-manufacturing purchasing managers’ index (PMI) is also expected to be today’s market mover. Further releases in the US docket include Markit services PMI, durable goods orders and a speech by the Federal Reserve Bank of Chicago President, Charles Evans.
Earlier today, a swathe of services PMI reports crossed the wires. The UK’s dominant services sector PMI dropped more than expected in January. In contrast, the Eurozone services PMI registered a rise during the same month. Moving ahead, investors await the Euro region’s retail sales data for December, due in a few hours.
Pound Sterling – UK Markets
The Pound is trading on a weaker footing against the US Dollar this morning, following release of downbeat services data. Britain’s services sector activity slowed for the first time in 4 months in January, amid a sharp rise in material costs. There are no other UK economic releases in the remainder of the day. With this, market participants now shift focus to next week’s economic data points namely manufacturing & industrial production and trade balance data along with the NIESR GDP estimate.
The Bank of England (BoE) maintained its current stance on monetary policy measures at its meeting yesterday. The policy makers indicated that they were in no hurry to increase borrowing costs as Brexit continues to raise uncertainty. Further, the central bank upgraded the growth forecasts for British economy in the current and next fiscal year, while it anticipated inflation levels to overshoot its 2.0% inflation target in the upcoming months. In a press conference, BoE Governor, Mark Carney indicated that central bank remains on track to make the required changes in interest rates.
US Dollar – US Markets
Maintaining its position in positive territory for the third consecutive session, the US Dollar is trading on a stronger footing against the shared currency this morning. Ahead in the day, a plethora of economic releases from the US are expected to keep investors on their toes. The monthly nonfarm payrolls data, scheduled to release later in the day, is anticipated to register an increase in January from the previous month. Additionally, the US unemployment rate and average hourly earnings data will also be on traders’ radar. In other economic news, durable goods orders and services sector data are also up for release today.
Yesterday, data showed that US jobless claims declined to an extremely low level last week. In addition to this, preliminary print of the US nonfarm labour productivity advanced more than expected in the last quarter of 2016. However, the broader trend remained uninspiring, as the productivity recorded its smallest annual increase since 2011. In other news, the New York City current business condition index registered a decline in January.
Euro – European Markets
This morning, the Euro is trading weaker against the greenback. Data released earlier in the session showed that services sector registered robust growth across the common currency region for January. However, the Italian and Spanish services PMI proved to be exceptions, as they painted a disappointing picture for the same month. Later today, market participants will focus on the Euro zone’s retail sales data for December, which is expected to register a rebound on a monthly basis, along with flash estimates of Italian consumer prices data for January.
Other Currencies – Highlights
The rampant Australian Dollar which had recorded its 5th consecutive rise against the greenback during the previous session, has witnessed a modest knock this morning, in the wake of China’s downbeat factory activity data. The Caixin manufacturing PMI in China, Australia’s largest trading partner, edged down in January, as output and new orders lost momentum. However, the index managed to remain in expansionary territory for a seventh consecutive month. Earlier in the session, data showed that Australia’s performance of services index expanded at a slightly slower pace in January.
In other economic news, Australian Bureau of Statistics revealed that trade surplus widened to a record high in December, backed by the biggest increase in iron ore and coal prices in almost 7 years. Meanwhile, Australia’s building permits dropped in December, reversing a sharp rise from the prior month. Next week, market participants will keep a track of the Reserve Bank of Australia’s monetary policy decision, retail sales and housing market data for further direction in the Aussie Dollar - US Dollar currency pair.