Despite a paucity of corporate earnings, there is no shortage of fodder for traders as we approach a key moment for Brexit, the final nonfarm payrolls release before the Fed’s December meeting and a good smattering of PMI releases to chew on.

Brexit

 

Monday kicks off with British prime minister Theresa May in Brussels for lunch with European Commission president Jean-Claude Juncker. It is hoped that a pledge to offer more cash for the divorce bill will uncork talks on Britain’s future relationship with the EU.

Whilst the financial settlement appears to be resolved, it is unclear whether ‘sufficient progress’ has been made on the contentious topics of the Irish border and citizens’ rights.

GBPUSD rallied on news that the UK was prepared to up its offer, but the bulls have been kept on a fairly tight leash since as there are still numerous doubts about whether the European council will officially recommend moving onto the next phase of the negotiations at its meeting on December 14-15th.

NFP

 

Fridays sees the release of the final nonfarm payrolls and average earnings report ahead of the Federal Reserve’s policy meeting a week later. Whilst a rate hike is all but a certainty, the monthly NFP report will be as closely watched as ever.

Jobs growth missed the mark with 261k jobs added in October against expectations for more than 310k.  This was the best month of jobs gains since July and the unemployment rate actually fell to 4.1% and the revisions to the prior two months means there is nothing in this to stop the Fed from hiking in December.

Nonfarm payrolls for employment for August was revised up from +169k to +208k, and the change for September was revised up from -33k to +18k , meaning employment was 90k higher than previously reported.

Of concern for the Fed is that wage growth has stalled and this raises doubts about the pace of inflation growth. Average hourly earnings rose 2.4% year on year, well down on the 2.9% reported last month and short of expectations for 2.7%. Again it’s a case of strong jobs growth but where is the wage growth? Without wages going up the Fed is going to struggle to achieve its inflation target.

Services PMIs

 

The UK services sector, which accounts for about 80% of the British economy, is the main focus on Tuesday as traders look to see whether the economy is showing signs of stress.

The ISM non-manufacturing PMI is due later in the day and expected to confirm the US economy is on a solid trajectory following the upward revision to Q3 GDP growth last week. The world’s largest economy expanded at annual rate of 3.3% in the third quarter, up from a previous estimate of 3%.

Economic Calendar

(All times GMT)

Monday, 4 December

00:30 – Australia company operating profits

08:00 – Spain unemployment change

09:30 – Eurozone Sentix investor confidence

09:30 – UK construction PMI

All day – Eurogroup meetings

15:00 – US factory orders

Tuesday, 5 December

00:01 – UK BRC retail sales monitor

00:30 – Australia current account, retail sales

01:45 – China Caixin services PMI

03:30 – Reserve Bank of Australia cash rate & rate statement

05:00 – Bank of Japan core CPI inflation

09:00 – Eurozone final services PMI

09:30 – UK services PMI

13:30 – Canada trade balance

15:00 – US ISM non-manufacturing PMI

Wednesday, 6 December

00:01 – BRC shop price index

00:30 – Australia GDP

07:00 – German factory orders

13:15 – US ADP nonfarm employment change

13:30 – Canada labour productivity

15:00 – Bank of Canada rate statement, overnight rate

15:30 – US weekly crude oil inventories

Thursday, 7 December

00:30 – Australia trade balance

08:30 – UK Halifax house price index

13:30 – Canada building permits

13:30 – US unemployment claims

15:00 – Canada Ivey PMI

23:50 – Japan final GDP

Friday, 8 December

00:30 – Australia home loans

Tentative – China trade balance

09:30 – UK manufacturing production, goods trade balance

13:30 – US nonfarm employment change, average earnings

Saturday, 9 December

01:30 – China CPI and PPI inflation

Source: Bloomberg

or LOGIN as existing customer



Any information, analysis, opinion, commentary or research-based material on this page is for information purposes only and is not, in any circumstances, intended to be an offer of, or solicitation for, a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any person acting on it does so entirely at their own risk and ETX Capital accepts no responsibility for any adverse trading decisions. You should seek independent advice if you do not understand the associated risks.