China | Emerging Markets | Europe | US
Key Events: NFP to Significantly Undershoot on Lower Immigration Flows
- By Macro Hive
Key Events
G10
In the US, the main data points are as follows:
- NFPs – Friday. Dominique expects about 150k relative to consensus 200k largely due to lower immigration flows. Even if a low NFP, as she expects, comes with steady unemployment and wage growth, it will likely lead the Fed to cut in December, in response to downside risks to unemployment.
- Manufacturing and services PMIs – Monday and Wednesday. These are more trading than economic events as PMIs have decoupled from broader GDP growth trends. Please see our event monitor dashboard for insights into the market impact of surprises.
In the Eurozone and UK, the main events will be:
- October EZ unemployment rate – Monday. The unemployment rate is expected to remain stubbornly low, despite growth worries.
- November PMIs – Monday and Wednesday. Preliminary European PMIs saw a large downshift in the composite number.
Elsewhere in G10:
- Switzerland November CPI – Tuesday. We see risk of an upside surprise following the UBS Survey, which revealed the largest increase in inflation expectations on record!
- Australia Q3 GDP – Wednesday. The economy likely expanded +0.5% through Q3, after a run of sub-par outturns. Markets are given most components in advance, so a large shock is required to stir a reaction on the release.
EM
- Chinese PMIs – Saturday and Monday. High-frequency data indicates a further improvement in manufacturing production compared to last month. Small increases in shipping costs and container throughputs also suggest an export growth as strong as last month. However, domestic commodity price development remains muted (on average slightly negative YoY). We agree with the consensus expectation of a modest improvement of the manufacturing PMI.
- Turkey inflation – Tuesday. Recent discounting and an ongoing slowdown in domestic demand should ensure MoM inflation eases to levels consistent with looser monetary policy.
- South Africa GDP – Tuesday. Mixed high-frequency data through the quarter (weakness in manufacturing and trade, growth in mining and construction) could mean another soft quarter for South Africa.
Central Banks in Action
- Fed Powell Q&A – Wednesday. This week is the last one before the pre-FOMC blackout. Powell’s Wednesday Q&A is likely to hint at the Fed decision, and his expectation of Friday’s NFP will be a key factor.
- NBP on hold – Wednesday. Temporary resumption of disinflation and extension of the energy price freeze will not shift the current rates-on-hold stance.
- RBI on hold – Friday. Elevated food price inflation will outweigh concerns over a slowing economy and keep the RBI on hold for a few more months.
Markets to Watch
- The dollar has turned lower from November highs. A weak outturn in the November payroll data would see long dollar positions unwind – we are long NZD/USD (target: 0.6250; stop: 0.5750) in case of this possibility.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)