Events to Look Out for Next Week

Andria Pichidi

December 30, 2021

Omicron increasingly dominates virus developments globally. Still, on the whole the reaction to the latest wave has been more nuanced and the feel is increasingly that the worst is behind us. Once the New Year kicks in next week, normal trading conditions will return, and we continue to expect that interest rates, the growth outlook, and more aggressive central banks could drive the markets. In regards to data, it will be a week of increased attention to the OPEC+ meeting and NonFarm Payrolls.

Monday – 03 January 2022

Holiday – New Year’s Day for UK, Australia, Canada, New Zealand and Japan
Markit PMIs (EUR, GMT 08:55) – The Eurozone’s & Germany’s December Manufacturing PMIs are expected to remain unchanged at 58 and 57.9 respectively.

Tuesday – 04 January 2022

Retail Sales & Unemployment (EUR, GMT 07:00 & 08:55) – Expectations for Germany Retail Sales are negative as a further decline is seen at -0.5% for November. Unemployment could continue to decline with the unemployment change at -15K in December.
OPEC+ Meeting – OPEC and non-OPEC Ministerial Meeting (ONOMM) to decide whether it will add another 400k bpd of production to global supply.
Markit PMIs (GBP, GMT 09:30) – December’s Services PMIs in the UK are expected to steady at 57.6.
ISM Manufacturing PMI (USD, GMT 15:00) – The ISM index is expected to dip to 60.5 from 61.1 in November, compared to an 18-year high of 64.7 in March, an 11-year low of 41.5 in April of 2020, and an all-time low of 30.3 in June of 1980.

Wednesday – 05 January 2022

Composite Markit PMIs (EUR, GMT 08:55-09:00) – The Eurozone’s & Germany’s Composite December PMIs are seen unchanged at 53.4 and 50 respectively. Eurozone PMI is at a 9 month low as covid measures hit the services industry. In Germany the respective PMI actually signal a contraction. Clearly, renewed pressures on the tourism and hospitality sectors are dampening the short-term outlook, but we expect this to be a temporary dent, rather than an end to the recovery. The fact that there were some signs of easing constraints in supply chains is also encouraging.
ADP Employment Change (USD, GMT 13:15) – Employment change is seen spiking to 438k in the number of employed people in December, compared to the 534k reading seen in November.
FOMC Meeting Minutes (USD, GMT 19:00) – The FOMC minutes should provide further guidance for 2022.

Thursday – 06 January 2022

Harmonized Index of Consumer Prices (EUR, GMT 13:00) – The prelim. German HICP inflation for December is anticipated to slow down to 5.6% y/y from 6.0% y/y.
ISM Services PMI (USD, GMT 15:00) – A decline from December’s spike to 69.1 is expected with the data slipping to 67.0.
ISM Non-Manufacturing PMI (USD, GMT 15:00) – The ISM-NMI index is expected to fall to 66.0 from an all-time high 69.1 in November, and a prior all-time high of 66.7 in October. Producer sentiment has been mixed thus far in December after robust November levels, with a disappointing Philly Fed report despite robust Empire State data.

Friday – 07 January 2022

Retail Sales (EUR, GMT 10:00) – Retail Sales should contract to -0.5% m/m in November, leaving the headline at 5.6% y/y. The three months trend rate turned negative however, and with virus restrictions being tightened again in parts of the Eurozone, the risk of further pressure on retailers is rising.
Non-Farm Payrolls (USD, GMT 13:30) – Expectations are for a 440,000 in December nonfarm payroll, after gains of 210k in November. The jobless rate should hold steady at 4.2% for a second month, down from 4.6% in October. Average hourly earnings are assumed to rise 0.4%, after gains of 0.3% in November and 0.4% in October, while the y/y wage gain should ease to 4.2% from 4.8% due to a hard comparison. In the last expansion we saw a 3.5% peak for y/y wage gains, in both February and July of 2019, before the pandemic boost to an 8.0% peak in April of 2020, and the ensuing strength in wage gains that has allowed continued robust y/y increases. We expect a robust payroll trajectory into the end of 2021 thanks to the last two stimulus packages and vaccines.
Labour Market Data (CAD, GMT 13:30) – Canada’s employment rose 153.7k in November, much better than expected, following the 31.2k rise in October. The jobless rate dove to 6.0% from 6.7%.

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Andria Pichidi

Market Analyst

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