European Session:
In the European session, we will get flash PMIs for the UK and major Eurozone economies. However, the data is unlikely to change much for the respective central banks.
In fact, the BoE is expected to cut the bank rate by 25 bps, bringing it to 3.75%. They will likely proceed cautiously from there as interest rates will be in their “fairly broad” 2-4% neutral range. The market expects at least one more cut in 2026 after Thursday’s cut.
On the ECB side, the central bank is expected to keep everything unchanged and not give too much leeway in terms of further guidance. Almost all ECB members have repeatedly said that the next step could go either way and that they would not react to small or short-term deviations from their 2% target.
American session:
In the US session, needless to say, all eyes will be on the US NFP report and nothing else will matter. In fact, with US flash PMIs also on the agenda, the market is highly likely to trade based on the US jobs report.
Non-farm payrolls in November are expected to be 50K versus 119K earlier, while the unemployment rate is expected to remain unchanged at 4.4%. Average hourly earnings Y/Y are expected to be 3.6% compared to 3.8% previously, while the M/M figure is seen at 0.3% compared to 0.2% previously.
There is much talk that the report may be skewed by noise as the data collection process has been affected by the shutdown. Additionally, Fed Chairman Powell said at the press conference that he thinks job gains have been overstated by 60K in recent months and he thinks payrolls are negative 20K per month.
Therefore, the unemployment rate will likely be the most important metric in terms of market reaction, but large deviations in payrolls will also draw market attention.
Central Bank Speaker:
- 11:30 GMT/06:30 ET – ECB’s Villeroy (Dovish – Voters)
- 17:45 GMT/12:45 ET – BOC Governor Macklem (Neutral – Voter)
This article was written by Giuseppe Dellamota on investlive.com.
Source link
