The markets open a new week in December with the economic calendar busy with the monthly data. A busy week for most of the G7 currencies, this week will see the RBA and the Bank of Canada holding their final monetary policy meetings for this year. No changes are expected from both the central banks.
In the U.S, economic data will focus on the ISM’s PMI’s followed by the ADP private payrolls data. This will culminate with Friday’s non-farm payrolls report. This will be the final NFP report before the Fed will meet in a few weeks time to raise interest rates.
Elsewhere, GDP reports are also lined up for Australia, the Eurozone, and Japan for the third quarter.
Here’s a quick recap into this week’s economic calendar for the currency markets.
U.S. payrolls and ISM data to set the stage for the Fed meeting
The markets will be looking towards a host of economic releases from the United States this week. Most importantly, the November unemployment report will be the main focus. This will be the final payrolls report that the Fed will be able to assess before it decides on the interest rate hikes.
So far, economic data from the U.S. has been consistent with the major themes of tighter labor market and expanding economy. In her recent testimony to the U.S. Senate, the Fed Chair Janet Yellen said that the current economic conditions were supportive for another rate hike.
Despite the Fed Chair’s repeated comments as well as other Fed official’s views on rate hikes this month, the U.S. dollar has remained broadly flat. For the November payrolls report, focus will turn to the wage growth component. Economists forecast wage growth rising 0.3% on the month. This comes after October’s wage data showed a flat reading.
The Fed remains positive that further expansion in the economy will lead to a tighter job market that will eventually see the wage growth rising. Consumer prices are expected to rise eventually as a result.
