Weekly Outlook 2nd Jan 2017

January 3, 2017


Welcome to the first easyMarkets weekly outlook for 2017 starting this Monday 2 January. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. Be sure to catch up with our Friday morning report that looks back at how the events played out and with a look at Friday’s events. This week we have important data coming out of the two largest economies in the world with manufacturing and employment data coming out of the US along with the FOMC report. And for the Eurozone the Consumer Price Index and ECB Monetary Policy Meeting Accounts are due.

Event: US ISM Manufacturing PMI

Date: Tuesday 03 January 2017 at 15:00 GMT

Markets affected: EUR/USD

Trending hashtags: #usd, #pmi

The US economy continues to show good growth with last November’s Purchasing Manufacturers Index (PMI) outstripping expectations of 52.1 and coming in at 53.2. This showed significant growth from the October figure of 51.9 – also good considering that anything over 50 is considered positive for the US dollar. Analysts are forecasting more growth under new President Donald Trump who promised spending on infrastructure and trade deals more favourable to domestic manufacturers. The market is predicting more growth for the December figure out on Tuesday with a consensus of 53.5.

Event: EU Consumer Price Index (YoY, December)

Date: Wednesday 04 January 2017 at 10:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur, #cpi

The Eurostat will be releasing the Consumer Price Index for the Eurozone on Wednesday morning. This accounts for the changes in buying trends and inflation in the region. Last reading came in at 0.6% and analysts are expecting December’s figure for the year-on-year change to be even better at 1%. Meanwhile Core CPI, measuring price changes in a basket of goods (not counting food, alcohol, tobacco and energy due to price volatility), is expected to remain the same as the previous figure of 0.8%.

Event: US FOMC Minutes report

Date: Wednesday 04 January 2016 at 19:00 GMT

Markets affected: EUR/USD,

Trending hashtags: #fomc, #usd

The Federal Open Market Committee will be releasing their first report for 2017. This is the first of eight reports for the year stating their position on monetary policy. Last month the Board of Governors of the Federal Reserve increased interest rates by 0.25%, the first time in 12 months, and sent the US dollar soaring. More statements on the health of the economy will be watched for as the nation head towards the changeover in leadership with the new President set to enter the White House on 20 January.

Event: ECB Monetary Policy Meeting Accounts

Date: Thursday 05 January 2017 at 12:30 GMT

Markets affected: EUR/USD

Trending hashtags: #ecb, #eur

The Eurozone goes under the microscope on Thursday with the European Central Bank’s Monetary Policy Meeting Accounts. The report gives a summary of the economic, financial and monetary developments for the region. With three major elections due in the zone this year, Germany, France and The Netherlands, officials will be wanting to paint a positive picture which may be a challenge considering euro weakness against the US dollar and talks of price parity.

Event: US Employment Data

Date: Friday 06 January 2017 at 13:30 GMT

Markets affected: EUR/USD,

Trending hashtags: #nfp, #usd

US employment data is due as usual on the first Friday of the month. Average Hourly Earnings (YoY) for December are expected to rise from the previous -0.1% to 0.3%. The Unemployment Rate which  fell to a nine-year low last November to 4.6% is expected to rise fractionally for the December reading to 4.7%. And finally, the all-important Non-Farm Payrolls are expected to rise 175,000, a slight contraction of November’s reading of 178,000.


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