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The Week Ahead: 5 Things to Watch on the Economic Calendar

EconomyJan 01, 2018 05:47AM ET
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© Reuters. 5 things to watch on the economic calendar this week - Investors will get back to work fast when markets reopen after the Christmas and New Year’s holidays this week, with all eyes on the monthly U.S. employment report due Friday.

Global financial markets will also focus on Wednesday’s minutes of the Federal Reserve’s December policy meeting for further hints on the future path of monetary policy.

In China, market watchers will be looking out for data on the country's manufacturing sector for fresh indications on the health of the world's second biggest economy.

Friday’s euro zone inflation data will be closely watched amid persistent concerns over sluggish price growth in the region.

Elsewhere, in the U.K., traders will focus on a trio of reports on activity in the manufacturing, construction and dominant service sector amid growing concerns over effect of Brexit on the economy.

Ahead of the coming week, has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.

1. U.S. Jobs Report for December

The U.S. Labor Department will release its December nonfarm payrolls report at 8:30AM ET (13:30GMT) on Friday.

The consensus forecast is that the data will show jobs growth of 189,000, following an increase of 228,000 in November; the unemployment rate is expected to remain unchanged at 4.1%, while average hourly earnings are expected to rise 0.3% after an increase of 0.2% a month earlier.

An upbeat employment report would underline the case for higher interest rates in the coming months.

Besides the employment report, this week's calendar also features U.S. data on manufacturing and service sector growth, construction spending, auto sales, weekly jobless claims, factory orders as well as monthly trade figures.

2. Fed FOMC Meeting Minutes

The Federal Reserve will release minutes of its December policy meeting on Wednesday at 2:00PM ET (19:00GMT).

The U.S. central bank hiked interest rates for a third time in 2017 at the conclusion of its two-day policy meeting on December 14, in what was a widely anticipated decision and indicated that it would stay on a similar path next year.

The central bank also said it expected inflation to remain below its target for another year, tempering expectations for an accelerated pace of rate hikes in 2018.

3. Euro Zone Flash December Inflation Figures

The euro zone will publish flash inflation figures for December at 10:00GMT (5:00AM ET) on Friday.

The consensus forecast is that the report will show consumer prices rose 1.4%, compared to an increase of 1.5% in November, while core prices are expected to gain 1.0%, up from 0.9% in the prior month.

In its final meeting of 2017 the European Central Bank hiked its growth forecasts, but admitted that inflation still won’t be on target by 2020. The ECB targets inflation of close to, but just below, 2.0%.

The ECB also voted to leave interest rates on hold and repeated its commitment to running an asset-purchase stimulus program until at least next September.

4. U.K. December PMI surveys

The U.K. will release survey data on December manufacturing sector activity on Tuesday, followed by a report on the construction sector on Wednesday and the service sector on Thursday.

The manufacturing PMI is forecast to inch down to 58.0 from 58.2 a month earlier, construction activity is expected to improve slightly to 53.2 from 53.1, while a survey on Britain's giant services sector is forecast to tick up to 54.1 from 53.8 last month.

The Bank of England left interest rates on hold at its final meeting of 2017, in a widely anticipated decision, just a month after the first rate hike in nearly a decade.

The BoE said there has been “progress” in negotiations between the UK and Brussels, which has reduced the risk of a disorderly Brexit and is likely to support household and business confidence.

5. Chinese Manufacturing Data for December

The Caixin manufacturing index is due at 01:45GMT Tuesday (9:45PM ET Monday). The survey is expected to ease to 50.6 from 50.8 in the preceding month.

The official manufacturing purchasing managers' index released on Sunday slowed slightly to 51.6 in December from 51.8 in November, in line with economists’ forecasts.

Anything above 50.0 signals expansion, while readings below 50.0 indicate industry contraction.

China’s manufacturing sector has largely maintained momentum despite recent moves to curb heavy industry in a bid to reduce the country’s chronic air pollution.

Stay up-to-date on all of this week's economic events by visiting:

The Week Ahead: 5 Things to Watch on the Economic Calendar

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