Economic Analysis

The most important data expected this week

United State

ADP Nonfarm Payrolls Change (Jan) - Wed (03:15 PM)

The non-farm private sector added 235 thousand jobs to the US economy in December 2022 which is higher than the revised number of 182 thousand jobs in November and higher than the market expectation of 150 thousand jobs. The next release is expected to be around 131 to 170 thousand jobs.

ISM Manufacturing PMI (Jan) - Wed (05:00pm)

The index fell slightly below expectations at 48.5 to 48.4 in December 2022 which is the second consecutive month of decline indicating a decline in the industrial sectors (corporate activity). Expectations indicate that the next release of the index may be 48, which indicates further declines in industrial activity.

Job Opportunities (JOLTs) (Dec) - Thursday (05:00 PM)

The employment opportunity index decreased slightly by 54 thousand jobs from 10.5 million jobs in November 2022 compared to the market expectation of 10 million jobs indicating a strong labor market. Expectations indicate that the next issue may decrease slightly to 9.5 million - 10.23 million.

US Federal Reserve Interest Decision - Wednesday (09:00 PM)

Jerome Powell said: "Fighting inflation and price stability are the main goals of the US Federal Reserve to obtain a strong economy, but restoring price stability in the presence of a high inflation rate may require unusual methods in the short term, such as raising interest rates, for example." Powell focused on the independence of the US central bank and did not give much detail about the upcoming interest rate decision. The US Federal Reserve raised the interest rate by 50 basis points to 4.25% - 4.5% at its last meeting in 2022, which is the highest rate level since 2007, but the decision came in line with market expectations. Officials at the US Federal Reserve have indicated that they may keep interest rates above 5% in 2023. Most expectations indicate that the US Federal Reserve may raise interest rates at the next meeting by 25 basis points to around 4.75% from 4.50%.

Unemployment Claims Rates - Thursday (03:03 PM)

Unemployment claims decreased by 6,000 from the revised weekly figure of 186,000 at the end of January 21, 2023, which is the lowest since April 2022, but less than expectations (at 205,000). This indicates a tight labor market, which may prompt further tightening by the US Federal Reserve. Forecasts indicate that jobless claims may rise to 187-200K in the next release.

Private Employment Report (January) - Friday (03:30 PM)

The US economy added 223 thousand jobs in December 2022, which is the least since December 2020, after the revised number around 256 thousand (up) in November, missing market expectations around 200 thousand. Expectations indicate that the next release may drop to 190-185 thousand jobs.

Unemployment Rate (Jan) - Friday (03:30 PM)

Unemployment rates in the United States fell to 3.5% in December 2022, which is lower than market expectations of 3.7%, but the figure is identical to September and July numbers, which are the lowest since February 2020. Expectations indicate that the unemployment rate may rise slightly, by 0.1%, to become 3.6%.

Britain

Manufacturing PMI (Jan) - Wednesday (11:30 am)

The index rose to 46.7 points in January 2023 from 45.3 points in December, contravening market expectations of 45.5 points. The data indicates that the index continued to decline for the sixth month in a row, which indicates weak factory activity, but it is the lowest drop since September 2022.

BoE Rate Decision (Jan) - Thursday (02:00pm)

A majority (3-6) of the Bank of England voted to raise interest rates by 50 basis points to 3.5% at the December meeting, pushing interest rates to their highest level since 2008. Expectations indicate that the Bank of England may raise interest rates at its next meeting by 50 basis points. to 4% from 3.5%.

Euro-zone

Inflation Rate - Wednesday (12:00 PM)

The European Consumer Price Index fell to 9.2% in December 2022 from 10.1% in October 2022 (the highest on record). Inflation is still high in the euro area, which may prompt monetary policy makers at the European Central Bank to tighten further to curb inflation by raising interest rates. The upcoming release indicates that inflation rates may drop to 9-8.7%.

ECB Interest Decision (Feb) - Thursday (15:15 PM)

The European Central Bank may continue to raise interest rates by 50 basis points at the next February-March meeting. But this matter will depend mainly on the economic figures associated with unemployment and inflation rates. The next meeting is expected to carry an increase of 50 basis points from 2.5% to 3%.

Canada

GDP (MoM) (November) - Tuesday (03:30pm)

The Canadian economy has suffered from a decline in the gross domestic product (GDP) figures, as this indicator continues to decline, which indicates the possibility of a recession. Forecasts indicate that the GDP will remain stable in the next release at 0.1%.

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