Economic Analysis

The first week of the last month of 2019 is witnessing many important first-class events. Highlights of these events are as follows:

- Lagarde Governor of the European Central Bank: Monday, 05:00 pm. The speech reflects the official position of the central bank, and therefore each letter is carefully examined by market participants and analysts. If the speech refers to any conclusions on monetary policy or a clear assessment of the economic and financial situation of the euro area, the speech affects the EU currency.

- US ISM Manufacturing PMI: Monday, 06:00 PM. The previous ISM manufacturing PMI showed a lower than expected figure for the past four months, reaching 48.3 in October - below the 50-point level that is the key threshold between expansion and contraction. The November report is likely to improve. The results are the first hint on Friday's jobs report. Expected increase to 49.4.

- Australian Interest Rate Decision: Tuesday, 03.30 AM. The Reserve Bank of Australia left its benchmark interest rate unchanged at 0.75% in November, after gradually reducing it from 1.50% during the year. Recent comments from the Canberra Foundation have shown that the door is open for further facilitation. However, Governor Philip Lowe and his colleagues will likely leave the monetary interest rate unchanged at this point. The RBA is meeting to set prices only again in February.

- Australian GDP: On Wednesday, the Australian economy expanded by 0.5% every three months in the first and second quarters of 2019. The forthcoming third quarter release is expected to be 0.5% identical. The hidden economy suffers from Sino-US trade wars. While GDP statistics will be released after the Reserve Bank of Australia's decision, central bankers may now have the data.

- US ADP Nonfarm Payrolls: Wednesday, 04:15 pm. The employment report for the largest private sector payroll provider in the US forms the outlook for the government jobs report - which could move the market significantly. Back in October, the ADP reported a net profit of 125,000 jobs, as expected. A similar increase is likely in the publication of November - 135 thousand.

- Canadian Interest Rate Decision: Wednesday, 06:00 PM. Bank of Canada Governor Stephen Boloz appeared to reject speculation of a rate cut. Most economic indicators are optimistic, and despite the failure of oil prices to rise, they remain at satisfactory levels. The last time the BoC rate was changed was in October 2018. This time is likely to be similar - with the rate remaining at 1.75%.

- ISM Non-Manufacturing PMI: Wednesday, 06:00 PM. The initial ISM survey of the services sector in October was surprised by a significant rise to 54.7, reflecting healthy growth. The survey indicated that the industry is in good condition as consumer consumption has increased. This November Black Friday report is likely to continue to show more positive expansion. Wait 54.5 points expected. This indicator is a hint on NFP employment.

- Non-Farm Payrolls in the United States: Friday, 4:30 pm The US economy received 128,000 jobs in October, below the long-term averages but above expectations, due to a strike at GM. Moreover, revisions in previous months showed that job growth was much better than initially reported, with upward revisions adding 95,000 to the US workforce. While the monthly wage growth rate was only 0.2%, profits increased by 3% annually, an encouraging result. The NFP is expected to rise by 183K, monthly wage growth of 0.3% and annual salary increase of 3%.

- Canadian Jobs Report: Friday, 4:30 pm After taking advantage of popular labor market figures during most of the 2019 months, Canada lost 1,800 jobs in October, worse than expected. The country is likely to return to its net gain in November, with an expected gain of 15.9K. The unemployment rate remained at 5.5% and holds expectations for a rise to 5.6%.

- Michigan Consumer Confidence Index: Friday 06:00 PM. Non-farm payrolls will have an extended impact until the release of the US Consumer Confidence results which could put the market in a strong state of movement. The forward-looking measure is released in early December, before the Christmas holidays. After the decline in US consumer confidence in October, confidence recovered and topped 96.8 points in November. A marginal drop to 95.7 is expected.

* All times are KSA