Week ahead: US jobs report kicks off 2024

Here are the week’s key events:

Jobs data from the US will be the major market news story this week as the new trading year kicks off with global stock markets close to all-time highs. The nonfarm payrolls report is due Friday, whilst there is a busy schedule of economic releases in the day leading up.

Monday

New Year’s Day holiday sees markets shut but some Chinese manufacturing and non-manufacturing PMI data from Sunday will be worth looking at for the reopen on the 2^nd.

Tuesday

The Caixin manufacturing PMI for China is the early focus for Asian markets, though Tokyo is closed for a second day. Shop price index data for the UK will be watched by sterling traders. It’s also the time of year when retailers start releasing their Christmas trading statements so watch for volatility in certain stocks – B&M and Next this week on Thursday. Final manufacturing PMI data will be considered – Germany in the doldrums still at 43.1 on the last reading, UK at 46.4 and US at 48.2.

Wednesday

Two main events for markets today are the ISM manufacturing PMI from the US and the JOLTS job openings data. The last ISM report came in at 46.7 and showed economic activity in the manufacturing sector contracted in November for the 13th consecutive month following a 28-month period of growth, however prices did pick up. Job openings, meanwhile, were softish last time out. Jolts job openings slid to 8.7 million in October, which was well below estimate, to the lowest level since March 2021. At the same time the ratio of vacancies for every unemployed worker fell to 1.3, getting much closer to the pre-pandemic high of 1.2.

Thursday

China’s Caixin services PMI will be the focus for the Asian session along with the final Japanese manufacturing PMI data. German preliminary CPI inflation reports come in all morning from the various states with the spectre of deflation stalking the scene. Swiss CPI is also due ahead of the weekly unemployment claims data and ADP nonfarm employment report, which will be tasters ahead of the main NFP release from the Bureau of Labor Statistics tomorrow.

Friday

It’s jobs day! The December payrolls report comes as labour market data has generally underscored the soft-landing narrative favoured by most investors at the moment. November’s report showed unemployment fell to 3.7% from 3.9%, whilst the headline payroll number was 199k vs 150k in the prior month. December’s number can be noisy and tricky however due to seasonal factors. The key thing for markets is whether it’s showing enough of a cooling to justify the Fed cutting rates early next year or will it hold up and sustain inflation for a bit longer?