NFP Week: Volatility Amid Key Economic Data & Inflation Concerns

The final month of the year is shaping up to be a whirlwind, packed with crucial economic data and market-moving events. Here's a quick breakdown of what’s on the horizon: The week kicked off with a notable rise in Australian retail sales. We saw a jump of 0.6%, beating expectations of 0.4% and significantly higher than last month’s 0.1%. This suggests robust consumer spending, which could impact inflation and the Reserve Bank of Australia’s (RBA) monetary policy in the coming months. 

Manufacturing Data in Focus 

Tomorrow, attention shifts to the U.S. Manufacturing PMI and ISM Manufacturing PMI. Both are expected to show slight improvements, indicating a potential recovery in manufacturing activity.

• U.S. Manufacturing PMI: Expected to rise from 48.5 to 48.8
• ISM Manufacturing PMI: Consensus points to an increase from 47.5 to 47.7

Midweek Highlights: GDP & Job Data 

Wednesday brings key releases, including:

• Australia’s Q3 GDP: Forecasted to increase from 1.0% to 1.1%, signalling steady economic growth.
• U.S. JOLTS Job Openings: Expected to rise from 7.443M to 7.490M, indicating resilience in the labor market.

Thursday: Fed Chair Powell Speaks 

On Thursday, all eyes will be on Fed Chair Jerome Powell’s speech.His commentary will be crucial in setting expectations for U.S. monetary policy as we move into 2024.

Friday: The Big One – NFP 

The week wraps up with the highly anticipated U.S. Non-Farm Payrolls (NFP) report. Given recent string U.S. economic data, I anticipate positive numbers, which could further strengthen the U.S. dollar and push the euro and Australian dollar lower. 

Market Outlook

• USD: Likely to remain strong amid robust economic indicators.
• EUR & AUD: Expected to face continued downward pressure, especially if U.S. data exceeds expectations.

With Christmas around the corner, inflationary pressures are also a concern. Consumer spending is surging, as seen in bustling shopping malls, and this could lead to further rate hikes from the RBA and other central banks. 

Stay safe, manage your risks, and be ready for a dynamic trading week! 

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