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US jobs report expected < 100k
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ISM manufacturing forecast for another contraction
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UK manufacturing PMI seen at 48.2
It’s been a heavy week on the economic calendar with several big events having a clear impact on the markets. We’re not quite done with it yet though as two major economic data points from the US this afternoon will likely drive the markets into the weekend - note that these will be an hour earlier than usual due to Europe moving off daylight savings time and the US not doing so until this weekend meaning the time difference is 1 hour less.
9:30 AM GMT - UK manufacturing PMI: Now that Brexit has taken a back seat for the time being ahead of the December general election there will likely be a greater focus on the economic releases from the UK and one area of interest is the recent slowdown in manufacturing. A reading of 48.2 is expected after 48.3 prior and it would be quite a surprise if we move back above 50 and out of contraction territory after 6 consecutive readings below that mark.
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Create account Try a demo Download mobile app Download mobile app12:30 PM GMT - US non-farm payrolls: For the month of October only 90k jobs are expected to have been added in the US after 136k in September. This drop can be explained away by the GM workers strike which account for a drop of 50k employees. Average earnings M/M are seen rising to +0.3% from 0.0% prior but inflation issues surrounding wages are less important than they have been in recent years. The unemployment rate is forecast to tick higher to 3.6% from 3.5% prior. Wednesday’s ADP employment change came in bang inline with the 125k forecast but there was a large downwards revision to the prior month of -42k to now leave it at 93k. A timely reminder to keep an eye out for revisions.
2:00 PM GMT - ISM manufacturing PMI: After the Fed delivered their 3rd rate cut in as many meetings on Wednesday the message was clear that the future path of monetary policy will be dependent on data and trade developments. The ISM manufacturing PMI is one of those key releases to watch and weakness here was arguably one of the factors that contributed to the Fed easing with 5 of the past 6 months missing estimates. The last 2 months have also been in contraction territory and the consensus is calling for another sub 50 print in October with 49.0 forecast after 47.8 prior
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Rounding off the week we have several Fed speakers with Clarida and Quarles (5:00PM GMT) and Williames (6:30PM GMT) all set to talk and any comments on the US data this afternoon could gain a higher level of scrutiny than usual.
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