Economic calendar: USDCAD waits for labour market data

Summary:

• European inflation expected to decelerate slightly

• US and Canadian labour market reports to be released in the afternoon

• Powell and his 2 predecessors to give joint interview in Atlanta today

Friday is undoubtedly the most interesting day of this week when it comes to data releases. Investors will be served the UK services PMI and European inflation readings in the morning. THe labour market reports from the United States and Canada will draw attention in the early afternoon while a few hours later DOE will publish oil inventories data. Last but not least, three Fed Chairmans - Jerome Powell, Janet Yellen and Ben Bernanke - will take part in a joint interview at the annual meeting of the American Economic Association today.

9:30 am GMT - UK, Services PMI for December. The manufacturing gauge released on Wednesday came in reasonably above market expectations while the construction PMI index published yesterday came in more or less in line with forecasts. However, services sector has the biggest share in the UK economy therefore today’s reading should not be neglected. Market consensus suggests that we will see a modest bounce from 50.4 pts to 50.7 pts.

10:00 am GMT - Euro area, CPI inflation for December. The ECB’s net asset purchase programme has been terminated with the end of 2018. However, any more decisive hawkish action, like for example rising interest rates, would require inflation to accelerate. Having said that, the price growth data will be now watched even more closely by the EU investors. Today’s reading is expected to show a slight deceleration from 1.9% YoY to 1.8% YoY when it comes to headline measure while the core gauge should remain unchanged at 1% YoY.

1:30 pm GMT - US, NFP report for December. The NFP report from the United States will conclude the first (although not full) week of 2019. The stakes are high as yesterday’s ADP print suggested that the US economy could have added as much as 271k jobs in the previous month. Apart from that, wage growth data will be closely watched as investors will try to assess whether there are inflationary pressures that could warrant more rate hikes.

1:30 pm GMT - Canada, Labour market report for December. The Canadian labour market report will be released simultaneously to the US counterpart. After solid November when the Canadian economy added 94.1k jobs December is seen to be less favourable. Namely, market consensus hints that only 5.5k jobs could have been added in the last month of 2018. Apart from that, a slight acceleration in wage growth metrics is expected.

4:00 pm GMT - DOE report on oil inventories. The beginning of the new year on the oil market is marked with a decent recovery. Among reasons one can name reports saying that demand for Saudi oil remains robust. The prices were additionally boosted yesterday when API estimates showed bigger drop in oil inventories than expected. However, it is usually DOE data that tends to move prices more than API counterpart. Having said that, oil traders should stay cautious and watch whether yesterday’s estimates will be confirmed today.

Central bank speakers scheduled for today:

• 3:15 pm GMT - Fed’s Powell, Bernanke and Yellen

• 3:15 pm GMT - Fed’s Bostic

• 6:30 pm GMT - Fed’s Barkin

USDCAD rose fiercely in the past few months causing the pair to surpass the short-term resistance zone ranging 1.3330-1.3360. However, after struggling for a while in the vicinity of 1.3660 handle trading was dominated by the bears. USDCAD took a dive yesterday pulling back over 1%. Source: xStation5