Key Events This Week: Payrolls, ISM And FOMC Minutes

As we look forward to the first full week of 2025, DB’s Jim Reid writes that a key question for the Fed’s outlook will be how strong the US jobs report for December is, which is out this Friday. In terms of what to expect, DB’s economists are looking for nonfarm payrolls to grow by +150k in December. That would be beneath the +227k print in November, but that gain was boosted by a bounce back from previous weather disruption and the end of strikes. Indeed, a +150k print would basically be in line with the 6-month average, which is currently running at +143k. Economists also see the unemployment rate ticking up a tenth to 4.3%.

Turning to Europe, the main focus this week will be the Euro Area flash CPI print for December, which is out tomorrow. This is an important one, as it comes amidst growing concern about European inflation, particularly with the recent rise in natural gas prices, along with the recent depreciation of the euro. On top of that, the December flash print from Spain last week was stronger than expected, so the backdrop hasn’t been too favorable, and both headline and core inflation for the Euro Area are widely expected to remain above the ECB’s 2% target. We’ve seen that have an impact in markets too, and last week saw the 10yr bund yield move higher for a 5th consecutive week.

Elsewhere in Europe, another thing to look out for will be the ongoing political situation in France and efforts to put together a new budget. That comes as last week saw the Franco-German 10yr spread widen by +4.8bps to 86.3bps, which is the widest it’s been since early December, back when the National Rally confirmed they would vote against Michel Barnier’s government. That underperformance was evident among other French assets last week, with the CAC 40 down -0.99%, in contrast to the +0.20% gain for the Europe-wide STOXX 600.

Staying on politics, Canada Prime Minister Justin Trudeau is expected to resign as Liberal Party leader this week. Canada has to hold a federal election by October at the latest, and Trudeau’s Liberals are polling well behind the opposition Conservatives, with CBC’s poll tracker currently putting the Conservatives on 44%, and the Liberals on 21%. Trudeau has already faced calls from some Liberal MPs to resign, and his position came under further pressure last month after finance minister and Deputy PM Chrystia Freeland resigned from the cabinet.

Also as a reminder, US stock markets will be closed on Thursday for the funeral of former President Jimmy Carter, whilst bond markets will close early that day.

Courtesy of DB, here is a day-by-day calendar of events

Monday January 6

• Data: US November factory orders, China December Caixin services PMI, UK December official reserves changes, new car registrations, Japan December monetary base, Germany December CPI, Italy December services PMI, Canada December services PMI
• Central banks: Fed’s Cook speaks
• Auctions: US 3-yr Notes ($58bn)

Tuesday January 7

• Data: US November JOLTS report, trade balance, December ISM services, China December foreign reserves, UK December construction PMI, France December CPI, Italy December CPI, November unemployment rate, Eurozone December CPI, November unemployment rate, Canada November international merchandise trade, Switzerland December CPI
• Central banks: Fed’s Barkin speaks, ECB’s consumer expectations survey
• Auctions: US 10-yr Notes (reopening, $39bn)

Wednesday January 8

• Data: US December ADP report, November consumer credit, Japan December consumer confidence index, November labor cash earnings, Germany November retail sales, factory orders, France December consumer confidence, November trade balance, current account balance, Eurozone December services, industrial and economic confidence, November PPI, Australia November CPI, Sweden December CPI
• Central banks: FOMC minutes, Fed’s Waller speaks, ECB’s Villeroy speaks
• Earnings: Samsung, Albertsons
• Auctions: US 30-yr Bond (reopening, $22bn)

Thursday January 9

• Data: US November wholesale trade sales, initial jobless claims, China December CPI, PPI, Japan November household spending, Germany November industrial production, trade balance, Eurozone November retail sales
• Central banks: Fed’s Harker, Barkin, Schmid and Bowman speak, BoE’s Breeden speaks, ECB’s economic bulletin, BoE’s DMP survey
• Earnings: Seven & i

Friday January 10

• Data: US December jobs report, January University of Michigan survey, Japan November leading index, coincident index, Germany November current account balance, France November consumer spending, industrial production, Italy November retail sales, Canada December jobs report, November building permits, Denmark and Norway December CPI, Sweden November GDP indicator
• Earnings: Constellation Brands, Walgreens Boots Alliance

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the ISM services index on Tuesday and the employment report on Friday. The minutes from the December FOMC meeting will be released on Wednesday. There are several speaking engagements from Fed officials this week.

Source: BofA, Goldman