The New Year begins with NFP!
Hello and Happy New Year! We wish you the best and a great year ahead. While the first week of every year starts with slowly coming back to the markets by big players and they will start their trades step by step, the Omicron variant and its possible combination with the delta variant is the main concern at the moment. The week ahead mostly will be about US employment data and OPEC+ meetings. Let's see the most important events and data in the first week of 2022, with the IFC Markets update at the end.
OPEC+ Meeting - Tuesday
While Monday most of the markets will be closed, eyes will be on OPEC and its allies' meeting, known as the OPEC+ meeting on Tuesday. Ministers meeting of OPEC and None OPEC (ONOMM) will be about deciding whether they will add another 400k bpd of production to global supply or will hold the current plan. The consensus expectation is that alliance will probably stick to the current plan of adding 400,000 bpd each month and not increasing it. Even though if Omicron has cast a shadow over the demand outlook heading into 2022. However, many countries are still suffering the energy crunch. Therefore the demand is higher than supply, and the overall outlook for the Oil price is positive.
PMI numbers- across the week
One of the most important data in the economy is the Purchasing Managers Index number. PMI number in different sectors tells us what we have to expect from different economies and sectors. In the first week, we have to follow the PMI numbers from all major economies including the US, China, Japan, UK, Eurozone, Germany, and some other European countries. In the US, the ISM index is expected to dip to 60.5 from 61.1 in November, while for the Eurozone & Germany, we are expecting that Composite PMIs for December to stay unchanged at 53.4 and 50 respectively.
Eurozone inflation and Retail Sales - Across the week.
In the week ahead, we will have plenty of data from European countries and generally from the Eurozone. Turkish inflation numbers on Monday, Swiss and France numbers on Tuesday, Italian numbers on Wednesday, Germany's inflation numbers on Thursday, and Eurozone numbers on Friday, will make it clearer for us that what we have to expect from the next ECB meeting. Eurozone inflation jumped to 4.9% y/y in November and is expected to decrease to 4.7% in December. Eurozone Retail Sales numbers on Friday are also, expected to contract to -0.5% m/m in November. Therefore European Central Bank will keep its current policies with no change in the short term in its interest rates. These estimate means more pressure on Euro in the mid-term outlook.
NFP and FOMC minutes - Wednesday & Friday
On Wednesday, The FOMC minutes of the December meeting will release and should provide a clearer idea of the FED 2022 economic outlook and its policies. On the other hand, US employment data including JOLTS job openings for November on Tuesday, ADP numbers on Wednesday, and None-Farm payrolls on Friday is the event of the week. After November’s missing surprise and increasing Covid-19 cases in recent weeks, analysts are forecasting an increase of 400k jobs in December, which causes the unemployment rate lower to 4.1%. Average hourly earnings are also expected to decrease to 4.1% year-on-year, from 4.8%. Overall weekly data is still expected to support the US stock markets.
