Markit

The Week's Key Economic And Financial Events

In this holiday-shortened week, attention will be on the US FOMC minutes, housing data and consumer confidence. There will be GDP, PMI and inflation releases across the Euro Area as well as the latest Greek Eurogroup meeting. Look for GDP and public finances data in the UK.

Political Turmoil Returns To Europe: French-German Spread Blows Out To Five Year Wides

Despite a calm start to European trading, with local equity bourses posting solid early gains, European political fears have returned this morning, resultin in a blow out in French government bond yields, pushing the 10y yield now higher by 5bps and 5y up 8bps, as early losses extend after latest poll shows support for anti-euro presidential candidate Marine Le Pen rising in both election rounds.

US Services Industry Stabilizes: Firms Warn "Margins Squeeze Acting As A Brake On Employment"

Business activity in the US Services industry accelerated to its fastest since Nov 2015, according to the 'soft' survey data from Markit, but some firms noted that squeezed margins had acted as a brake on employment growth at their business units in January. ISM Services slipped lower with unadjusted new orders tumbling to their lowest since Jan 2016.

US Futures Rise Ahead Of Payrolls Following A Surprise-Filled Asian Session

European stocks and S&P futures rose modestly ahead of January US payrolls data, along with the dollar, while Asian shares dropped after China returned from a week-long holiday. Bonds slid, oil rose while the JGB intervened in the bond market to prevent a bond rout, in one of two major surprises during the Asian session.

Key Events In The Coming "Big Week" For The US

Markets will again zero in on the U.S. this week, and not just because of Donald Trump. The Federal Reserve meeting and nonfarm payrolls may set a clear direction for dollar and yields for the next few months. Other key releases include ISM, ADP, housing data, personal income & spending, vehicle sales and core PCE.

US Services PMI Rebounds To 14-Month Highs As 'Hope' Soars

Following yesterday's jump in US manufacturing PMI, Market reports the January flash Services PMI also spiked (after dropping for 2 months) to match manufacturing at 55.1 (notably above the 54.4 expectations). This is the highest Services print since Nov 2015. Hope remains the biggest driver of this 'soft' survey data with growth expectations for the next 12 months were the greatest since May 2015.

US Manufacturing PMI Near 3-Year Highs As Input Costs Soar Most In 28 Months

Despite lackluster 'hard' data (IP only helped by cold-weather-juiced Utility surge), 'soft' survey data post-Trump continues to shine as US Manufacturing PMI soared in December to 55.1 - the highest since March 2015 (and notably better than preliminary values and expectations). Despite the steepest increase in new orders in 28 months, export orders were stagnant and employment slipped.

US Futures, Oil Flat As Greenback Rises Despite Mnuchin's "Strong Dollar" Warning

US equity futures were flat, European stocks rose and Asia was mixed after the dollar posted a modest rebound overnight despite Mnuchin's "strong dollar" comments, while oil was flat and gold fell, as investors focused on President Donald Trump’s plans to boost growth. The pound fell after a U.K. court ruled that Parliament must vote on triggering Brexit.

Key Events In The Coming Week: All Eyes On Trump's First Actions

The key economic releases this week are durable goods and GDP on Friday. On the political front, the focus will be is on the first actions of the Trump administration including moves on TPP and NAFTA. There are no scheduled Fed speeches this week.

S&P Futures, Dollar Rise As World Awaits Trump Inauguration Speech

"All eyes will be on the content and style of Trump's inauguration speech," Morgan Stanley's Hans Redeker wrote in a note.  "The more 'Presidential' this speech comes across, the better the outcome for markets." And as BonY added, "If Trump ramps up the rhetoric the market will be concerned about building long dollar positions."