22 Dec 2016

The Fortnight Ahead: Monday 26 December 2016

Philip Shaw

Chief Economist

This ‘weekly’ covers the fortnight ahead over the Christmas and New Year period, with most of the top-tier economic releases clustered in the days after the New Year.

One of the more eye-catching events of the fortnight is likely to be the US jobs report on Friday 6 January. With the Federal Reserve’s December hike seen re-starting the normalisation process, the upcoming December jobs numbers will be watched for evidence of anything that sets alarm bells ringing at the Fed on the tightness of the labour market, pushing the Fed into its next policy move sooner rather than later. We look for a non-farm payroll gain of around 180k and expect the unemployment rate to hold steady at 4.6%. Other key US releases over the fortnight will include the ISM for the manufacturing and non-manufacturing sectors, Conference Board consumer confidence and November’s trade balance. Note that US markets will be closed on 26 December and 2 January.

In the UK, there will be closures on 26 and 27 December and 2 January too. And the London Stock Exchange begins its markets closing process from 12:30pm on 30 December. Over the fortnight the main economic releases will take the shape of the December PMIs for the services, manufacturing and construction sectors, whilst the latest mortgage approval and net mortgage lending numbers from the Bank of England are set for release.

In the Eurozone, it appears that Monte dei Paschi di Siena is headed for a state bailout over the Christmas period after its capital raise failed to raise the required funds. The Italian government approved a potential €20bn rescue package earlier this week in preparation for the rescue, providing potential funds for other under pressure Italian lenders too. In terms of the economic releases likely to garner market focus, we flag the ‘flash’ December inflation figures due 4 January and the final Eurozone PMIs for December in the second week of the period. Note that Eurozone exchanges will be closed on 26 December and 2 January.

Further afield, Chinese releases continue on as normal with the Chinese PMIs for the manufacturing and services sectors due. From Japan, the first week will see the publication of the latest Japanese inflation, industrial production and unemployment numbers whilst later in the period the manufacturing PMI is also set for release.

Finally, and most importantly, the London Economics Team wishes its readers a very Merry Christmas and a happy and prosperous 2017! For those wishing to hear our thoughts on next year, don’t forget to check out our year-ahead note: '2017 - The Birth of Reflation?'.  

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The Fortnight Ahead: Monday 26 December 2016