The inaugural week of 2024 is poised to be a dynamic period for traders and investors, with a spotlight on critical economic indicators that are expected to shape market sentiments. Among the pivotal data releases are the ISM Manufacturing and Services PMI from the US, the German Preliminary CPI from the EU, and the highly anticipated US and Canada Employment Change figures. This overview aims to guide you through the key developments and predictions, with a specific emphasis on the potential impact on major currencies, particularly the US Dollar.
It’s crucial for traders to be cautious and stay on top of the latest developments for a successful week of trading.
The ISM Manufacturing PMI, holding steady at 46.7 in November 2023, is expected to modestly increase to 47.1 in the upcoming release on 3 January 2024.
The Federal Reserve maintained the fed funds rate at 5.25%-5.5% for a third consecutive meeting in December 2023. However, they have hinted at a potential 75 basis points cut in 2024. Therefore the meeting minutes on 4 January 2024 will provide insights into the Fed’s latest monetary policy stance, reflecting the current economic indicators, including slowed growth, moderated job gains, and persistent but slightly eased inflation.
After a 0.4% decline in November 2023, Germany’s Preliminary CPI, anticipated on 4 January 2024, is expected to rebound with a projected increase of 0.2%.
Following positive employment numbers in October and November of 2023, Canada is poised to release its December 2023 employment data on 5 January 2024. Forecasts suggest an increase of 12K jobs, but with a marginal uptick in the unemployment rate to 5.9%.
November 2023 saw a robust addition of 199k jobs in the US, surpassing October figures. The upcoming release on 5 January 2024 is anticipated to reveal a positive trend with an estimated increase of 163,000 jobs, while the unemployment rate is expected to inch up to 3.8%.
Closing the week, the US ISM Services PMI, reflecting growth in the services sector, is projected to experience a marginal decline from 52.7 to 52.6 in the December figures, set for release on 5 January 2024.
As traders embark on the first week of 2024, vigilance and adaptability will be key. Stay informed, monitor the latest developments, and be prepared for potential market shifts in response to these critical economic indicators.
