Markets await US employment data
Sterling continued to tread water yesterday against the euro whilst easing slightly against the dollar. It looks set to continue doing so ahead of this afternoon’s slew of data from the US. With new Covid infections in the UK breaching the 50,000 level for the first time since July this year, investors are becoming suspect that the Bank of England will raise rates at their next meeting in two weeks.
The only data scheduled for release today is the Markit Services Purchasing Managers Index at 10.30 GMT.
The euro continued trading in a narrow range and is likely to play wait and see ahead of this afternoon’s US employment data. Yesterday the markets got more proof if it was needed, of inflationary pressures in the Eurozone when Eurostat published October’s Producer Price Index, which jumped by 5.5% over the month.
The rise was greater than forecast and makes this morning’s speech from European Central Bank President Christine Lagarde more interesting than it may have otherwise been. Also on the data docket today are European Markit’s Services and Composite Purchasing Manager’s Indexes and Retail Sales.
The dollar is enjoying a much-needed pause for breath as volatility eases ahead of this afternoon’s key data. Speakers from the Federal Reserve continue to raise concerns over the level of inflation, with Loretta Mester warning that if Omicron is a “bad variant it could exacerbate the upward price pressures”.
Yesterday’s weekly jobs data was broadly as forecast, and today all eyes will be on the monthly NonFarm payroll report with estimates looking for 500,000 new jobs created. After the jobs data has been digested, ISM and Markit will release their Services Purchasing Managers Indexes.