Weekly Outlook, Jan. 3–Jan. 7, 2022: Top Economic Events to Watch This Week

Last week, the broad-based US dollar ended on a bullish track, amid the risk-off market sentiment, which tends to underpin the safe-haven greenback. The COVID-19-related headlines were pressuring the market trading sentiment, and, in the opinion of investors, as the number of COVID-19 cases globally continues to rise, COVID-19 will be an essential determinant. According to figures from Johns Hopkins University, the number of infections had surpassed 286 million as of December 31.

Furthermore, the reason for the upward bias in the US dollar could also be tied to the previously released US data. According to figures published on Thursday, initial unemployment claims in the United States declined to 198,000 last week, with the labor market appearing unaffected by the spread of the omicron strain of COVID-19. According to the statistics, at 63.1, the Chicago PMI for December was also higher-than-expected.

On Monday, January 3, at 08:45 GMT, the Italian Markit Manufacturing PMI will be released. The Manufacturing Purchasing Managers Index (PMI), from Markit Economics, measures business conditions in the manufacturing sector.

The manufacturing PMI is an important indicator of business conditions and the general economic situation in Italy, because the manufacturing sector accounts for a considerable portion of the total GDP. For example, a result above 50 indicates that the Euro is bullish, while a result below 50 indicates that it is bearish. The next Italian Markit Manufacturing PMI is expected to come in at 61.5, with the latest deviation being 1.95209.

Previous Release
ACTUAL: 62.8
DEV: 1.95
CONS: 61.1
Last Released: Wednesday, December 1, 2021, at 08:45

The ISM Manufacturing PMI for the United States will be released at 15:00 GMT on Tuesday, January 4. The Manufacturing Index compiled by the Institute for Supply Management (ISM) reflects the condition of the manufacturing industry in the United States. It is an essential measure of the overall economic situation in the USA. Results in excess of 50 indicate that business activity increased during the survey period, and vise versa. PMIs are seen as leading indicators, since they can indicate a change in the economic cycle. For example, figures somewhat over 50 are considered favorable (or bullish) for the USD, while a result of less than 50 is deemed negative (or bearish).

Previous Release
ACTUAL: 61.1
DEV: 0.09
CONS: 61
Last Released: Wednesday, December 1, 2021, at 15:00

The Federal Open Market Committee (FOMC) meets eight times a year to analyze economic and financial conditions, decide the appropriate monetary policy stance and assess the threats to the FOMC’s long-term goals of price stability and sustainable economic growth. The Board of Governors of the Federal Reserve publishes the minutes of the FOMC meeting; they give a strong indication of the future US interest rate policy.

The minutes of the Federal Open Market Committee (FOMC) meeting are usually released three weeks after the policy decision. Investors search for hints about the policy prospects in this publication, using information such as the vote split. This report tends to influence the volatility of the USD and determine short-term bullish or bearish trends. A hawkish outlook is positive and bullish for the USD currency, and conversely, if the view is dovish, it is negative and bearish for the USD currency.

The ISM Services PMI for the United States will be released at 15:00 GMT on Thursday, January 6. The Non-Manufacturing Index of the Institute for Supply Management (ISM) measures business conditions in the non-manufacturing sector in the United States.

It is worth noting that the non-manufacturing sector has far less impact on the GDP than the ISM manufacturing sector has. A result of more than 50 is considered favorable (or bullish) for the USD. The next ISM Services PMI in the United States is expected to be 67, with a previous deviation of 1.43339.

Previous Release
ACTUAL: 69.1
DEV: 1.43
CONS: 65
Last Released: Friday, December 3, 2021, at 15:00

Statistics Canada usually publishes this information, which provides an estimate of the number of unemployed individuals, divided by the total civilian labor force. It is one of the most critical indicators for the Canadian economy, since the number of jobless people is a good indicator of overall economic health, because consumer spending is closely linked to labor market conditions. If the unemployment rate rises, it is an indication that the Canadian labor market is contracting. Therefore, if the unemployment rate rises, it shows that the Canadian economy is weakening. So, a lower figure is considered bullish for the CAD, whereas a surge is deemed negative or bearish.

Previous Release
ACTUAL: 6 %
DEV: -4.42
CONS: 6.6 %
Last Released: Friday, December 3, 2021 13:30

ii – Employment Change: Statistics Canada, which tracks changes in the number of employed individuals in Canada, usually releases this information. In simpler terms, an increase in this indicator boosts consumer spending, which in turn supports economic growth. As a result, high figures are considered bullish for the CAD, while low figures are deemed negative (or bearish).

Previous Release
Actual: 153.7K
DEV: 2.06
CONS: 35K
Last Released: Friday, December 3, 2021, 13:30