Forex Weekly Outlook January 2-6

US Manufacturing PMI, Crude Oil Inventories, FOMC Meeting Minutes, Non-Manufacturing PMI, and important employment figures from Canada and the US including the monthly job report. These are the main events on forex calendar. Join us as we explore the first week of 2017.

Let’s start,

1.  US ISM Manufacturing PMI: Tuesday, 15:00. U.S. manufacturing activity expanded in November to 53.2, from 51.9 in October, showing the economy is gaining momentum. Economists expected a more moderate rise to 52.1.  Production picked up as well as new orders, indicating factories will have to speed up production in the coming months to meet higher demand. The current revival in manufacturing activity is consistent with the economy growing at a roughly 3.2% annual pace. Economists expect growth to accelerate further under President- Donald Trump,  who promised a big infrastructure-spending bill, deregulation, and revamping trade deals to boost the economy. Manufacturing activity is expected to strengthen further to 53.7 in December.
2. US Crude Oil Inventories: Wednesday, 15:30. U.S. crude stocks increased unexpectedly for the second consecutive week, gaining 614,000 barrels in the week ended December 23, missing analysts’ estimates for a contraction of 1.3 million barrels. Traded volumes were weak for the year-end holidays however, the market is in good shape this year, expected to continue the uptrend in early January.
3. US FOMC Meeting Minutes: Wednesday, 19:00. The Federal Reserve  meeting held in November showed the economy has strengthened sufficiently to warrant interest rate increases in the next policy meeting in December. The voting members saw equal risks the economy would meet their forecasts for continued growth and a tightening labor market. Some argued a hike should come at the Fed’s December meeting in order to preserve the central bank’s “credibility.” Fed Chair  Janet Yellen  noted that Trump’s election did nothing to change the Fed’s plans for a rate increase “relatively soon.”
4. US ADP Non-Farm Employment Change: Thursday, 13:15. The  ADP Employment Report  showed that nonfarm payroll employment increased 216,000 during November following an 119,000 increase in October rise, revised from 147,000. This was the biggest gain since June. Payrolls rose an average 176,000 per month in 2016, down from 209,000 averaged during 2015 and 237,000 averaged in 2014. ADP non-farm payrolls is expected to reach 171,000 this time.
5. US Unemployment Claims: Thursday, 13:30. US jobless claims declined for a third week out of the last four, down by 10,000, reaching 265,000. Claims remained below the 300,000  line for 95 straight weeks-the longest period since 1970 indicating a strong labor market. Analysts expected a higher figure of 277,000 new claims. The four-week average of claims declined to 263,000 from 263,750 the prior week. The number of new claims is forecasted to reach 262,000 this week.
6. US ISM Non-Manufacturing PMI: Thursday, 15:00. U.S. services sector activity hit a one-year high in November, rising to 57.2 from 54.8 in October. Services industries reported a 4 percentage point surge in production with employment soaring 5.1% to a 13-month high. The services sector strong performance data suggested stronger consumer spending suggesting the economy maintained its momentum in the July-September quarter enabling the Fed to make the rate hike decision at their December meeting. US Service sector is expected to remain in expansion with 56.6 points in December.
7. Canadian employment data: Friday, 13:30. Canada’s jobless rate dropped to 6.8% in November as the economy created 10,700  jobs. The employment market boosted its job growth in the last   three months, helping to lower the unemployment rate. However the work participation rate declined as fewer people searched for work.   The  number of   part time workers increased by  214,000 compared to a year earlier, while full-time work declined by 30,000 jobs. Canadian job market is expected to shed 5,100 jobs in December while the unemployment rate is anticipated to rise to .6.9%
8. US Non-Farm Employment Change and Unemployment Rate: Friday, 13:30. US employment market registered another strong job gain in November, reducing the unemployment rate to a nine-year low of 4.6%. The US economy created 178,000 backing the Fed’s decision to raise rates on its December meeting. Economists had expected a gob growth of 177,000 with unemployment unchanged at 4.9%. However, the decline in the unemployment rate was not related exclusively to the rise in employment but also because the labor force contracted to 62.7%. Wage growth registered a 0.1% drop but analysts partially blamed the drop in average hourly earnings on a miscalculation relating to the calendar. Some analysts believe Trump’s plan to increase infrastructure spending and cut taxes could boost hiring and spur faster economic growth over the coming years. December’s job gain is estimated at 175,000 and the unemployment rate is forecasted to rise to 4.7%.

That’s it for the major events this week. Stay tuned for coverage on specific currencies

*All times are GMT.

Further reading:

• For EUR/USD, check out the  Euro to Dollar forecast.
• For the Japanese yen, read the  USD/JPY forecast.
• For GBP/USD (cable), look into the  British Pound forecast.
• For the Australian dollar (Aussie), check out the  AUD to USD forecast.
• For USD/CAD (loonie), check out the  Canadian dollar
• For the Swiss Franc, see the  USD/CHF forecast.