In the upcoming week, traders will focus on the jobs report from the US which will provide insights into the state of recovery of the labor market. Other key releases in the week from elsewhere in the world include the Australian and Canadian GDP data, manufacturing and services PMI data from the US, manufacturing PMI from China, and monetary policy decision by the Reserve Bank of Australia. Having said that here is an outlook on a few important releases:
#1: China Manufacturing PMI (02/28/2021 Sunday 01:00 GMT)
In China, the Manufacturing PMI reported by NBS fell to the 51.3 level in January from the 51.9 level in December last year. The reading for the month missed analysts’ expectations of hitting the 51.6 mark. This was by far the weakest growth in manufacturing activity ever since August because of an increase in the local COVID-19 infections before the Lunar New Year holidays. Output increased the least in as many as three months. Further, new orders, export sales, and buying levels rose at the slowest pace ever since August. Additionally, employment shrank at the sharpest pace ever since February. Input prices remained high, while output charges continued to register a strong increase. Business sentiment weakened to a six-month low.
Forecast for February 2021: 51.1
#2: United States ISM Manufacturing PMI (03/01/2021 Monday 15:00 GMT)
In the United States, the Manufacturing PMI reported by the Institute for Supply Management fell to the 58.7 level in January from the highest level of 60.5 reported in December last year. Analysts had expected the index to come in at the 60.0 level. The reading for the month indicated the 8th consecutive month of increase in factory activity, that too at a strong pace. New orders, production, supplier deliveries, inventories, and new export orders slowed down. However, both employment and order backlogs rose faster. Price pressures increased.
Forecast for February 2021: 58.7
#3: Euro Area ECB President Christine Lagarde Speaks (03/01/2021 Monday 16:10 GMT)
Christine Lagarde, President of the European Central Bank, is scheduled to speak at a video conference hosted by the Association for Small and Medium-sized Businesses in Germany. Markets often turn volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#4: Australia RBA Rate Statement (03/02/2021 Tuesday 03:30 GMT)
The Reserve Bank of Australia releases the Rate Statement on the first Tuesday of every month excluding January. The central bank uses the statement as a tool for communicating with investors as regards the monetary policy. In addition to containing the outcome of the members’ decision on setting interest rates, it offers commentary on the economic conditions that impacted their decisions. More importantly, it discusses the nation’s economic outlook and provides clues on future decisions.
#5: Australia Cash Rate (03/02/2021 Tuesday 03:30 GMT)
In the meeting held in February, the Reserve Bank of Australia decided to leave the cash rate unchanged at the record low level of 0.1 percent as analysts expected. Policymakers said that the bond-buying program would be extended by another A$100 billion. Further, they pledged that the rates would be on hold until 2024. Additionally, the central bank noted that the important near-term problems are how businesses and households adjust to the cutting of a few of the COVID-19 support measures and the extent to which they can use their balance sheets to support spending. Australia’s GDP is expected to grow 3.5 percent over 2021 and 2022. Meanwhile, the unemployment rate is anticipated to fall, with the jobless rate coming in at 6.0 percent in 2021 and 5.5 percent in 2022.
Forecast for March 2021: 0.10 percent
#6: Canada GDP (03/02/2021 Tuesday 13:30 GMT)
Canada’s GDP grew 0.7 percent on a month-on-month basis in November last year, following the 0.4 percent expansion in the prior month. Analysts had expected the nation to register 0.4 percent growth. With this, the economy has recorded seven consecutive months of expansion after the biggest contraction ever in March and April. Both goods-producing and services-producing industries registered growth as 14 out of 20 industrial sectors recorded gains in November 2020. The preliminary estimate for December 2020 is 0.3 percent expansion in real terms, indicating a growth of approximately 1.9 percent in the fourth quarter of last year and a contraction of approximately 5.1 percent for last year.
Forecast for December 2021: 0.1 percent
#7: Australia GDP (03/03/2021 Wednesday 00:30 GMT)
Australia’s economy grew 3.3 percent on a quarter-on-quarter basis in the September quarter of last year, recovering partially from the record 7.0 percent contraction in the previous period. The reading for the September quarter of last year beat analysts’ expectations for a 2.6 percent expansion. This was by far the sharpest growth period ever since the first quarter of 1976. Economic activity resumed after the social distancing measures, as well as trading restrictions, were eased in most states and territories. Further, household consumption increased due to a rise in spending on h goods and services. Government consumption increased for the ninth consecutive period, driven by the increase in social benefits extended to households. Private investment declined on weaker business investment. The contribution to GDP from the net external demand was negative amid a drop in exports.
Forecast for the final quarter of 2020: 2.1 percent
#8: United States ADP Non-Farm Employment Change (03/03/2021 Wednesday 13:15 GMT)
In the United States, private businesses hired 174,000 workers in January, recovering from the downwardly revised 78,000 declines in hiring in the prior month. The service-providing sector hired 156,000 workers led by health and education, professional and business services, leisure and hospitality sectors, trade, transportation, and utility segments, financial services, and other services. The information sector shed jobs. The goods-producing sector added 19,000 jobs because of the increased hiring in the construction and manufacturing sectors. Natural resources and mining sectors neither fired nor hired people. Private mid-sized companies hired 84,000 workers, while small firms hired 51,000 workers and large companies generated 39,000 jobs.
Forecast for February 2021: 170,000
#9: United States ISM Services PMI (03/03/2021 Wednesday 15:00 GMT)
In the United States, the Services PMI reported by the Institute of Supply Management rose to 58.7 level in January from the 57.7 level in December last year. The reading for the month beat analysts’ expectations of the index hitting the 56.8 level. The reading, however, pointed towards the strongest expansion in activity in the services sector ever since February 2019. New orders rose faster and employment rebounded. Production and supplier deliveries slowed, while new export orders and inventories returned to contraction. Price pressure remained elevated.
Forecast for February 2021: 58.7
#10: United States Crude Oil Inventories (03/03/2021 Wednesday 15:30 GMT)
In the United States, crude oil stocks increased by 1.285 million barrels during the week that ended on February 19, ending a streak of declines for four weeks. Analysts had expected crude oil stocks to drop by 5.19 million barrels. Meanwhile, gasoline stocks rose by 0.012 million barrels against analysts’ expectations for a fall of 3.062 million barrels.
#11: New Zealand RBNZ Governor Adrian Orr Speaks (03/03/2021 Wednesday 20:15 GMT)
Adrian Orr, Governor of the Reserve Bank of New Zealand, is scheduled to speak at an economic forum hosted by Waikato University about the future of monetary policy. Markets often turn volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#12: OPEC-JMMC Meetings (03/04/2021 Thursday)
In the last (13th) OPEC-JMMC meetings held via videoconference, it was reiterated that there is a need to closely monitor the market fundamentals, overall market stability, and the non-DoC supply as well as its impact on oil balance globally. The meeting also noted that it is high conformity levels that have contributed significantly to market stability and rebalancing.
#13: United States Fed Chair Jerome Powell Speaks (03/04/2021 Thursday 17:05 GMT)
Jerome Powell, Federal Reserve Chair, is scheduled to speak on the US economy at a video conference hosted by the Wall Street Journal. Questions from the audience are expected. Markets often turn volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#14: United States Average Hourly Earnings (03/05/2021 Friday 13:30 GMT)
In the United States, the average hourly earnings for all the employees listed on private nonfarm payrolls increased 0.2 percent in January after the reading for the prior month was revised upward revised to a gain of 1.0 percent. The reading for the month came in below analysts’ expectations for a 0.3 percent increase. The average hourly earnings of production and nonsupervisory employees in the private-sector remained little changed. On a year-on-year basis, the average hourly earnings have increased 5.4 percent, the same rate as in the previous month but above analysts’ expectations for a 5.1 percent gain.
Forecast for February 2021: 0.2 percent
#15: United States Non-Farm Employment Change (03/05/2021 Friday 13:30 GMT)
The US hired 49,000 workers in January, following December’s shuddering halt. Analysts had expected that the economy would add 50,000 jobs in January. The restrictions imposed on businesses to contain the spread of Covid-19 were eased a little because of a reduction in the number of new infections as well as hospitalizations. The vaccination rate has also increased. Professional and business services and public and private education sectors hired more workers. However, the gains in these sectors were offset by losses in retail trade, leisure and hospitality, health care, and transportation and warehousing sectors.
Forecast for February 2021: 133,000
#16: United States Unemployment Rate (03/05/2021 Friday 13:30 GMT)
In the United States, the unemployment rate declined to the 6.3 percent level in January from the 6.7 percent level in the prior month. The reading for the month also came in below analysts’ expectations of 6.7 percent. The number of jobless people in the US dropped to 10.1 million. Although the jobless rate and the number of unemployed people were lower compared to the high levels hit in April last year, they continued to remain well above the pre-pandemic levels in February 2020 of 3.5 percent and 5.7 million, respectively.
Forecast for February 2021: 6.4 percent