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US Jobs Report, EU Inflation and New Covid Variant “Omicron”: Week Ahead

US Jobs Report, EU Inflation and New Covid Variant “Omicron”: Week Ahead

A busy economic calendar is waiting for the market players.

The World Health Organization (WHO) has declared a new coronavirus variant to be “of concern” and named it Omicron.It had a large number of mutations, and early evidence suggested an increased reinfection risk, the WHO said.

It was first reported to the WHO from South Africa on 24 November, and has also been identified in Botswana, Belgium, Hong Kong and Israel.

A number of countries around the world have now decided to ban or restrict travel to and from southern Africa. The U.K. ruled out tightening pandemic rules but was quick to halt flights from six countries once news of the variant — B.1.1.529 — emerged. The European Union proposed the same measure as several of its member states went ahead and restricted travel.

Concerns brought hard sales to Indices and Commodities.

What’s next this week:

The fastest inflation in the history of euro is due in Tuesday data
Chinese PMI, Japanese production reports are also due

U.S. employers probably added more than half a million workers for a second straight month in November, pushing the labor market closer to a full recovery despite swirling inflation worries and persistent Covid-19 infections.

Payrolls are expected to rise by 550,000 and the unemployment rate to edge down to 4.5%, according to the median estimates of economists ahead of Labor Department data due Friday in Washington.

A strong jobs report, coupled with another monthly jump in consumer prices in Labor Department data out Dec. 10, could seal a decision at the Federal Reserve’s mid-December meeting to accelerate the tapering of bond purchases. But a new pandemic wave might still scupper that, a fear that caused market jitters on Friday.

Fed Chair Jerome Powell, fresh from being picked for a second term by President Joe Biden, is likely to face questions Tuesday about tapering, interest rates and inflation when he appears before the Senate Banking Committee for a regular hearing on the Cares Act, the March 2020 pandemic aid package. Treasury Secretary Janet Yellen will testify alongside Powell, and the House Financial Services Committee has a similar panel scheduled for Wednesday.

The Fed’s Beige Book survey, out Wednesday, will also shed light on the economic situation across the country. Other key U.S. data during the week include pending home sales, consumer confidence, and Institute for Supply Management indexes of manufacturing and services.

Asia
China’s official PMI reports on Tuesday will give the latest pulse check on the world’s second-largest economy, with economists’ forecasts anticipating an improvement for manufacturers as power shortages abated.

Japan gets a raft of data on production, unemployment and retail sales that will show how the economy was faring at the beginning of this quarter, days after Prime Minister Fumio Kishida launched a record fiscal stimulus package. Capital spending figures will indicate how business sentiment has been holding up.

Europe

Any acceleration in euro-area consumer-price data on Tuesday will mean the region’s enduring the fastest inflation since the creation of the single currency. That will heap further scrutiny on the European Central Bank, whose officials insist the surge is largely transitory as they approach a crucial decision on the future of stimulus.

In Germany, the region’s biggest economy, the cost-of-living squeeze is even more intense. The median prediction of economists is for an inflation rate of 5.5% in November, though the Bundesbank reckons the outcome may be closer to 6%.

Inflation numbers from elsewhere in Europe will also show significant jumps. Spain’s rate due on Monday is seen at 5.6%, according to the median estimate. Poland’s may be even higher at 7.3%.

Price Pressures
Inflation numbers are set to show the fastest rate in the euro’s history

Sources:

Bloomberg.com

BBC.com

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