US NONFARM PAYROLLS TAKE CENTRE STAGE
US economic data will be in the spotlight on Friday, as investors assess the latest nonfarm payrolls report. The data series is arguably the most closely watched calendar release of the month and has been known to induce heavy volatility in the market.
Action begins at 07:00 GMT with a monthly report on Germany’s trade balance. Europe’s largest economy is expected to show a surplus of €21.8 billion in October, unchanged from the previous. Exports are expected to grow 1% on month, slightly outpaced by a 1.1% increase in imports.
The United Kingdom’s statistical agency will report on industrial production, manufacturing production and trade at 09:00 GMT. The reports could stoke heavy volatility in the British pound.
The official nonfarm payrolls report is due for release at 13:30 GMT, and is expected to show the creation of 200,000 jobs for the month of November. That follows a gain of 261,000 in October.
The unemployment rate is forecast to hold steady at 4.1%. Average hourly earnings – a proxy for inflation – is expected to come in at 0.3% month-on-month. That followed a disappointing flat reading the previous month.
Earlier this week, the ADP Research Institute said private sector payrolls rose by 190,000 in November, which was slightly higher than expected.
Later in the session, the University of Michigan will unveil its latest consumer sentiment index for the month of December. The monthly gauge is expected to rise half a point to 99.0.
North of the border, the Canadian government will report on housing starts and capacity utilization on Friday.
Earlier in the day, China released its latest trade figures for the month of November. Beijing’s trade surplus expanded unexpectedly to $40.21 billion from $38.19 billion the previous month. Exports rose 12.3% year-on-year, while imports added 17.7%.
In yuan terms, China’s surplus amounted to 263.6 billion, up from 254.5 billion the previous month.
The euro resumed its gradual descent on Friday, falling back toward the mid-1.17 US region. The EUR/USD exchange rate was last down 0.1% at 1.1762 following a series of declines. The current zone of support is located at 1.1657 after prices fell through the initial support level of 1.1777.
The Canadian dollar has been backpedaling since Wednesday when the Bank of Canada kept monetary policy on hold. The USD/CAD was last seen trading at 1.2856 on Friday, little changed from the previous close. The North American cross could face strong price activity following the NFP report.
Momentum for the USD/JPY is gradually building as the pair returned above 113.00. At press time, the USD/JPY was up 0.2% at 113.36, its highest in three weeks. The pair remains firmly anchored near the 6 December swing low of 111.99.