USD - Major events in the week ahead

Friday, Dec 04 2015

Events that marked the week:

On Monday Chicago PMI and Pending Home Sales figures were released. The Chicago Business Barometer decreased 7.5 points to 48.7 in November from 56.2 in October, as a sharp fall in New Orders put it back into contraction for the sixth time this year. Smaller decrease to 54.3 was anticipated. The significant decline in the Barometer is indicative of the see-saw pattern of demand seen in 2015, with output and orders shifting in and out of contraction. The November fall also suggests that activity over the final quarter of the year may well decelerate barring a bounceback in December.

The Pending Home Sales Index, inched 0.2% to 107.7 in October from an upwardly revised 107.5 in September and is now 3.9 percent above October 2014 (103.7). Increase by 1.6% was predicted. The index has increased year-over-year for 14 consecutive months.

Tuesday's US session was marked by ISM Manufacturing PMI figures. The November PMI registered 48.6 percent, a decrease of 1.5 percentage points from the October reading of 50.1 percent. Analysts were forecasting increase to 50.6. Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November.

Wednesday brought ADP job figures. Private sector employment increased by 217,000 jobs from October to November according to the November ADP National Employment Report. Smaller increase by 191,000 jobs was expected. "The strongest gains in the service sector since June led to greater employment growth in November,” said Ahu Yildirmaz, VP and head of the ADP Research Institute.

On Thursday Unemployment Claims and Non-Manufacturing PMI figures were released. In the week ending November 28, the advance figure for seasonally adjusted initial claims was 269,000, an increase of 9,000 from the previous week's unrevised level of 260,000. This was in line with market expectations. The 4-week moving average was 269,250, a decrease of 1,750 from the previous week's unrevised average of 271,000.

The Non-Manufacturing PMI registered 55.9 percent in November, 3.2 percentage points lower than the October reading of 59.1 percent. Analysts were anticipating decline to 58.1. This represents continued growth in the non-manufacturing sector at a slower rate. According to the NMI, 12 non-manufacturing industries reported growth in November. After a strong month of growth in October, the non-manufacturing sector’s rate of growth slowed in November. Most respondents are still positive about business conditions.

Friday's session was marked by NFP and Trade Balance figures.The goods and services deficit was $43.9 billion in October, up $1.4 billion from $42.5 billion in September, revised. October exports were $184.1 billion, $2.7 billion less than September exports. October imports were $228.0 billion, $1.3 billion less than September imports.

USD was pushed higher after 211,000 increase in payrolls which followed a 298,000 gain in October that was bigger than previously estimated, a Labor Department report showed Friday. The median forecast called for a 20001,000 advance. The jobless rate held at a more than seven-year low of 5%.Employment in November was spurred by the biggest increase in construction hiring since January 2014. Retailers, health-care providers and leisure and hospitality companies added jobs at a healthy, but slower pace than in October.

This week markets will be looking at:

Building Permits/Housing Starts (Tuesday 14:30)

Unemployment Claims (Thursday 14:30)

Retail Sales (Friday 14:30)

PPI (Friday 14:30)

Prelim UoM Consumer Sentiment (Friday 16:00)

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