All eyes on Friday will be directed across the Atlantic at the final US jobs report for 2016, with the data always key for a view on when US interest rates will next rise.
After a run of strong data, the Federal Reserve raised rates for the only the second time in almost a decade last month and indicated that it expected to increase US borrowing costs by a further three times over the current year.
Minutes from that Fed policy meeting, released yesterday, however, showed that rates could rise more quickly if US president-elect Donald Trump’s economic plans result in somewhat faster economic growth.
After US jobs growth of 178,000 in November, which was below the 12-month average of 188,000, market expectations are for the increase in non-farm payrolls to have come in at around 160,000 for last month.
However, economists at ING Research believe that the data could undershoot.
In a recent note, they said: “The last two Decembers were the hottest on record, lifting NFP above 250k in both. 2016 was closer to average and we expect a sub-consensus reading.”
The economists also think that the Fed’s signal for three rate rises this year “looks unrealistic”, and feel the US is strong enough for only two hikes, with teh next one likely in March.
Traders will also be watching for any change in the US unemployment rate, which dropped to 4.8% last month, as well as in wage growth, which was up 2.5% year-on-year in November to an average of $25.89.
Significant announcements expected …
Finals: C4X Discovery Holdings plc (LON:C4XD)