Despite the National Day of Mourning on Thursday, 9th Jan, this week will be packed with data releases as well as Fedspeak for market participants to absorb. On 9th Jan, US stock markets are closed to mark the death of former US President Jimmy Carter. US bond markets will close at 2 p.m. New York time on 9th Jan. With respect to the data docket, it will be focused on the labor market and will culminate with Friday's jobs report for December. We expect the Dec’24 NFP headline no to come at 210k against current market estimates of 160k. With respect to the other elements of Friday's report, the unemployment rate should tick up a tenth to 4.3%, given that it was less than half a basis point away from doing so in November. Fed minutes for 18th Dec FOMC meet will be releasing on 8th Jan which might put light on how FOMC participants incorporated potential fiscal policy changes in their 2025 outlook. The minutes could also reveal some discussions on the neutral rate of interest. In dated UST auction supply, we have 3,10 & 30 yr UST auctions of size 58, 39 & 22 BN USD this week. In other economic data, we expect a strong ISM services on 7th Jan and expect it to come at 53.8 levels for Dec from 52.1 in Nov. IJC might remain subdued at 215k. JOLTS data for Nov'24 due on 7th Jan we expect to come at 7.86 MN, higher by 120k from Oct's no. In summary, the strong US economy narrative continues with bond yields elevated and DXY remaining strong. In Eurozone data, prelim data for HICP in Dec comes on Monday & Tuesday. We expect Eurozone HICP to come at 2.3% in Dec, marginally higher than 2.2% in Nov. German industrial production data is likely to come weak on 9th Jan owing to weak car productions. In summary, Eurozone area inflation remains subdued & growth remains anemic leading us to believe that sooner than later, EURUSD might test parity. ECB might cut deposit rates to 1.75% by end CY25 from current 3%.
