U.S Nonfarm Payrolls to Put the Dollar and the FED back in the Spotlight

Earlier in the Day:

It was a relatively quiet start to the day on the economic calendar this morning. The Japanese Yen was in action this morning, with household spending and inflation figures from Japan in focus.

For the Japanese Yen

In November, household spending slid by 1.2% versus a forecasted 1.2% rise month-on-month. Spending had risen by 3.4% in October. Year-on-year, spending was down 1.3% versus a forecasted increase of 1.6%. Spending had been down by 0.6% in October.

According to the Statistic Bureau,

• Spending on housing was down 15.8% with spending on fuel, light, & water charges falling by 7.1%.
• There were also declines in spending on culture & recreation (-3.7%), education (-3.0%), food (-3.0%), and furniture & household utensils (-0.3%).
• Sending on consumable expenditures declined by 1.3%.
• There was an 8.9% rise in spending on clothing & footwear, however.
• Spending on transportation & communication increased by 5.8%, with spending on medical care up 0.9%.

In December, Tokyo’s core annual rate of inflation ticked up from 0.3% to 0.5%, which was in line with forecasts.

According to the Ministry of Internal Affairs and Communication,

• Prices for fuel, light, & water charges rose by 12.0% year-on-year, while prices for transportation & communication was down by 10.4%.
• Culture & recreation prices were up 4.8%, with education up by 1.4%.

The Japanese Yen moved from ¥115.886 to ¥115.870 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.04% to ¥115.880 against the U.S Dollar.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.09% to $0.6754, with the Aussie Dollar up by 0.01% to $0.7163.

The Day Ahead

For the EUR

It’s a busy day ahead on the economic calendar. Going into the European open, German industrial production and trade data will draw attention. Later in the morning, however, prelim December inflation figures for the Eurozone will be key. Another sharp pickup in inflationary pressure could force the ECB to change tact.

Other stats include Eurozone retail sales figures that should have a muted impact on the EUR.

At the time of writing, the EUR was up by 0.03% to $1.1300.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Construction PMI and house price figures are due out. We don’t expect the numbers to have a material impact on the Pound, however. While the FED has laid the foundations for a possible hike in March, the markets are expecting the BoE to deliver more hikes near-term. Economic data continues to support a more hawkish stance on policy.

At the time of writing, the Pound was up by 0.11% to $1.3547.

Across the Pond

It’s a big day ahead on the economic data front. Nonfarm payrolls will be the key stat of the day. A sharp rise in payrolls is expected to force the FED into a March rate hike.

At the time of writing, the U.S Dollar Spot Index was down by 0.10% to 96.227.

For the Loonie

It’s a busier day ahead. Ivey PMI and employment figures for December are due out later today. Expect the employment figures to be key.

At the time of writing, the Loonie was up by 0.13% to C$1.2713 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.