Weekly Fundamental Bulletin: US Data Kicks Off 1st Trading Week Of 2021

ISM manufacturing PMI to ease in December

US manufacturing activity for December is set for release by the Institute for Supply Management.

Forecasts show that ISM manufacturing activity will ease to 56.6 in December. This is down from 57.5 from the month before.

The data will likely underline an uneven growth after manufacturing activity peaked in October this year.

Labor shortages are expected to dampen output gains. Despite the drop, the ISM manufacturing index remains well above 50, suggesting an expansion.

Investors await meeting minutes from December FOMC

The US Federal Reserve Bank will be releasing the meeting minutes from its December FOMC meeting.

The meeting offered little evidence that policymakers were leaning toward either raising QE or altering the maturity distribution of purchases in the near term.

For investors, the interest will be to understand the context of the Fed’s message which talked about the substantial further progress.

Investors will be looking for evidence of what policymakers will need to see before scaling back the Fed’s asset purchases.

Investors look to the December payrolls report

On Friday, the monthly payrolls report for December will be coming out.

The general estimates are for payrolls to rise about 82,000 during the month. This marks a dramatic decline comparing to 245k from November.

The unemployment rate is also forecast to rise back to 6.8%, after falling to 6.7% previously.

The dovish outlook comes as the initial surge in job creation post the first Covid-19 lockdown came to a crashing halt in December.

The participation rate is also forecast to drop from around 63% in November to 60% in December.

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