The week ahead - 2 - 6 December 2024
These are the Key Macro Events for the upcoming week.
United States – We start the week with ISM manufacturing, which we expect to increase to 47.5, following two months of declining activity driven by hurricanes and strikes. ISM services on Wednesday will remain high around 55.5. Job openings on Tuesday is likely to rebound a bit, after the strong decline in September, to 7600k. Friday's non-farm payrolls will see a weak rebound from last month's 12k reading as hurricane impacted workers and the 40k workers form the Boeing strikes return to work. Accounting for that reversal, we expect non-farm payrolls to come in at 170k, still a relatively weak reading considering the circumstances. Along with an uptick in the labor force participation, we expect the unemployment rate to tick up to 4.2%, with even a risk of it reaching 4.3%.
Eurozone – Retail sales are likely to pull back a touch after a strong run of gains in recent months, but the overall improvement in domestic demand should remain intact. The unemployment rate is expected to hold steady, with upward pressure from German labour market weakness offset by ongoing strength in the periphery.
Germany – Industrial production and factory orders for October are released next week. German factory orders are likely to pull back slightly from the increase seen in September. The Manufacturing PMI indicated that output in the German manufacturing sector has strengthened in October and November. As a result, we anticipate a slight increase in industrial production compared to September.
China – November PMIs are expected to improve a bit further, in line with our expectation that quarterly growth will materially pick-up in Q4 (following a weak pace in Q2/Q3). That reflects Beijing’s pivot from industrial policy towards demand management from September onwards, while net exports will likely benefit from frontloading of trade ahead of expected US import tariffs under the 2nd Trump administration.