It's going to be a busy week ahead with important data points expected in several countries, especially in the U.S.
The week will kick off with a few Fed members delivering their remarks Monday, followed by the U.S. CB Consumer Confidence print on Tuesday.
Wednesday, we'll get the preliminary GDP q/q; JOLTS Job Openings and pending home sales m/m for the U.S. and the CPI for the eurozone.
Thursday will bring the CPI m/m in Switzerland and the U.S. core PCE price index m/m, unemployment claims and ISM manufacturing PMI.
Friday will include the average hourly earnings m/m, non-farm employment change and the unemployment rate for the U.S. and employment change and the unemployment rate for Canada.
The month-end rebalancing will also occur this week and might cause some volatility in the market, so it's worth keeping an eye on.
The eurozone CPI y/y is expected to show signs of cooling down from 10.6% to 10.4% with the decline likely due to the drop in energy inflation, according to Citi.
The data should be closely watched as it can provide clues about the next rate hike at the December meeting.
Many analysts now expect a 50bps rate hike following comments from ECB policymakers who suggested a step down from 75bps is on the table.
In the U.S., Fed Chair Jerome Powell is expected to deliver his remarks Wednesday and might focus on inflation and the labour market. He could emphasize that the inflation target can't be achieved with current labour market conditions.
The Fed blackout period starts on December 3rd.
Analyst consensus for ISM manufacturing is 50.0, under last month's 50.2, reflecting a contraction.
According to Citi we'll see a weakening in hard manufacturing data, like production and durable goods orders over the coming months.
The U.S. PCE which is the Fed's preferred measure for inflation is likely to decelerate.
The non-farm employment change is likely to show signs of cooling down but is expected to remain solid.
The consensus is for a 200K gain in jobs (prior 261K).
The average hourly earnings m/m are expected to drop from 0.4% to 0.3%, while the unemployment rate will likely remain unchanged.
There is also a possibility that the data will print better than expected.
In Canada, all eyes this week will be on labour market data. Citi analysts expect a 15K decline in Canadian jobs and the unemployment rate to rise to 5.4% due to a return to strong immigration.
USD/CAD expectations
On the H1 chart the pair closed the week near the 1.3390 level of resistance which didn't hold.
The next target is 1.3490 and from there a correction is expected until 1.3360. In the short term the pair looks good for buying opportunities.
With plenty of data for the pair this week take caution as the bigger picture might be negative for USD/CAD.
There's a strong resistance at 1.3560 and if it holds, the next target could be 1.3245.
This article was written by Gina Constantin.
