Investing.com — It will be a busy week with US jobs data, minutes from the Federal Reserve meeting and several Fed speakers, along with inflation data from the Eurozone and China. Meanwhile, US markets are scheduled to remain closed on Thursday in honor of former President Jimmy Carter. Here’s your look at what’s happening in the markets for next week.
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Job report
Friday’s jobs report is expected to show the US economy added jobs in December, while the unemployment rate is expected to hold steady at .
Labor market data has been volatile in recent months due to disruptions caused by strikes and hurricanes. Data for November showed a gain of 227,000 jobs, rebounding from a slight increase in October.
With investors barely waiting for two interest rate cuts by the Federal Reserve this year, the data is likely to remain consistent with a gradually slowing but still solid labor market.
Ahead of Friday’s report, investors will get other updates on the strength of the labor market. The U.S. will release monthly job vacancies data on Tuesday, followed by data and the weekly report on Wednesday, which is released a day earlier ahead of Thursday’s National Day of Mourning.
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Minutes entered, speakers
On Wednesday, the Fed is due to report from its December meeting in which it made its third consecutive 25 basis point rate cut in what Chairman Powell described as a “closer call.”
“Given Powell’s description of the meeting and the disagreement with Cleveland’s Hammack, we doubt the minutes will detail the divergence of views on the appropriate course of action at the meeting,” Deutsche Bank analysts said in a note. “We will also look for clues about how officials have reflected upcoming changes in fiscal, trade and immigration policy in their forecasts.”
Investors will also get a chance to hear from several Fed officials during the week with speeches by Governors Cook and Waller on Monday and Wednesday likely to be the most important. Richmond Fed President Thomas Barkin and Philadelphia Fed President Patrick Harker will also make remarks.
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Stock markets
In late December and early January, after a strong year, stocks weakened. The benchmark closed 2024 with growth of 23% and recorded the largest two-year increase since 1997-1998.
The outlook for a third consecutive successful year depends in part on the strength of the economy, and labor market data are among the most important indicators of the economy’s health.
The data could also help clarify the outlook for interest rates after the Fed jolted markets last month by turning to a more cautious outlook for rate cuts while raising its forecast for expected inflation in 2025.
Investors are wary of a jobs report that reveals an overly strong economy, with a resurgence of inflation under the incoming Trump administration seen as one of the key risks for markets at the start of the year.
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Inflation data
Expectations of further interest rate cuts by the European Central Bank will be tested by December eurozone inflation data on Tuesday. and inflation data is due to be released on Monday.
Any signs that inflation is easing further would give the ECB room to loosen policy and support the struggling economy.
Meanwhile, China will release data on Thursday. The annual rate of inflation was almost unchanged in December while the PPI was in contractionary territory, indicating that the government’s stimulus measures have still failed to boost demand.
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Oil prices
Oil prices ended last week higher as the demand outlook was boosted by cold weather in Europe and the US along with additional economic stimulus flagged by China.
recorded a weekly gain of 3.3%, while it recorded a growth of 5%.
Oil prices look set to remain supported due to expected increased demand following the forecast for cooler weather in some regions.
Last week’s data showing a decline in US crude inventories also supported prices.
But oil’s gains appear likely to be kept in check by stronger expectations that the US economy will continue to outperform its global peers this year and that US interest rates will remain relatively higher.
