In the European session, the focus will be on the Swiss CPI and especially on the Eurozone CPI as the market's pricing for the ECB remains very dovish. In the American session, the attention will switch to the ISM Services PMI and the US Job Openings.
07:30 GMT - Switzerland December CPI
The Swiss CPI Y/Y is expected at 0.6% vs. 0.7% prior, while the M/M measure is seen at -0.1% vs. -0.1% prior. As a reminder, the
SNB cut its policy rate by 50 bps at the last decision bringing it to 0.50% and dropped the language signalling further cuts in the coming quarters.
This suggests that the central bank will likely slow the pace of easing which is something that the market was already expecting with two 25 bps cuts priced in for this year. The SNB has projected inflation to average 0.3% in Q1 2025, so this is going to be the baseline for the next meeting in March.
10:00 GMT - Eurozone December CPI
The Eurozone CPI Y/Y is expected at 2.4% vs. 2.2% prior, while the Core CPI Y/Y is seen at 2.7% vs. 2.7% prior. As a reminder, the
ECB cut the policy rate by 25 bps at the last decision bringing it to 3.00%.
The central bank removed the passage saying that “it will keep policy rates sufficiently restrictive for as long as necessary” implying that upside inflation risks have faded. The market sees a 91% probability of a rate cut at the upcoming meeting and a total of 98 bps of easing by year end.
15:00 GMT/10:00 ET - US December ISM Services PMI
The US ISM Services PMI is expected at 53.0 vs. 52.1 prior. The
S&P Global US Services PMI showed once again an acceleration in services activity rising to a 38-month high. New orders rose at a rate not seen since March 2022 and inflation remained subdued with prices rising at the slowest pace since June 2020. Definitely a very good picture for the services sector.
15:00 GMT/10:00 ET - US November Job Openings
The US Job Openings are expected at 7.700M vs. 7.744M prior. The
last report beat expectations with the quits rate rebounding but the hiring rate falling back to the cycle lows. It’s a labour market where at the moment it’s hard to find a job but there’s also low risk of losing one. There’s a decent chance that things will improve this year though and there have been some positive signs already.
This article was written by Giuseppe Dellamotta at
www.forexlive.com.
