In the first full trading week of the new year 2025, many market participants are likely to return from their vacation and join the ongoing stock market action. In addition to the FOMC minutes from the latest Fed meeting, attention is likely to focus in particular on the official US labor market report.
China data and US economic data at the start of the week as potential drivers
As in the previous week, investors should first keep an eye on important China data. The Caixin PMI index for the services sector (02:45) is likely to provide important data from the Middle Kingdom. At the beginning of the year, there were already contradictory signals about the current state of the Chinese economy. China's economy continues to groan, not least due to the ongoing real estate crisis.
On Tuesday, the ISM index for the service sector in the United States will be published (16:00). At the same time, the so-called JOLTSs (Job Openings and Labor Turnover Survey), which reflect the vacancies on the labour market, will also be published.
ADP data likely to provide first foretaste of NPFs - Fed minutes in focus
Usually, the so-called ADP data in the middle of the week (14:15) give a first foretaste of the official US labor market report (Non-Farm Payrolls).
The transcripts of the latest Fed meeting will be published on Wednesday evening at 20:00. Investors are hoping for new clues about the future shape of US monetary policy. Shortly before Christmas, the Fed cut the key interest rate again by 25 basis points to a range of 4.25 to 4.50 percent, but held out the prospect of a more cautious approach for 2025 as a whole.
High tension ahead of US labor market data on Friday - investors hope for a decline in non-farm payrolls
While Thursday will see less relevant economic data, the focus is likely to be all the more on Friday.
The US labor market data for December will be published at 14:30. Economists expect an increase in non-farm payrolls of only 150,000, after a total of 227,000 jobs in the previous month.
The unemployment rate is likely to remain at 4.2%, unchanged from November. The development of average hourly wages could also be of interest, which are estimated to have risen by just 0.3% compared to the previous month and therefore less strongly than before (0.4%).
Should the labor market show signs of weakness, this could in turn fuel investors' interest rate cut fantasies. The CME Group's "Fed Watch Tool" currently anticipates only a small chance (10.7%) of a further rate cut at the first Fed meeting of the new year at the end of January.
Finally, preliminary consumer sentiment data (Michigan) at 16:00 could provide important impetus.
