In the US, the ADP employment and initial jobless claim figures will attract some attention ahead of the important December jobs report, which is due out tomorrow. Moreover, the ISM non-manufacturing index is set to be released, and we expect this to show a continuation of the strong growth signals. However, as the index jumped to 57.2 in November, while the Markit PMI service index stayed more or less unchanged, we see a downside risk to the ISM non-manufacturing index in December due to volatility, and estimate the index declined to 55.9, which is still solid.
In the euro area, the account of the ECB meeting in December is due to be released. Focus will be on the discussion related to the changes to the parameters of the asset-purchasing programme, especially regarding the change that allows the ECB to purchase bonds that yield below the -0.4% deposit rate. As it remains uncertain how 'aggressive' the ECB will be in terms of buying below the deposit rate, market participants will look for an answer to this.
In the UK, the PMI service for December is due and we think risk is skewed towards a fall in PMI services due to lower services confidence. We look for a fall from 55.2 to 54.2, which still indicates solid growth in the service sector. Overall, PMIs should continue to signal solid Q4 growth and that the economy is still quite resilient to Brexit uncertainty. That said, we expect GDP growth to slow but stay positive this year. See Research UK: 'Brexit' uncertainty set to prevail in coming years , 4 January 2017, for more details on the outlook for the UK economy.
Statistics Denmark is due to publish housing prices for October and bankruptcies, repossessions and unemployment data for November.
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