Market themes of the Day: ADP indicates heck of a strong non-farm payroll reading in December

What you need to know before markets open
Main themes:

• The ADP private employment report saw job creation surpassing strongly the market expectation suggesting the government report will come out also with solid results. For more details read my ADP versus NFP Analysis here.
• Apple’s warning on revenue outlook dragged global stocks lower in a sign of negative sentiment building up.
• The US non-farm payroll is headlining the first week of January with the expectations of 177K new jobs added in December, the wages growing by 3.0% y/y and the unemployment rate dwelling at 3.7%. For more details read Joseph Trevisani’s Preview here. 
• The US Federal Reserve Chairman Jerome Powell is scheduled to speak at the panel discussion with Atlanta Fed President Raphael Bostic at 15:15 GMT with markets eager to seek monetary policy outlook hints amid rising uncertainty.
• Trade talks between the US and China will continue on January 7-8 in Beijing.

Europe

• The ECB reported a broad monetary aggregate M3 deceleration to 3.7% y/y while private loans growth rate remained stable rising 3.3% y/y in November. 
• Services PMI in Germany is expected to confirm a preliminary reading of 52.5 in December.
• The Eurozone services PMI is seen decelerating to 51.4 in December.
• The Eurozone inflation is expected to decelerate to 1.8% y/y in December with core inflation stagnant at 1.0% y/y.

Canada

• Canada’s employment is expected to rise by 5K in December after super strong 94.1K in the previous month with the unemployment rate 

US

• The ADP private employment report saw 271K new jobs generated in the US economy in December compared with a revised 157K in November. December AFP delivered the highest number of new jobs since February 2017 and the fourth highest since the recession of 2009. For more details read my ADP versus NFP Analysis here.
• The ISM manufacturing PMI decelerated sharply to 54.1 in December from 60.1 in the previous month, lining up with the rest of the big economies that reported a pood manufacturing sector activity at the beginning of 2019.
• Dallas Federal Reserve President Robert Kaplan said for the Bloomberg TV that he favors pause in the interest hiking cycle amid uncertainty. Kaplan is a non-voting member of the rate-setting FOMC.
• The US non-farm payroll is headlining the first week of January with the expectations of 177K new jobs added in December, the wages growing by 3.0% y/y and the unemployment rate dwelling at 3.7%. For more details read Joseph Trevisani’s Preview here.