Market themes of the Day: Fed Powell’s speech and NZ labor market data headline

What you need to know before markets open
Main themes:

  • The forward-looking indicators of the economic activity in the UK decelerated in January with services PMI at the brink of recession territory pushing the Sterling below 1.3000 level.
  • The Federal Reserve’s chairman Jerome Powell midnight speech headlines the day along with the New Zealand employment data.                                                               


  • The European Commission confirmed the President Jean Claude Juncker will meet the UK Prime Minister Theresa May on Thursday
  • The German composite PMI remained unchanged at 52.1 in the final reading for January after manufacturing slipped deeper to contraction territory of 49.7 and services PMI ticked lower to 53.0.
  • The Eurozone composite PMI was revised higher to 51.2 in a final reading for January, moving a bit more away from the 50 mark dividing the economic expansion from contraction.
  • The Eurozone retail sales fell -1.6% over the month in December and decelerated to 0.8% over the year.
  • German factory orders are expected to rise marginally by 0.3% over the month in December, recovering partly after November’s -1.0% fall.


  • The UK services PMI decelerated more than expected to 50.1 in January as new orders decline for the first time in two-and-a-half years sending Sterling to 1.3000 support level, the lowest level since January 23.


  • The Bank of Canada Deputy Governor Timothy Lane is due to speak about foreign reserve management at the Peterson Institute of International Economics, in Washington DC at 13:35 GMT.


  • The US ISM in non-manufacturing decelerated more than expected to 56.7 in January.
  • The US trade balance deficit is expected to improve to $-54.0 billion in December.
  • The US non-farm productivity and the unit labor costs are both ex[pected top have increased by1.7% over the quarter in the final three months of  2018.
  • The Federal Reserve chairman Jerome Powell is scheduled to speak at a virtual town hall meeting for teachers nationwide, in Washington DC at midnight GMT, the equivalent of US EST 8:00 pm. 

New Zealand

  • The unemployment rate in New Zealand is expected to tick up to 4.1% in the fourth quarter of 2018, up from 3.9% in the previous quarter.

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