Friday preview: US non-farm payrolls to give clues about Fed's next move

With the corporates earnings calendar on the quiet side, markets will be sure to focus firmly on the non-farm payrolls report on Friday.

Consensus forecasts are for a 180,000 increase in non-farm payrolls in November after a 150,000 reading in October, resulting in an unchanged unemployment rate of 3.9%.

"The Federal Reserve has repeatedly expressed concern over tightness in the labour market leading through to inflation-triggering wage demands. This would make it more difficult to end their rate hiking programme," said David Morrison, analyst at Trade Nation. "This also suggests that equities will react positively to a lower-than-anticipated payroll release, and negatively to a strong one, initially anyway."

The data follows Wednesday's JOLTS survey which showed that job openings fell to their lowest level since May 2021. Then there was the ADP Employment Report revealing that private-sector employment increased by just 103,000 in November, versus expectations for a 130,000 increase. Meanwhile, October’s jump was revised to 106,000 from 113,000.

However, while the ADP report is usually seen as a rough guide for the government's 'official' report, numbers have diverged dramatically over recent months.

"There is no apparent correlation between this data and Friday’s official NFP read, but the fact that independent data point at further loosening in the US jobs market comforts the Fed doves in the idea that, yes, the US jobs market is finally giving in," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Also in focus will be the flash reading of the University of Michigan consumer sentiment index, which is expected to rise to 62 in December from 61.3 in November.

Meanwhile, the final reading of Germany's November consumer price index will be released. It is predicted to confirm the flash estimate last week which showed that the annual rate of inflation fell to a 29-month low of 3.2% in November, from 3.8% the month before.

In company news, only two major updates are expected: interim results from housebuilder Berkeley will be released, along with full-year figures from distribution company Diploma.

Friday 8 December

INTERIMS

Berkeley Group Holdings (The)

AGMs

Hargreaves Lansdown, Associated British Foods, Amedeo Air Four Plus Limited Red Ord NPV

GMs

Ura Holdings

ANNUAL REPORT

Diploma

FINAL DIVIDEND PAYMENT DATE

Genus, Galliford Try, NCC Group, NWF Group, Schroder Japan Trust, Ashmore Group, Avingtrans, CVS Group

INTERIM DIVIDEND PAYMENT DATE

British Smaller Companies VCT, Young & Co's Brewery (Non-Voting), Mincon Group (CDI), Touchstar, Invesco Perpetual UK Smaller Companies Inv Trust, Tatton Asset Management, Majedie Investments, Aquila European Renewables (GBP), SThree, Aquila European Renewables, VH Global Sustainable Energy Opportunities, Whitbread, Young & Co's Brewery 'A' Shares, Inspired

QUARTERLY PAYMENT DATE

Chenavari Toro Income Fund Limited NPV, Wheaton Precious Metals Corp.NPV (CDI), Unilever

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Consumer Price Index (GER) (07:00)

Unemployment Rate (US) (13:30)

Non-Farm Payrolls (US) (13:30)

U. of Michigan Confidence (Prelim) (US) (15:00)