Major traders watching PMIs, JOLTs in focus

Tuesday trading started with the Australian Reserve Bank keeping the interest rate at a record low of 0.1% and ending its A$275 billion ($194.40 billion) bond purchase program, as expected. However, the bank declined market forecasts for an early rate hike.

The euro pairs are mostly trading rangebound as traders await PMIs data from Eurozone, Britain and US.

Along with the PMIs for France and Italy, the monthly index of German purchasing managers and the unemployment rate change released at 11:00 am are likely to have a significant impact and cause the euro to fluctuate. It is expected that the index would rise to 60.5 in January, up from its previous reading of 57.4.

Similarly, the PMI for the European Union is also expected to have improved. Furthermore, the January unemployment rate could fall by 0.1%to 7.1%. By clarifying the economic outlook, especially before the European Central Bank meeting in the coming days, the euro could stop falling against the dollar in the short term.

Investors keenly watch Canada’s GDP growth for November, which could be a headwind to CAD while rising oil prices support the Canadian dollar. As a result, Canada’s economic growth during the peak of the Omicron spread is expected to have slowed by 0.5%, with only a 0.3% rise.

Also on the calendar for Tuesday are the US ISM PMI and JOLTs. It is expected that the Purchasing Managers’ Index has dropped by more than one point to 57.5 in January. The number of new jobs is also likely to decrease in December following weak labour market data.

The Labor market is watched closely by market participants, as improving this market will play a critical role in intensifying the Federal Reserve’s contractionary policies to further rate hikes.

Changes in seasonal employment in New Zealand will be another important data point that will be released in the Asian trading session. That could push the New Zealand dollar out of neutral against the pound, euro and dollar.