Although market attention remains on the geopolitical outlook amid the Russian invasion of Ukraine, the economic calendar will also have a part to play this week. Turning into the first week of the new month, financial markets always have a large serving of tier one data to digest. PMI data for the major economies give a view of the current economic situation as we move into March. There are a couple of major central banks including an expected rate hike by the Bank of Canada. The week then rounds off with another crucial US jobs report.

Watch for: 

  • North America – US ISM and Nonfarm Payrolls along with the Bank of Canada monetary policy decision
  • Europe & Asia – The RBA meeting, Eurozone inflation and PMIs for China, the Eurozone and the UK. 
  • LatAm – Unemployment for Mexico, Chile and Colombia, in addition to Brazilian GDP


North American data: 

  • Canada GDP (Tuesday 1st March, 1330GMT) Annualised GDP is expected to be 5.5% in Q4
  • US ISM Manufacturing (Tuesday 1st March, 1500GMT) The survey is expected to improve slightly to 58.0 in February (from 57.6 in January)
  • ADP Employment (Wednesday 2nd March, 1315GMT) Employment change is expected to be +323,000 in February (after the surprise fall of -301,000 in January).
  • Bank of Canada monetary policy (Wednesday 2nd March, 1500GMT) Consensus is looking for a +25 basis points hike to 0.50% in February (from 0.25% previously)
  • Fed Beige Book (Wednesday 2nd March, 1900GMT) 
  • US ISM Services (Thursday 3rd March, 1500GMT) The Services survey for February is expected to improve to 61.0 (from 59.9 in January)
  • US Factory Orders (Thursday 3rd March, 1500GMT) Consensus is looking for +0.5% monthly growth in January (after a decline of -0.4% in December)
  • Non-farm Payrolls (Tuesday 1st March, 1330GMT) Headline jobs are expected to moderate slightly but still grow by +338,000 in February (467,000 in January)

After two months of deterioration for both ISM Manufacturing and ISM Services, the consensus is looking for recovery for February’s data. It will be interesting to see if there is an account for the negative economic implications of the Ukrainian conflict in the data. A third month of deterioration may leave a few on the FOMC less decisive in their perception of monetary policy.

ISM Services PMI

The Bank of Canada is expected to start raising rates this week. A first hike of +25 basis points (to 0.50%) is expected. The key issue will be how hawkish the forward guidance that comes with the hike. If it is anything like the Reserve Bank of New Zealand last week, this would boost CAD.

The week rounds off with the crucial US jobs report. FOMC members have been touting the importance of the data in how quickly rate hikes could be delivered. Headline Nonfarm Payrolls growth of 338,000 is expected. Another number above 400,000 would be considered to be strong. Wage growth will also be seen as a key indicator for inflation expectations, so anything above 6% will flash the warning lights again. The ADP number comes a couple of days before the jobs report, but has been a poor indicator for payrolls for almost a year now. Subsequently, traders are likely to treat any surprises in the ADP with a pinch of salt.

US Nonafarm Payrolls

Market Reaction: 

  • USD will react to surprises in the ISM data, whilst Nonfarm Payrolls will result in elevated volatility.
  • CAD volatile around the BoC with a focus on the forward guidance of future hikes.


Europe & Asia: 

  • Reserve Bank of Australia monetary policy (Tuesday 1st March, 1330GMT) Consensus expects the RBA to hold rates at +0.10%.
  • China PMIs (Tuesday 1st March, 0100GMT) Consensus expects the official manufacturing PMI to improve slightly to 50.4 (from 50.1) and services to improve to 51.5 (from 51.1).
  • Eurozone Manufacturing PMI - final (Tuesday 1st March, 0900GMT) Consensus expects the survey to be unrevised at 58.4.
  • UK Manufacturing PMI - final (Tuesday 1st March, 0930GMT) The survey is expected to be unrevised at 57.3
  • Eurozone inflation - prelim (Wednesday 2nd March, 1330GMT) Prelim February inflation is expected to increase slightly on the headline to 5.2% (from 5.1% in January) with core inflation steady at 2.3% (from 2.3% in January).
  • Eurozone Services PMI - final (Thursday 3rd March, 1330GMT) Final services are expected to be unrevised at 55.8.
  • UK Services PMI - final (Thursday 3rd March, 1330GMT) Final services are expected to be revised slightly lower to 60.2 (from 60.3 flash data)
  • Eurozone Unemployment (Thursday 3rd March, 100GMT) Unemployment is expected to remain steady at 7.0% in January (from 7.0% in December).
  • ECB meeting minutes (Thursday 3rd March, 1230GMT) 

The Reserve Bank of Australia is the other major central bank to update monetary policy this week. The RBA is not expected to change rates (at +0.10%). However, unemployment is at 4.2% and the lowest since 2008. Also, CPI inflation is up at 3.5% and the RBA’s trimmed mean CPI inflation is at 2.6% (an 8 year high) whilst wage growth is rising fast. The focus of this meeting will be on the prospect of when rate hikes will be seen. Analyst expectations are increasingly for a rate hike around Q3 of this year. 

Flash Eurozone inflation is expected to show a continued tick higher in the headline inflation to 5.2% in February. However, the core inflation is expected to stay at 2.3% for another month. A tick back higher in the core data would be concerning, especially in front of the Ukrainian conflict which is likely to prolong inflation at elevated levels.

Eurozone inflation  

The PMIs come throughout the week across major economies. A general trend of improvement is expected in February. However, it will be interesting to see whether the geopolitical tensions of the Ukrainian conflict will impact and cause negative surprises (especially to the Eurozone data).    

Final Composite PMIs

Market Reaction: 

  • AUD to react positively to any hawkish signals from the RBA
  • Any upside surprise on inflation would help to support EUR
  • Chinese PMIs higher than expected would support broad risk appetite
  • Any negative surprise to Eurozone PMIs would be EUR negative


Latin America: 

  • Mexico Unemployment (Monday 28th February, 1200GMT) The rate is expected to remain at 3.5%
  • Chile Unemployment (Monday 28th February, 1200GMT) Unemployment is expected to remain at 7.2%
  • Colombia Unemployment (Monday 28th February, 1500GMT) The rate is expected to improve slightly to 10.8%
  • Brazil Manufacturing PMI (Thursday 3rd March, 1300GMT) A slight improvement to 48.0 (from 47.8 in January)
  • Brazil GDP (Friday 4th March, 1200GMT) Growth of -0.2% QoQ is expected.

Lat Am currencies have not reacted well to the risk aversion of the Ukrainian conflict that has driven a stronger USD. This is hampering their undoubted trends of improvement in recent months. If the consensus is anything to go by, unemployment data is unlikely to impact too much. Although the jobless rate has been falling in Chile for the past nine months and in Mexico for the past five months, expectations suggest these improvements will stall in January. Although, there is a slight improvement expected in Colombia.

Brazilian manufacturing PMI is expected to remain in contraction territory in February (although this is slightly better than in January). The trend of sluggish economic activity which was a feature of Q4 2021 is continuing.

Lat Am currencies

Market Reaction

  • Downside surprises on unemployment rates would help to support MXN, CLP and COP.
  • BRL will react to the PMI and GDP data later in the week.