Five things to note before the market trades this week, Jan 5-11

A pedestrian walks past a "now hiring" sign posted on the window of a shop on Nov 7, 2014 in San Rafael, California. Last year, the U.S. economy recovered all of the jobs lost during the Great Recession and more. -- PHOTO: AFP
A pedestrian walks past a "now hiring" sign posted on the window of a shop on Nov 7, 2014 in San Rafael, California. Last year, the U.S. economy recovered all of the jobs lost during the Great Recession and more. -- PHOTO: AFP

It's back to business for markets on Monday with 2015's first full trading week following the Christmas and New Year holidays.

The highlight of the week is expected to be the latest US jobs data with the ADP employment report for private sector numbers set for release on Wednesday, followed by weekly jobless claims on Thursday, and the government's employment data on Friday.

1. US jobs report to close 2014 with a bang

Five years after the Great Recession, 2014 is the year the U.S. economy recovered all of the jobs lost, and then some.

Economists are expecting data out on Friday to show that almost a quarter million jobs were added in December to cap the strongest year for payroll growth since 1999. The US unemployment rate is tipped to fall to 5.7 per cent from November's 5.8 per cent.

Through the first 11 months of last year, the US job market added 240,000 new jobs on average each month. If that pace of job creation continued in December, close to 3 million jobs would have been added in 2014.

These numbers will help to set the tone for US interest rate expectations and the course for the US dollar in 2015.

2. Playing Blue's Clues with the Fed

More clues will come when the US central bank's policy-making body, the Federal Open Market Committee (FOMC), releases the minutes from its December meeting on Wednesday. The FOMC pledged in its policy statement after that meeting that US interest rates will be kept low for a "considerable time" with an assurance it would be "patient" in the timing of liftoff. Federal Reserve chairwoman Janet Yellen told reporters that meant no rate increases for at least the next two meetings, indicating no move before the FOMC gathers on April 28-29.

Investors will now sieve through the minutes of that meeting with a fine-tooth comb for more clues on when and how the Fed is likely to move on interest rates and its outlook for the US economy.

3. Eurozone battling deflation, recession and a possible Grexit

The latest eurozone consumer price index (CPI) out on Wednesday will be closely watched for the first sign of deflation or falling prices. Some economists believe these latest numbers from Eurostat will reveal the first negative reading ever for the currency bloc's consumer prices.

Another key economic indicator - PMI (purchasing managers' index) for the services sector - will be out this week for the eurozone as a whole for its individual member nations. The forward-looking PMI comes from surveys of a country's purchasing managers on how they see business conditions for their industry.

Meanwhile, Spiegel news magazine reported on Saturday (Jan 3) that the German government believes a Greek exit from the eurozone would be "manageable" if needed, news bound to add more uncertainty and volatility to currency, bond and stock markets. Greece faces snap elections on January 25 that might shift the power to the Syriza party, which wants to renegotiate the country's bailout from the European Union and the International Monetary Fund.

4. Disinflation fears for China too

On Friday, China will release its consumer inflation and producer prices for December, with Moody's Analytics predicting the CPI to rise 1.6 per cent from the year-ago period, a tick higher from November's 1.4 per cent rise - which was a five-year low. Friday also sees the release of November import and export figures for China.

Weakening inflation numbers, along with a string of weak economic data, have fanned fears about a deeper-than-expected slowdown in the world's second-largest economy. Weak consumer prices are the result of falling commodity prices due partly to weak domestic demand - a sign of China's slowing economy.

5. What about Singapore?

After Friday's disappointing economic growth figures for the fourth-quarter of 2014, which were weighed down by manufacturing's poor performance, Monday's PMI factory index for Singapore will help indicate how the trade-reliant sector will fare going forward in the face of weaker overseas demand.

For domestic demand, there is November retail sales data out on Thursday, and non-oil export figures for December on Friday.