Macroeconomics: The Day Ahead – 4 January 2021

Good Morning: The Long & the Short of it and The Bigger Picture

Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist

  • New Year but politics and pandemic related news still front and centre;  Manufacturing PMIs dominate schedule, OPEC+ meeting, Fed speakers, Asia  currency strength also in view; US political developments cast shadow
  • Manufacturing PMIs: Asia sets positive tone, likely echoed in Europe and  North America, but Services employment still the key issue
  • Voracious risk appetite faces challenge from skews in positioning and  prospective risk/reward


The New Year starts with most of the same political and virus themes in the ascendancy, and rendering much of the incoming macroeconomic data to a subordinated role, with the usual start of month Manufacturing PMIs (N.B. the US ISM manufacturing is published tomorrow) dominating the schedule of data, and Fed speakers topping the events schedule along with the monthly OPEC+ production meeting. The rapid rise in or persistently high level of infection rates continues to push further back on timelines for a vaccine assisted recovery (with distribution and actual vaccination rates in the spotlight), leaving an array of questions about the voracious overall level of risk appetite across asset classes, above all given the skews in positioning and risk/reward, which at the very least are likely to be a source of more elevated levels of volatility. But it is worries about democratic institutional processes in the U.S.A. which are in focus via way of the run-off Senate elections in Georgia, and the inaugural session of the new Congress on Wednesday which will be the focal point for the middle of the week. In the U.K. it will probably be a number of weeks before it becomes clear how much Brexit related disruption there will be to the economy, but the immediate crisis of confidence in the UK’s political leadership due to its management of the pandemic fall-out is the initial concern. Asian Manufacturing PMIs continue to underline that the latest round of activity restrictions is having little or no impact on the sector, with the fall in China’s Caixin PMI from a multi-year high still indicative of a solid pace of output, particularly given that outlooks remain very positive. That said the cooling of export demand, rising input prices and a drop below 50.0 for the Employment sub-index for the first time in 3 months offer notable points of concern, despite the broad strength across much of the rest of Asia. European and North American PMIs are expected and likely to echo trends in Asia, however the severe impairment of activity in the Services sector and the risks to employment as a consequence are the material issue, even if businesses are clearly adapting better to the current set of restrictions. Yesterday’s OPEC meeting unsurprisingly highlighted an array of downside risks to growth and demand in H1 2021, and as such today’s OPEC+ meeting is expected to keep production levels unchanged. Currency markets will be the other focal point as the CNY powered down through the key 6.50 level vs the USD, and the JPY tests the 103.00 level, seen as a trigger level for Japanese authorities to take a more active stance to quell strength.


To view the full report and to sign up for daily market commentary please email

The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI.

© 2020 ADM Investor Services International Limited.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2024 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now