It's An Extremely Busy Week Ahead: Here Are The Highlights

  • Written by Zero Hedge
  • Published in Economics

While markets are still digesting the outcome from the Trump-Xi meeting, attention will quickly turn to a number of potentially interesting  events  for  markets  including  the  OPEC/OPEC+  meeting, the November jobs report in the US, the global November PMIs and Fed Chair Powell's speech before Congress (which some claim has been pushed back from Wednesday to Thursday as the market will be closed on Wednesday to commemorate the death of George H.W. Bush).

With stocks soaring this morning on the favorable "truce" outcome from this weekend's Trump-Xi dinner and to a lesser extent, the consensus G-20 communique signed in Buenos Aires, the next big event for markets next week is likely to be the OPEC/OPEC+ meeting on Thursday and Friday in Vienna. It's possible that we get some early hints as to what to expect out of the G20 over the next couple days, however the big question facing the market is whether a consensus can be formed between Saudi Arabia, Russia and the US, especially with US President Trump recently raising the pressure level on Saudi Arabia to keep prices low through raising production- a strategy which has seemingly worked with WTI over 30% lower in the last two months.

As for the big data highlight, in light of what appears to be a noticeable shift in tone at the Fed to a more dovish leaning, particularly after Powell's speech this week, and also coming off the back of a slight hiccup in the latest PCE data, expect there to be plenty of focus on the November employment report on Friday. Consensus is for a 205k reading following a stronger-than-expected 250k reading in October. For earnings, the consensus is currently pegged at a +0.3% mom average hourly earnings reading, which would be enough to nudge up the annual rate to +3.2% yoy. The unemployment rate is expected to hold steady at 3.7% with hours also expected to be unchanged at 34.5 hours.

Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee. But the hearing is expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honor of former U.S. President George H.W. Bush, who died on Friday at the age of 94. Last week, Powell backed the Fed's gradual tightening but said its policy rate was "just below" a range of estimates of the so-called neutral level that neither stimulates nor cools growth. In response, stocks shot up and largely recovered November's earlier losses.

Deutsche Bank would highlight Powell's speech as a focal point for the week however in light of his dovish comments on November 28th, it would probably be a surprise to see the Fed Chair diverge from his recent views. With that in mind, the market will likely look for reaffirmation that there is a rising risk of a Fed pause as early as the first half of 2019.

As for the other...

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