World Week Ahead: Yellen, ECB, OPEC
World Week Ahead: Yellen, ECB, OPEC
By
Margreet Dietz
Nov. 30 (BusinessDesk) - A speech by
Federal Reserve Chair Janet Yellen as well as the latest US
jobs data will draw the focus in the coming days as
investors refine bets that policy makers are set to increase
interest rates at their December meeting.
“The
market continues to come to peace with the idea that the Fed
will do its first increase in mid-December,” David
Donabedian, chief investment officer of Atlantic Trust
Private Wealth Management, told
Bloomberg.
Meanwhile, eyes will also be squarely on
the European Central Bank meeting on Thursday, as euro-zone
policy makers are expected to expand their efforts to boost
the region’s economy and inflation.
And finally,
Friday’s meeting of members of the Organisation of
Petroleum Exporting Countries will garner attention as oil
prices continue to suffer from a global excess of supply,
with Brent crude at US$44.86 a barrel on Friday and West
Texas Intermediate at US$41.71 a barrel.
OPEC is
forecast to stick with its strategy of defending market
share by maintaining output and driving down higher-cost
production elsewhere, according to analysts and traders
surveyed by Bloomberg.
Yellen is scheduled to speak
at the Economic Club of Washington on Wednesday and deliver
testimony to the Joint Economic Committee of the Senate on
Thursday.
Several other Fed officials are slated
to speak this week too, including Chicago Fed President
Charles Evans on Tuesday, Atlanta Fed chief Dennis Lockhart
and San Francisco Fed boss John Williams on Wednesday,
Cleveland Fed President Loretta Mester and Fed Vice Chair
Stanley Fischer on Thursday, as well as Philadelphia Fed
chief Patrick Harker, St Louis Fed boss James Bullard and
the Minneapolis Fed’s Narayana Kocherlakota on
Friday.
A US government report on Friday is
expected to show non-farm payrolls rose by 200,000 in
November, while the unemployment rate held at 5.0 percent,
the lowest in more than seven years. Other US jobs data in
the coming days include the ADP employment report on
Wednesday and weekly jobless claims on Thursday.
A host of other data set for release this week
include Chicago PMI, pending home sales index, and the
Dallas Fed manufacturing survey, today; motor vehicle sales,
PMI and ISM manufacturing indices, and construction
spending, due Tuesday; productivity and costs, and the Fed's
Beige Book, due Wednesday; PMI services index, factory
orders, and the ISM non-manufacturing index, due Thursday;
and international trade, due Friday.
Last week,
shortened by the US Thanksgiving holiday, the Standard &
Poor’s 500 Index inched 0.04 percent
higher.
Meanwhile Europe’s Stoxx 600 Index added
0.5 percent in the past five days.
ECB President
Mario Draghi has been vocal about the central bank’s
commitment to bolster inflation. A Reuters poll of more than
50 economists predicted that the ECB will cut the deposit
rate to -0.3 percent, from -0.2 percent, it will increase
its monthly asset purchase program to 75 billion euros per
month, from 60 billion euros, and extend the program beyond
September 2016.
“Expectations have increased
further ahead of [this] week’s ECB meeting and ECB
speakers have not done much to rein in expectations,”
Deutsche Bank analysts wrote in a note to investors,
according to Reuters. “Draghi has overdelivered in the
recent past but it could be harder this time given how much
has been promised.”
Gold posted its sixth
straight week of losses, hitting the lowest level in five
years on Friday.
Half of the gold coming from
mines may not be viable at current prices, Randgold
Resources Chief Executive Officer Mark Bristow told
Bloomberg.
“The more we continue to produce
unprofitable gold, the more pressure we put on the gold
price,” according to Bristow. “In the medium term,
it’s a very bullish outlook for the gold industry. The
question is, how long are we going to supply it with
unprofitable
gold?”