Take Five: Dark December
1/MORE PITFALLS It has been a year many would prefer to forget and a month of 2020 still remains -- one replete with events that could trip up markets. Here they are: Dec. 1: A month before the UK-EU transition deal ends
It has been a year many would prefer to forget and a month of 2020 still remains -- one replete with events that could trip up markets. Here they are:
Dec. 1: A month before the UK-EU transition deal ends.
Dec. 8: Deadline to complete U.S. state-level vote recounts and court contests over the election.
Dec. 10: European Central Bank meets and should increase emergency stimulus.
Dec. 11: U.S. government funding lapses unless lawmakers agree a 12-bill spending package.
Dec. 10-11: EU council meeting. Issues are Brexit and the risk that Poland and Hungary will scupper an EU stimulus spending plan.
Dec. 14: The U.S. electoral college votes, with the risk that some "faithless" electors break the rule requiring them to vote in line with the popular vote.
Dec. 15-16 - U.S. Federal Reserve meets. Will it expand bond-buying or signal a yield cap?
Dec. 28: European Parliament could vote on any Brexit deal.
Sterling rollercoaster https://fingfx.thomsonreuters.com/gfx/mkt/bdwvklmajpm/gbp.PNG
An explosion in new COVID-19 infections and business restrictions have been undermining the U.S. labour market recovery so Friday's November payrolls figures will be closely watched.
Last month saw 638,000 new jobs amid signs the economy was healing from the pandemic-induced downturn. But it was the smallest gain since the jobs recovery started in May and left employment 10.1 million below its February peak.
November is likely to be the seventh straight month of jobs gains, but expectations are that only 520,000 jobs were added.
U.S. Non-farm payrolls https://fingfx.thomsonreuters.com/gfx/mkt/dgkplakbdvb/Pasted%20image%201606237053920.png
OPEC and its allies had been due to raise oil output by 2 million barrels per day (bpd) from January to ease the record supply cuts that were implemented as crude prices slumped earlier in 2020.
But when the group -- known as OPEC+ -- meets on Nov. 30-Dec. 1, it is expected to delay those output increase plans by at least three months.
While crude futures have rallied to eight-month highs near $50 a barrel, OPEC+ is reportedly still considering delaying the increase because rising Libyan production and continued restrictions on movement are seen capping energy prices.
Sources tell Reuters a rollover of current 7.7 million bpd curbs until end-Q1 has support within the group. Analysts seem to agree -- most reckon a rollover of at least three months is necessary to bring down high oil inventory levels.
OPEC Demand Forecast https://fingfx.thomsonreuters.com/gfx/ce/nmovadwkgpa/OPEC%20Demand%20forecast.PNG
4/OPULENCE IN JAPAN
Japanese trend-setters are protecting themselves against COVID-19 with diamond and pearl-studded masks. Prime Minister Yoshihide Suga's ruling party will spend big too, draft budget plans due to be presented to parliament show.
The draft contains plans for green investment and extended subsidies for households and businesses.
Upcoming data will show what impact previous stimulus packages of 234 trillion yen had. We could see an expansion in factory output and possibly the first signs of retail sales growth.
Japan GDP & debt https://fingfx.thomsonreuters.com/gfx/mkt/xegpbqgklvq/Pasted%20image%201606456059041.png
5/ NO RELIEF
Euro zone consumer prices are likely to have fallen further in November -- a 0.3% year-on-year drop is expected from Tuesday's "flash" reading.
The numbers won't surprise the ECB, which expects inflation to average -0.2% year-on-year in Q4. But a fourth straight month of negative price growth may not sit well -- ECB chief economist Philip Lane warned recently against tolerating low inflation.
And while a COVID-19 vaccine may lift growth prospects, it may not do much for inflation -- inflation-adjusted bond yields remain deeply negative. The data will only reinforce the need for more stimulus and that will come in December, with the ECB seen expanding bond-buying and cheap loans for banks.
No inflation relief for the ECB https://fingfx.thomsonreuters.com/gfx/mkt/jbyvrearlpe/themeinflation2711.PNG
(Reporting by Sujata Rao, Dhara Ranasinghe and Ahmad Ghaddar in London; Saqib Iqbal Ahmed in New York and Vidya Ranganathan in Singapore; Compiled by Sujata Rao; Editing by Catherine Evans)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.