World Week Ahead: Yellen, ECB, OPEC

A speech by Federal Reserve chairwoman Janet Yellen as well as the latest US jobs data will draw the focus this week to bets policymakers 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," Atlantic Trust Private Wealth Management chief investment officer David Donabedian told Bloomberg.

Meanwhile, eyes will also be squarely on the European Central Bank meeting on Thursday, as euro-zone policymakers 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 (OPEC) will garner attention as oil prices continue to suffer from a global excess of supply, with Brent crude at $US44.86 a barrel on Friday and West Texas Intermediate at $US41.71 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.

Ms 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 as well. 

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% 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 the Standard & Poor's 500 Index inched 0.04 % higher.

Meanwhile Europe's Stoxx 600 Index added 0.5% 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%, from -0.2%, it will increase its monthly asset purchase programme to €75 billion per month, from €60 billion, and extend the programme 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.

"Mr Draghi has over-delivered 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 Mark Bristow told Bloomberg.

"The more we continue to produce unprofitable gold, the more pressure we put on the gold price," according to Mr 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?"

(BusinessDesk)