Asian stocks fell along with U.S. and European equity futures, paring a sliver of the gains in a record month for global equities driven by optimism that coronavirus vaccines will aid the global economy. Oil retreated.
A gauge of Asian shares dropped the most in a month on Monday, with Japan, South Korea and Hong Kong posting some of the biggest equity-market declines. S&P 500 contracts began the week higher before slipping.
Chinese shares were more resilient as manufacturing sector activity picked up faster than expected in November. The central bank also unexpectedly injected funds into the financial system. China National Offshore Oil Corp. slumped after Reuters reported that it faces a U.S. blacklist.
Traders are set to return from last week’s holiday-shortened week to a bevy of new economic data on the labour market, as well as a handful of corporate earnings results.
The U.S. Labour Department’s November jobs report, due out on Friday, will be one of next week’s central reports — and one of the last comprehensive data releases on the labour market for 2020.
The path of the coronavirus outbreak has set the pace for the labour market’s recovery. And given November’s resurgence in case counts and hospitalisations, the job market has already showed renewed signs of trauma.
New unemployment claims, which are reported on a weekly rather than monthly basis, ended a month-long streak of declines and climbed again starting in mid-November. The upturn coincided with the timing of the Labour Department’s survey week for the monthly jobs report, suggesting more tepid improvements in November’s non-farm payroll gains and unemployment rate than in recent months.
To that point, Friday’s jobs report is expected to reflect a fifth straight month of slowing job growth, with consensus economists forecasting non-farm payroll gains of just 500,000 for the month after an increase of 638,000 in October. Most of the gains are expected to come from the private sector, and especially the service-providing industries hardest hit during the spring by initial lockdown orders due to the coronavirus pandemic. Government job losses that had weighed on October’s headline payroll figure due to a post-summer drop in temporary Census hiring likely abated during the month.
Investors now await congressional testimony by U.S. Federal Reserve Chairman Jerome Powell on Tuesday amid speculation of further policy action at its next meeting in mid-December.
EUROPE
Christmas markets, a cherished tradition in many European countries, have joined the long list of annual traditions that were cancelled or diminished this year because of the coronavirus pandemic. November saw many European countries impose partial or tougher lockdowns as new virus cases soared. The restrictions are either being retained or only partially loosened as of yesterday.
European markets are set to open lower Monday morning as global stocks pause for breath following a bumper month on the back of positive vaccine news.
Britain’s FTSE 100 is set to fall by around 43 points to 6,325, Germany’s DAX is expected to drop by around 97 points to 13,239 and France’s CAC 40 is seen around 36 points lower at 5,566.
European stocks are set for a mixed handover from Asia-Pacific. Talks between the U.K. and the European Union are heading into a “very significant” week, British Foreign Minister Dominic Raab said Sunday, with time running out for the two sides to iron out lingering disagreements over their post-Brexit trading relationship.
Meanwhile, investors will have one eye on this week’s meeting of OPEC and allies, led by Russia, with the group of major oil-producing countries set to decide on whether to extend large production cuts into 2021.
Oil-producing group OPEC, and its allies, will likely delay an output hike at its meeting today and tomorrow as it weighs positive vaccine news against new coronavirus lockdowns and resurgent shale drilling in the U.S.
Also, this week, the markets wait for releases and statements from Australia, the Fed and the latest NFP figures.
All these events and more have the potential to influence the markets which means there is plenty of trading opportunities.
Today’s High Impact Events
The times below are GMT+2.
Monday 30th November
All-Day – OPEC Meetings (2-Days)
16.45 – U.S. Chicago PMI
Potential instruments to Trade: USD Crosses.
17.00 – U.S. Pending Home Sales m/m
Potential instruments to Trade: USD Crosses.
Tuesday1st December
05.30 – Australia Cash Rate & RBA Rate Statement
Potential instruments to Trade: AUD Crosses.
11.30 – U.K. Final Manufacturing PMI
Potential instruments to Trade: GBP Crosses.
15.30 – Canada GDP m/m
Potential instruments to Trade: CAD Crosses.
17.00 – Fed Chair Powell Testifies
Potential instruments to Trade: USD Crosses & Gold.
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