Asian stock indexes are mixed but mostly higher on Monday morning in reaction to last Friday’s strong U.S. non-farm payroll report that sent European and U.S. stock indexes surging higher even as the robust job gains also increased the chances of a rate hike during the Fed’s next 2 day policy meeting next week from December 15-16th.
Last Thursday the European Central Bank (ECB) extended its quantitative easing program by 6 months “or beyond” while it cut its overnight deposit rate further into negative territory by 10 additional basis points to -.30 percent.
On Friday OPEC maintained its current level of oil production output with no production cuts and lingering questions persisting about how much extra oil will soon flood the market once sanctions are lifted on Iran and the oil rich nation with large oil deposits is allowed to sell oil on the international market.
“The last big shoe there is how much oil are the Iranians going to put in the market. Because it is clear that there’s not going to be a discussion about any kind of OPEC action until one knows how much the Iranians and the Iranians we think you know its 400-600,000 barrels per day, the Iranian oil minister said it could be a 1,000,000 barrels per day. And whatever it is… that’s the question that has to be answered” said Daniel Yergin, IHC Vice Chair, on Bloomberg TV last Friday.
Currently, NYMEX Jan 2016 crude futures are trading below $40 a barrel at $39.59 (-.95 percent).
As the holiday season unfolds this week, investors will be paying close attention to retail sales data from November that will be reported on Friday.
Economists from briefing.com are forecasting a 0.2 percent increase in retail sales for November after a 0.1 percent increase in October.
Friday will also see another inflation reading with the Producer Price Index (PPI) and Core PPI for November.
Briefing.com forecasts a -0.1 percent contraction with PPI in November, up from -0.4 percent in October, while Core PPI is expected to rise to 0.1 percent and move above the -o.3 percent drop in October.
Full Economic Calendar
Monday- Consumer Credit (October)
Tuesday- JOLTS- Jobs Opening (October)
Wednesday- MBA Mortgage Index (12/05), Wholesale Inventories (October), Crude Inventories (12/05)
Thursday- Initial and Continuing Jobless Claims, Export/Import Prices (November), Treasury Budget (November), Natural Gas Inventories
Friday- Retail Sales (November), Business Inventories (October), Michigan Sentiment (December)