US dollar retreated on profit-taking and as the market awaits the US employment report for November. The DXY index slipped -0.64% to 100.84 at the time of writing this report. Crude oil prices remained under pressure with both benchmarks slipping almost -0.4% so far today. The market is worried about the outcome of the OPEC meeting in Vienna later this week. Indeed, we have been less optimistic than the market. We expect lack of compliance as usual by OPEC members even if an output cut/freeze cut can be reached. We have a light calendar today. In Europe, the ECB would release its money and credit aggregates for October while Italy will report that business and consumer confidence indices for November. Moreover, the OECD will release its latest assessment of the global economic outlook.
For the week ahead, the focus is on OPEC's formal meeting in Vienna this Wednesday and the release of US non-farm payrolls on Friday. For the former, uncertainty remains high. The latest news is that while some members, such as Algeria and Venezuela, seek to reach a deal to output cut, Saudi Arabia has recently suggested that a rate cut might not be needed as demand should recover next year. Khalid Al-Falih, the Kingdom's oil minister indicated that with oil demand expected to "recover in 2017, then prices will stabilize, and this will happen without an intervention from OPEC". Regarding the cancellation of the pre-meeting discussion originally scheduled on Monday, he noted that "it's not beneficial to attend the meeting with producers from outside OPEC before holding meetings within OPEC and deciding whether to cut or continue with current levels of production". In the meantime, Algeria and Venezuela continue to seek support from Russia with energy ministers of both countries will meet in Algiers and then travel to Moscow on Monday.
Concerning the US employment report, non-farm payrolls probably increased +170K in November, after a +161K addition a month ago. The unemployment rate might have stayed unchanged 4.9%. Meanwhile, average hourly earnings probably increased +0.3%, in turn lifting the annual growth by one-tenth. Ahead of it would be Wednesday's ADP report. It is expected that the number of employment rose +160K in November, up from a +147K addition in the prior month.
Elsewhere, China would release its PMI indices on Thursday. The official manufacturing PMI probably slipped to 51 in November form 51.2 a month ago. Caixin's PMI manufacturing index probably has dropped -0.3 point to 50.9 for the month. Europe would also release a number of PMI data Thursday. The manufacturing PMI for the Eurozone probably stayed unrevised at 53.7, while that the for UK might have edged +0.1 point higher to 54.4.