There are several significant market drivers both locally and internationally this week. In addition to Australia's release of monthly and quarterly data, including an RBA meeting, investors must consider the US stock market surge, the health of the US economy, and its impact on interest rates and falling bond yields.
With record-breaking gold prices, declining oil prices, and renewed concerns about lithium prices, the week may pose more challenges than initially anticipated. Moreover, there's the forthcoming release of China's trade and inflation data.
Given investors' speculation about rate cuts next year (with April as a market tip, although most economists consider it too soon), the monthly US jobs data will continue to fuel the "rate cut looms" narrative. Most economists anticipate a rise in new job numbers in November's US employment data.
According to AMP's chief economist, Shane Oliver, the figures are likely to reveal payroll growth of 200,000, an unchanged unemployment rate of 3.9%, and a slowdown in average hourly earnings growth to 4% YoY (down from 4.1% annually).
Economists at Moody's also expect a slight increase in job growth for November, attributed to the payback from the impact of the United Auto Workers strike in October, rather than a resurgence in the labor market. In October, around 150,000 new jobs were created, lower than expected due to the UAW car industry strike, which led to a 35,000 decrease in employment in that industry. October's figure was roughly half of the restated 297,000 jobs created in September, and economists do not anticipate November's figure reaching that level.
The Bank of Canada is not expected to change interest rates on Wednesday and will maintain its familiar stance of taking action only if inflation becomes uncontrollable.
In the US, Dr. Oliver and Moody's anticipate a continuation of the downtrend in job openings and quits data for October (the JOLTS report), and the services sector activity survey for November is expected to remain around the 52 level (both due on Tuesday).
In Australia, the RBA is unlikely to alter interest rates at the upcoming meeting but will continue to threaten rate hikes if inflation surges. The GDP for the three months ending in September is forecasted to remain unchanged at 0.4% compared to the June quarter, with an annual rate ranging between 1.6% and 2%.
While corporate reports are expected to be scarce this week, there are two noteworthy shareholder meetings. Today, shareholders in Origin Energy will vote on a takeover offer from Brookfield of Canada and US group EIG, which appears likely to fail. On Friday, shareholders in OreCorp will convene to vote on a bid from Silvercorp of Canada, with local miner Perseus holding a 19.9% stake in OreCorp and ready to oppose the offer.