Five things to know before the market trades this week, Dec 1-7

Mario Draghi, President of the European Central Bank (ECB). -- PHOTO: REUTERS 
Mario Draghi, President of the European Central Bank (ECB). -- PHOTO: REUTERS 

1. To QE or not to QE? That is the question for ECB chief Mario Draghi

All eyes will be on Mr Drahgi this when he holds the European Central Bank's press conference on Thursday following its monthly policy meeting and rate decision earlier in the day.

Two weeks ago Mr Draghi pledged the ECB stood ready to launch major stimulus action if euro zone inflation failed to show signs of quickly returning to the bank's target. Data last Friday showed that inflation in the bloc was back to a five-year low, putting more pressure on Mr Draghi to take action.

Still, analysts do not expect the ECB chief to move on quantitative easing (QE) yet. The consensus is that Mr Draghi will wait for the first quarter of next year to decide whether to take the leap to government bond-buying.

2. How low can oil go?

Crude oil prices have plunged more than 10 per cent since last Thursday to levels not seen in more than five years after OPEC decided to leave its production levels unchanged, heightening fears of a global glut.

Gulf stock markets on Sunday plunged to milestone lows in a panic sell-off. As Reuters put it, besides adding to Draghi's headaches as it pushes inflation in Europe even lower, the plunge in oil prices is also hurting the economies and currencies of producer countries - and not just the poorer ones like Venezuela, Iran, and Algeria.

Closer home, sliding oil prices are hitting the shares of Singapore-listed companies involved in the oil and gas industry including blue chips like Keppel Corporation and Sembcorp Marine.

3. Gold's Opec moment

Swiss voters on Sunday overwhelmingly rejected a plan to force the Swiss National Bank to buy thousands of tonnes of gold so as to hold 20 per cent of its reserves in gold, more than double its current 7.5 per cent.

The vote was a blow to the right-wing Swiss People's Party, which launched the "Save Our Swiss Gold" campaign in a reactionary backlash against the SNB accumulating hundreds of billions of depreciating euros.

Analysts say gold prices will likely drop sharply following the "No" vote but the reaction will likely be short-lived and a mild trend higher for gold prices will continue.

4. Jobs for the US

Friday's monthly job report from the Labor Department will be the key data for the US this week. Non-farm payrolls are expected to show an increase of 228,000 in November, according to a Reuters poll.

A month ago data for October showed the US jobless rate fell to a six-year low, underscoring the US economy's resilience in the face of slowing global demand. Wage growth remained tepid, though, suggesting little need for the Federal Reserve to hurry to start lifting interest rates.

5. China data

The official manufacturing purchasing managers'index is likely to show on Monday that manufacturing slowed slightly in November as demand remained sluggish, a Reuters poll showed.

However, a central bank adviser said last Tuesday that China's central bank will wait until fourth-quarter economic data is out and monitor U.S. and Japanese monetary policy before considering any more rate cuts or easing.