OPEC+ to roll over, but not deepen, output cuts

Commodities prices were little changed this week. Prices were initially boosted by President Trump’s comments that the US and China were in the “final throes” of a trade deal. But they pared their gains as fears emerged that the signing into law of the Hong Kong Human Rights and Democracy act in the US would stand in the way of a trade deal. The mood in commodities markets could sour further in the coming weeks if the US goes ahead with the tariff hike on $156bn of Chinese goods on 15th December. That said, a raft of economic data releases may provide a welcome break from trade news next week. We expect manufacturing PMIs for China and the US ISM manufacturing Index (Monday) to hold broadly steady, which could reignite hopes that the downturn in industry is bottoming out. And with the GM strike now over, the US Employment Report (Friday) is likely to show a decent increase in non-farm payrolls. Otherwise, investors will be watching the OPEC+ ministerial meetings on Thursday and Friday. We expect the group to roll over its output cuts to the end of 2020. This would be unlikely to have a significant impact on prices. However, a decision to deepen output cuts would probably give a lift to the oil price.