The Most Important Volatility Events You Need to Pay Attention to In December


By: Spencer Israel

We’ve arrived at the final month of the decade. But before you check out for the holidays, there are a few events that will be high on the market’s radar over the next few weeks—specifically, economic events.

After a relatively quiet November, the economic calendar picks up in earnest in December with a number of high-profile meetings and events to go along with the running tap of regular economic data points.

These are the biggest volatility events macro traders need to be aware of this month.

December 5-6: OPEC Meeting

This marks the final meeting of the year for OPEC and the other oil-producing countries, known as OPEC Plus. As we wrote about in November, the global oil market is anxiously awaiting to hear whether the cartel will enact more extensive supply cuts to boost the price of oil. The current production cut deal ends in March, though reports indicate that further cuts are forthcoming, at least through mid-2020.

Adding some spice to the meeting will also be the upcoming Saudi Aramco IPO, which has fueled speculation that the market will seek to boost the price of oil. Light sweet crude oil futures have steadily risen about 14% since making the low of the move on Oct. 3. Oil traders should expect added volatility during the meeting.

December 6: The Jobs Number

November’s Employment Situation Summary is due out at 8:30 am ET on the first Friday of the month. The market will hope to see the economy build off of October’s report in which 128,000 jobs were added—far exceeding the 75,000 consensus estimate from economists—and big revisions upward were made to August and September figures as well.

The unemployment rate will likely remain steady around 3.6%, where it has remained for much of the year.

December 10-11: FOMC

The final Federal Open Markets Committee meeting gets underway on Dec. 10, and the market will be anxiously awaiting further commentary from Chairman Jerome Powell when he addresses reporters Wednesday at 2:30 ET.

Currently, it’s all but assured that the Fed will keep interest rates unchanged heading into 2020. The CME’s FedWatch Tool, which tracks activity in the Fed Funds Futures, has a 94.8% probability of rates staying between 1.75-2%. For his part, Powell will likely try to get through the press conference without causing further confusion in the market. His messaging has previously come under fire this year, as the Fed has lowered interest rates for the first time since 2007.

December 15: U.S.-China Tariff Deadline

Back in August, President Trump announced that the latest round of tariffs on Chinese goods that were supposed to go into effect in September would, in fact, be delayed until December as the two sides attempted to make progress on a deal. That deadline is nearly upon us. While there will almost certainly be more announcements from both sides before then, there is likely to be added volatility in stock index futures when the futures market opens on Sunday night, the evening of the deadline.

December 20: Quad witch

Quadruple witches, the simultaneous expiration of stock index futures, stock index options, stock options, and single stock futures, typically coincide with added volatility, especially around the market close. Traders should be extra aware of the December quad witch, as it’s essentially the final volatility event of 2019.

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