The market will be looking for reassurance regarding the start and pace of the Fed's tightening cycle while waiting for the FOMC meeting on December 16. Fed futures are assigning a 74% probability of a rate hike in December and data this week could provide clues about the start and speed of future increases. The week will be packed with Fed speak, as FOMC members Evans (Tuesday), Lockhart and Williams (Wednesday) will talk about the state of the US economy while Vice Chair Fischer will deliver a speech on financial stability (Thursday). The market will pay particular attention to Chair Yellen's testimony before Congress on Thursday, as it focuses on the economic outlook.

The employment report on Friday is the last major data release before the FOMC meeting. Nonfarm payrolls are expected to increase 200k (as consensus), the unemployment rate to fall one-tenth to 4.9% and average hourly earnings to be up 0.1% m/m. A solid print should confirm the start of policy normalization in December. 

Other data releases this week include November's Chicago PMI (forecast 54 vs 56.2 previous), ISM Manufacturing (forecast 50.5 vs 50.1 prev.) and final readings for PMI and durable orders. The USD should continue its upward trend this week, as the ECB is expected to deliver further easing, Fed speak to support policy tightening and a solid job report and other data to confirm the strength of the US economy.