Week Ahead: Key Central Bank Meetings & Economic Data

Week Ahead: Key Central Bank Meetings & Economic Data
- US Dollar and Yields: The US dollar gained against most major currencies, but the Swiss franc held steady. The US 10-year yield decreased to around 4.16%, and the two-year yield also dropped. The Dollar Index rose by 2%. Bitcoin surged above $100k.
- Central Bank Meetings:
- Brazil: Likely to hike interest rates by 75 basis points, bringing the Selic rate to 12%.
- Bank of Canada: Could cut rates by 50 basis points, influenced by higher unemployment.
- European Central Bank (ECB): Expected to cut rates by 25 basis points.
- Swiss National Bank (SNB): Likely to cut rates, but may proceed cautiously due to the already high deposit rate.
- US CPI Report: Expected to rise, which could influence Fed policy. The market expects an 85% chance of a Fed rate cut in the near future.
- US Dollar Index: Fell after strong jobs data but regained some ground. Key support levels at 105.40 and resistance around 106.20-40.
- Eurozone: ECB faces challenges, with inflation data and the global economy influencing their decisions. A 50 basis point rate cut is less likely now, but a 25 basis point move is expected.
- Canada: Bank of Canada may cut rates again due to rising unemployment and slowing wage growth. The CAD is facing pressure, and the US dollar is at a 4-year high against it.
- Australia: The Reserve Bank of Australia is expected to remain on hold, with no rate cuts expected until April. Job growth has been strong, but unemployment ticked up to 4.1%.
- China: China’s bond yields are now lower than Japan’s, and the yuan weakened slightly. Trade and lending data will be released, showing a growing trade surplus.
- Japan: The Bank of Japan may hike rates if economic data supports it, and a new supplemental budget will be discussed.
- UK: The Bank of England is unlikely to change rates based on October's GDP data, with a stronger chance of a rate cut in February.
- Mexico: CPI data on December 12 may signal the path for another rate cut by the Bank of Mexico.
- Brazil: The Brazilian real weakened, and the central bank is expected to hike rates by 75 basis points to address inflation.