🔍 The big theme: Rates, rates, and more rates.
After last week’s Fed-driven volatility, central banks stay firmly in the spotlight. The US will still matter, especially with delayed data, but this week the real action shifts overseas as Japan, Europe, and the UK all weigh interest rate decisions that could ripple through global markets.
👀 US data, slightly off schedule: Normally, the US jobs report drops on the first Friday of the month. Not this time. The October report was scrapped entirely due to the government shutdown, so November payrolls land Tuesday instead. That makes this week unusually dense for US macro watchers, with jobs, PMIs, retail sales, and inflation all packed together.
🎤 Central banks hog the mic: The Bank of England, European Central Bank, and Bank of Japan all meet this week, and each faces a very different decision.
✂️ UK: Markets expect the Bank of England to deliver its fourth rate cut in the past year, lowering rates by 25 basis points to 3.75%.
🏦 Europe: The ECB is expected to hold rates at 2% after already cutting eight times over the past two years.
📈 Japan: This is the wild card. Rates sit at 0.5%, and a hike is increasingly likely.
Before Japan’s decision, investors will closely watch the Tankan survey early in the week. It measures business sentiment, spending plans, profits, and employment. The Bank of Japan is especially focused on wage growth. Broad pay increases risk stoking inflation, which would strengthen the case for higher rates.
🌎 Why Japan matters more than it sounds: Japan’s low rates have made the yen a cheap funding source for the global carry trade. Investors borrow yen and plow that money into higher-yielding assets elsewhere. One rate hike alone probably does not unwind the trade, but history says it can get shaky fast. Economists also expect another hike next year, which would make the yen a more expensive funding currency and could pull the rug out from under carry trade strategies.
📅 Economic calendar highlights
Monday
- Japan Tankan business sentiment survey December
- Europe industrial production October
Tuesday
- UK employment November
- Europe PMI December
- US payrolls November
- US PMI December
Wednesday
- UK inflation November
- Europe inflation November
- US retail sales November
Thursday
- Japan interest rate decision
- UK interest rate decision
- Europe interest rate decision
- US inflation November
- Japan inflation November
Friday
- US home sales November
📈 Earnings watch, pre-holiday edition: Reports slow down as Christmas approaches, but a few notable names still step up:
Tuesday: Lennar $LEN
Wednesday: Micron Technology $MU, General Mills $GIS
Thursday: Nike $NKE, FedEx $FDX, KB Home $KBH, BlackBerry $BB, CarMax $KMX, Accenture $ACN, Cintas $CTAS, Birkenstock $BIRK
Friday: Carnival $CCL, Paychex $PAYX, Conagra Brands $CAG, Lamb Weston $LW
Bottom line: this is one of those weeks where rates, not earnings, do most of the talking.