- European Central Bank (ECB):
- Expected fourth quarter-point rate cut on Thursday due to weakened eurozone sentiment after Trump’s election win and political turmoil in Germany and France.
- Rising inflation limits the scope for deeper cuts. ECB President Christine Lagarde likely to emphasize data-dependence.
- Global Central Banks:
- Australia: Reserve Bank meeting Tuesday. Persistent inflation makes rate cuts unlikely despite economic weakness.
- Canada: Bank of Canada may deliver a 25-50 bps cut on Dec. 11, with inflation easing.
- Switzerland: Swiss National Bank expected to cut by 50 bps on Dec. 12, with inflation at 0.7%.
- U.S. Inflation Data:
- November’s inflation report on Wednesday will guide Federal Reserve policy.
- Fed has cut 75 bps since September, with markets eyeing another 25 bps cut in December.
- Strong inflation data could slow future cuts, potentially triggering bond sell-offs and dollar strength.
- Bitcoin’s $100,000 Milestone:
- Bitcoin surged past $100K after Trump announced crypto-friendly policies, including appointing Paul Atkins as SEC head.
- While optimism for further gains ($150K by 2025) grows, Bitcoin is currently overbought, raising caution over potential reversals.
- Brazil’s Central Bank:
- Final meeting under Governor Roberto Campos Neto on Wednesday, with a 75 bps rate hike anticipated, bringing rates to 12%.
- Inflationary pressures persist as the real weakens 20% YTD and markets react to fiscal package disappointments.
Key Takeaways:
- Central banks are navigating contrasting paths, with the ECB and Swiss National Bank cutting rates, while Brazil tightens policy.
- Bitcoin’s milestone fuels optimism but warrants caution due to historical volatility.
- U.S. inflation and Fed decisions remain pivotal for global markets.
- Political turmoil in Europe and South Korea adds uncertainty, while Brazil’s fiscal challenges could shift regional dynamics.
