(Reuters) – breaking the $100,000 barrier raising expectations that the cryptocurrency will go mainstream, US inflation data will show how much pressure the Fed is under to adjust rates and central banks in Europe, Australia and Brazil meet.
Here's what's next from Marcela Ayres in Brasilia, Kevin Buckland in Tokyo, Ira Iosebashvili in New York, and Dhara Ranasinghe and Amanda Cooper in London.
1/ FOUR, AND COUNTING
For the ECB's policy makers, their last meeting in October must seem like a long time ago.
Since then, Donald Trump's US election win means the eurozone is facing renewed economic pain with tariffs likely, and governments in hard-pressed Germany and France have collapsed, with a second political crisis involved in six months. All that dealt with a blow of sentiment in a block where business activity is going down – and the euro has slipped.
The ECB, no stranger to tough times, is expected to deliver its fourth quarter rate cut on Thursday, with further cuts expected.
Rising inflation means a further rate cut is unlikely. And yes, you guessed it, the head of the ECB, Christine Lagarde, is likely to emphasize caution and data dependence.
2/ TO CUT AND PLACE HARD
Australia's central bank, which meets on Tuesday, is in a tight spot. The economy is sputtering, the currency is at four-month lows and yet inflation is stable enough to make rate cuts unlikely.
The odds of a quarter-point cut are below 15% and rates until July are expected to fall by as much as 50 bps.
In contrast, the Bank of Canada appears poised to respond to investors' appetites for more cuts. He has said inflation is a thing of the past and further cuts could be in the offing, leaving the market divided over whether his December 11 meeting will result in a 25- or even 50-bps cut .
Enter the worst of the G10 central banks – the Swiss National Bank. With inflation at 0.7%, rates are expected to be cut by 50 bps on December 12.
3/ NO HURRY
Markets will play out the path for Federal Reserve policy in the coming months given Wednesday's US inflation reading. The Fed has cut interest rates by 75 basis points (bps) since September, after months of cooling inflation – another 25 bps cut is expected later in December.
But the way forward is not so clear. The economy has been stronger than expected, and Fed Chairman Jerome Powell has said that there is little reason to rush the pace of cuts.
A strong number could bolster that outlook, potentially reigniting bond sales and strengthening the dollar if investors decide to take out more bets on what the Fed will cut next – year. Economists polled by Reuters expect consumer prices to have risen 0.2% in November – in line with October's increase.
4/ BITCOIN FLAG
There was something inevitable in Bitcoin's record rise past $100,000 after Trump's election promised to make America the “crypto capital of the planet”.
But he did so in true fashion, moving from a low of $99,000 to as high as $103,619 in two hours before he breathed his last. The catalyst may have been confirmation of Trump's selection of crypto veteran Paul Atkins to run the SEC. Of course, $100,000 is just a number — but one that is faithfully and dubious as an important milestone in Bitcoin's 16-year journey to legitimacy.
Remember though that its history is written in breathless rallies and white-knuckle revolutions. While numbers like $150,000 are already being mentioned for 2025, the token is flashing too much on daily, weekly, monthly and quarterly charts.
5/ THE FINAL ACT
Brazil's central bank holds its last meeting under Governor Roberto Campos Neto on Wednesday, betting on a sharper 75 bps hike after two hikes that brought rates to 11.25%.
Campos Neto, who is to hold a press conference on December 19, said that a positive fiscal shock could relieve pressure on the exchange rate and long-term output in Latin America's largest economy. But the government's widely expected fiscal package disappointed markets, raising risk premiums on key assets.
Brazil's real has weakened about 20% against the dollar year to date, and strong economic resilience – seen in the third quarter – is dampening inflation concerns. As policymakers grapple with mounting challenges, Congress debates measures to curb spending and contain debt growth.
(Graphics by Sumanta Sen, Kripa Jayaram and Prinz Magtulis, Compiled by Karin Strohecker, Editing by Barbara Lewis (JO:))
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