Today looks like the busiest day of the month as we have two central bank decisions and a couple of top US data releases. After today, we'll wrap up with the FOMC rate decision next Wednesday and then head into the lull of the Christmas holiday.
08:30 GMT – SNB Policy Decision
The market is pricing in a 57% probability of a 50 bps cut for the SNB. Inflation has been much lower than the central bank's forecasts and the strength of the Swiss Franc has not helped either. The new Chairman of the SNB Schlegel seems more confident than before negative levels indicated if necessary to reduce the appetite for the safe haven franc. This may have pushed the market to see higher chances of a 50 bps cut today.
Swiss National Bank
13:15 GMT/08:15 ET – ECB Policy Decision
The ECB is expected to cut interest rates by 25 bps bringing the policy rate to 3.00%. Market prices have been aggressive recently due to a string of weaker-than-expected economic releases, but most ECB officials pushed back against a 50 bps cut in December. After this week's cut, the market sees five more in 2025 which could be too much if things pick up next year.
European Central Bank
13:30 GMT/08:30 ET – US November PPI
US PPI Y/Y is expected at 2.6% vs. 2.4% before, and the M/M ratio is seen at 0.2% vs. 0.2% previously. The Core PPI Y/Y is expected to be 3.2% vs. 3.1% before, and the M/M figure is seen at 0.2% vs. 0.3% previously.
This report is unlikely to have much impact as the US CPI sealed the 25 bps cut next week. It does give us a better estimate of US Core PCE coming at the end of the month though.
Even if we get an upside surprise, market prices are likely to remain largely unchanged. If we get a nasty surprise though, we should see more of what we saw yesterday with the USD selling off and risk assets rallying.
US Core PPI YoY
13:30 GMT/08:30 ET – US jobless claims
US Jobless Claims remains one of the most important releases to follow each week as it is a more timely indicator of the state of the labor market.
Initial Applications remain within the 200K-260K range generated from 2022, while Continuing Applications continue to hover around the cycle levels.
This week sees Initial Claims at 220K vs. 224K previously, and Continuing Claims at 1875K vs. 1871K previously.
US unemployment claims
