"Markets continue to price roughly a 75% probability that the Fed will keep rates unchanged at its January meeting. Attention now turns to Thursday's inflation data, which is expected to show broadly stable price pressures. An upside surprise could further support the dollar and yields, while any deceleration would likely revive expectations for earlier or deeper easing, weighing on both."
"Beyond the US, a busy slate of global central bank decisions looms. The European Central Bank is expected to hold rates steady, the Bank of England is likely to deliver a rate cut following the Fed's recent easing move, while the Bank of Japan is anticipated to raise rates to their highest level in decades, a divergence that could inject additional volatility into currency and bond markets toward the end of the week."
The U.S. dollar strengthened as Treasury yields rose across the curve. U.S. payrolls increased by 64,000 in November versus forecasts of 50,000, while October payrolls were sharply revised down and the unemployment rate rose to 4.6%, the highest since 2021, revealing lingering labour-market fragilities. Weekly ADP data showed private employers added an average of 16,250 jobs in the four weeks to November 29, suggesting a tentative hiring rebound amid distortions from a 43-day government shutdown. Markets price roughly a 75% chance of unchanged Fed rates in January ahead of inflation data that could sway yields and the dollar. Global central bank divergence may add volatility.
Read at London Business News | Londonlovesbusiness.com
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