U.S. Consumer Price Inflation (CPI)
What’s happening: November CPI data, due Wednesday, will be pivotal in shaping the Federal Reserve’s decisions ahead of its December policy meeting. The Fed has already cut rates by 75 basis points since September, with markets expecting another 25-bps cut this month.
Why it matters: Strong jobs data recently bolstered rate-cut expectations, but signs of persistent inflation may challenge this outlook. Additionally, the potential for inflationary pressure due to President-elect Donald Trump’s tariff plans could shift market dynamics.
European Central Bank (ECB) Policy Meeting
What’s happening: The ECB meets Thursday, with another 25-bps rate cut widely expected. This would mark its fourth rate cut of 2024, aiming to steer inflation toward the 2% target.
Why it matters: Updated growth and inflation forecasts will also be released, likely indicating subdued economic prospects for the Eurozone. Trade war concerns and a weakened euro add complexity to the ECB’s decision-making.
Bitcoin’s Record Rally
What’s happening: Bitcoin recently surged past $100,000 following announcements about pro-crypto leadership in key U.S. regulatory positions. This milestone has reignited discussions about Bitcoin’s potential mainstream adoption.
Why it matters: While some analysts forecast further gains, Bitcoin’s history of volatility raises caution about sustained growth. Regulatory clarity will remain a decisive factor.
Stock Market Momentum
What’s happening: U.S. equities have reached record highs, fueled by robust economic growth and rate-cut expectations. The S&P 500 and Nasdaq are testing new ceilings ahead of inflation data.
Why it matters: Hotter-than-expected inflation numbers could temper investor optimism and alter the Fed’s trajectory, challenging the stock market rally into year-end.
Oil Market Dynamics
What’s happening: Oil prices fell last week amid fears of weak demand, despite OPEC+ extending production cuts to 2026.
Why it matters: Geopolitical tensions in the Middle East and concerns about China’s sluggish recovery continue to drive oil market volatility.
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