Inflation data from the US, Eurozone and Switzerland coupled with employment data from the US and Canada as well as Q3 GDP from Australia and ISM PMI data will highlight the first week of last month in 2025.
USD
President Trump stated he had a “very good telephone call” with China’s President Xi. After the call he described the U.S.–China relationship as extremely strong and added that President Xi invited him to visit Beijing in April which he Trump accepted. New 19-point peace proposal for ending Ukraine – Russia war. Kevin Hasett, current economic advisor, is currently seen as a front runner for the next Fed Chairman. He is the most dovish candidate.
Bureau of Economic Analysis (BEA) stated that advanced reading of Q3 GDP advance estimate has been cancelled. The second estimate is rescheduled but there is no date yet when it will be published. The BEA added that they will release US PCE and personal income report for September on December 5. Weekly ADP employment change saw economy lose 13500 jobs per week in the four week period ending November 8, continuation of weakness as the report last week showed economy losing 2500 jobs per week.
September retail sales rose 0.2% m/m vs 0.4% m/m as expected and down from 0.6% m/m increase in August. Control group, excluding volatile components and feeding into GDP calculation, printed a drop of 0.1% m/m vs 0.3% m/m as expected. Weakness was seen in both ex autos and ex autos and gas categories which rose by just 0.3% m/m and 0.1% m/m respectively.
The yield on a 10y Treasury started the week at 4.07%, rose to 4.07% and finished the week at around 4.02%. The yield on 2y Treasury started the week at 3.52%, rose to 3.53% and finished the week at around 3.47%. Spread between 2y and 10y Treasuries started the week at 54bp and finished the week at 55bp. FedWatchTool sees the probability of a 25bp rate cut at December meeting at around 85% while probability of no change is at around 15%. Silver broke above $55 reaching new all time high in the thin market conditions on Friday.
This week we will have ISM PMI, ADP employment and PCE data.
Important news for USD:
Monday:
ISM Manufacturing PMI
Wednesday:
ADP Employment Change
ISM Services PMI
Friday:
PCE
EUR
Prices for European natural gas dropped below €30/mwh for the first time since May 2024. This is a very welcoming news for European industry as lower energy prices will help their profit margins which in turn may give EUR some push. Final Q3 GDP from Germany came in unchanged, flat q/q and 0.3% y/y. German economy recorded positive growth in only two quarters in the past three years. Private consumption and net trade deducted from the GDP with former falling 0.3% q/q while government consumption and investment added to the reading. Final Q3 GDP from France was revised up to show 0.5% q/q and 0.9% y/y growth from 0.3% q/q and 0.7% y/y as preliminary reported. Growth was seen in both domestic and foreign demand as economy printed healthy growth in gross fixed capital formation and government spending. Household consumption also contributed positively.
Preliminary November CPI data from Germany and France were unchanged at 2.3% y/y and 0.9% y/y respectively while markets were expecting a tick up to 2.4% y/y and 1% y/y. On a monthly basis inflation declined by 0.2% in Germany and 0.1% in France. Italian inflation also came in unchanged at 1.2% y/y with markets expecting tick up to 1.3% y/y. Spanish inflation ticked down to 3% y/y but markets were bracing for a bigger decline to 2.9% y/y. With price pressures subsiding and coming in weaker than expected, combined with some dovish talks seen in ECB minutes from the November meeting, we can seee chances for a December cut increasing.
This week we will have preliminary CPI data which could print targeted 2%.
Important news for EUR:
Tuesday:
CPI
GBP
UK Autumn Budget was revealed and it was leaked first as we got data from OBR before Chancellor Reeves spoke unveiled it in Parliament. The budget shows headroom, the margin for error surrounding the government’s main fiscal rule to balance day-to-day spending with tax revenues by 2029, has increased to £22bn, from £9bn in the spring. Tax hikes will add additional £26bn/year in revenue by 2029/30, however all of it will be pushed further down the line, back-loaded, so almost none of these funds will come in 2026. Public Sector Net Borrowing will be reduced in the coming year and the composition will see shortening of duration, more shorter-term borrowing, which helped bring down yield on 30y Gilts. Support for second child has been scraped in an effort to lower spending with income-tax was freezing until 2031 thus pushing more people into higher tax bands as inflation increases nominal income.
AUD
Inflation report for the month of October saw headline number flat m/m vs -0.2% m/m as expected and 3.8% y/y vs 3.6% y/y as expected. Trimmed mean, core inflation measure, printed very hot 3.3% y/y vs 2.9% y/y as expected. Australian Bureau of Statistics stated that monthly inflation data overtook quarterly inflation data in importance. As a reminder, RBA targets inflation in 2-3% range. With hotter than expected numbers small chances of RBA cut have been diminished further and AUD benefited as a result. Q3 CAPEX surged to 6.4% q/q vs 0.5% q/q as expected with plant and machinery CAPEX leading the way (11.5% q/q). This marks the highest growth in CAPEX since 2012!
This week we will get Q3 GDP data.
Important news for AUD:
Wednesday:
GDP
NZD
RBNZ has delivered a widely expected 25bp rate cut thus bringing the Official Cash Rate (OCR) down to 2.25%. This makes it a total of 325bp in cuts since August of 2024. New OCR projections see it staying at 2.25% in March of 2026 and rising to 2.28% in December of 2026 indicating basically no change to OCR next year. There was a discussion whether to keep OCR unchanged at 2.50% or to lower it to 2.25% and latter prevailed, one member voted to keep rate steady, citing significant excess capacity in the economy which suggest that further easing is needed. Inflation increased to the top of the range in Q3 but is expected to slowdown to around 2% by mid-2026. Risks to the inflation outlook are seen as broadly balanced. Inflation and growth outlook for the medium-term will be the main determining factors for future moves in the OCR.
RBNZ governor Hawkesby stated that risks are balanced and that bank is in good position to mitigate any risks. He clarified that all projections are based on no change to OCR in 2026 as current cash rate is supportive and stimulatory. He finished by saying that they remain flexible on rate and that every option is possible, as it will depend on developing inflation and growth outlook. This is the last meeting headed by Hawkesby as Anna Breman will take the helm of the RBNZ on December 1. The next RBNZ meeting is not until February 2026.
Retail sales knocked it out of park in Q3 as they rose 1.9% q/q and 4.5% y/y, much stronger than 0.5% q/q and 2.3% y/y growth seen in Q2. Business confidence also had a great improvement as it printed 67.1% in November, up from 58.1 seen in October thus making it the highest reading in eleven years! Massive cuts from RBNZ gave positive results as seen in retail sales and business confidence and these improvements are one of the reasons the bank opted to pause deliver last rate cut of this rate cutting cycle.
CAD
Q3 GDP printed staggering 2.6% annualised vs 0.5% as expected and up from -1.8% seen in Q2. The big rebound was headed by huge drop in imports while exports rose. Gross fixed capital formation also positively contributed to the print as it was led by the surge in government capital spending. Household and government spending declined on the quarter. Big positive surprise gave boost to CAD but with details being concerning, drop in household spending and almost all of the gains from drop in imports, we may see CAD losing strength.
This week we will have employment data.
Important news for CAD:
Friday:
Employment Change
Unemployment Rate
JPY
Tokyo area inflation data for the month of November saw headline number tick down to 2.7% y/y from 2.8% y/y as expected while ex energy and ex fresh food, energy components came in unchanged at 2.8% y/y with markets expecting them to also tick down to 2.7% y/y. A slew of data was released on Friday and showed October unemployment rate stay at 2.6% while consumer came in stronger as retail sales, for the same month, smashed expectations and grew by 1.6% m/m and 1.7% y/y.
CHF
SNB total sight deposits for the week ending November 21 came in at CHF460.2bn vs CHF456.5bn the previous week. A slight turn up after six weeks of declines, but nothing out of the well-established range. SNB President Schlegel reiterated bank’s stance that it is appropriate to keep rates low, near zero, and that the bar for lowering rates into negative territory is high. He added that although inflation is at the lower bound of their 0-2% target range it is expected to pick up in coming quarters. Additionally, he stated that preliminary deal with the US on lower tariffs will provide much needed relief to exporters and boost their output. Final Q3 GDP reading confirmed that economy declined by 0.5% q/q and managed a 0.8% y/y growth.
This week we will have inflation data.
Important news for CHF:
Wednesday:
CPI
