This Week: US Inflation, major central bank decisions and China stimulus

• US CPI data may impact Fed’s interest rate strategy
   
• China stimulus hints could boost Chinese equity indexes
   
• ECB & SNB rate cuts might shift EURCHF to new lows
   
• Japan, EU, and UK key data could move regional markets

This coming week features a host of top-tier events, from major central bank decisions to the ever-important US inflation data which weighs heavily on the Fed’s decisions on interest rates.

Markets are also awaiting any hints of incoming economic support out of a top policymakers’ meeting in China.
 

This portends to potential market opportunities aplenty, across various asset classes, from major stock indexes in the US and China – the world’s two biggest economies, to European FX pairs such as EURCHF.

Events Watchlist:
 

• Wednesday, Dec 11th: US November consumer price index (US500 index)

Economists predict that the headline CPI, which measures inflation, rose 0.3% month-on-month, and 2.7% year-on-year – both at a slightly faster pace compared to the prior month.

Core inflation however is expected to match October’s numbers. A faster-than-expected uptick in inflation which slows down incoming Fed rate cuts could see a pullback in the US500 index which has been printing multiple record highs of late.
 

• Thursday, Dec 12th: China stimulus announcement? (CHINAH and CN50 stock indexes)

China’s leaders are set to hold their annual, two-day, closed-door Central Economic Work Conference starting Wednesday, with an eagerly awaited announcement expected Thursday.

Chinese equity bulls are bound to rejoice if the outlined priorities for 2025 suggest more economic stimulus is on the way, potentially sending the CHINAH and the CN50 towards testing their respective 50-day simple moving averages for immediate resistance.
 

• Thursday, Dec 12th: Rate decisions by European Central Bank and Swiss National Bank (EURCHF)

Markets widely expect both central banks to lower their respective interest rates by 25-basis points (bps) at this meeting, with a 45% chance of a larger SNB rate cut.

More importantly, traders and investors are eager to find out how many more cuts are due in the new year for either of these European central banks.

Markets predict a 70% chance of a further 75-bps in SNB rate cuts and 125-bps for the ECB by 3Q25 – hence EURCHF at year-to-date lows.

Given China’s struggling economy and looming Trump tariffs, if the ECB signals even more rate cuts in 2025 versus the SNB, then EURCHF could smash below the critical 0.930 support level.
 

Here’s a comprehensive list of other key economic data and events due this week:
 

Monday, December 9

• JP225 index: Japan 3Q GDP (final)
   
• CN50 index: China November CPI, PPI
   
• TWN index: Taiwan November trade balance
   
• MXN: Mexico November CPI
   

Tuesday, December 10

• CNH: China November trade balance
   
• AUD: Reserve Bank of Australia rate decision
   
• GER40 index: Germany November CPI (final)
   

Wednesday, December 11

• JPY: Japan November PPI
   
• CAD: Bank of Canada rate decision
   
• US500 index: US November CPI
   

Thursday, December 12

• AU200 index: Australia November unemployment
   
• CHINAH index: China stimulus announcement?
   
• CHF: Swiss National Bank rate decision
   
• EUR: European Central Bank rate decision
   
• USDInd: US initially weekly jobless claims; November PPI
   

Friday, December 13

• NZD: New Zealand November manufacturing PMI
   
• JPY: Japan October industrial production (final); 4Q Tankan index
   
• EU50 index: Eurozone October industrial production
   
• GBP: UK October monthly GDP, industrial production, trade balance