The U.S. non-farm payroll data for November exceeded expectations, but its strength is not high enough to dispel the possibility of the Federal Reserve cutting interest rates again later this month. Current market estimates for a 25 basis point rate cut in December have risen to about 90%. Meanwhile, many Federal Reserve officials tend to take a cautious approach to rate cuts.
In the coming week, U.S. inflation data will be the only potential key factor that could change the Federal Reserve's December rate cut expectations. Given that data indicates the U.S. labor market remains strong but is showing signs of slowing, there is a greater likelihood that Federal Reserve officials will cut rates this month; however, discussions about whether to pause rate cuts next year are also on the agenda. Policymakers speaking before the Federal Reserve's quiet period generally believe that interest rates will continue to trend downward, but they will maintain caution regarding the pace of rate cuts. Here are the key market focuses for the new week:
Monday 9:30, China November CPI year-on-year;
Monday 23:00, U.S. October wholesale sales month-on-month;
Tuesday 0:00, U.S. November New York Fed 1-year inflation expectations;
Wednesday 21:30, U.S. November CPI and core CPI;
Thursday 21:30, U.S. initial jobless claims for the week ending December 7, U.S. November PPI year-on-year, month-on-month;
Friday 1:00, Federal Reserve releases Q3 2024 account funding flows;
Friday 21:30, U.S. November import price index month-on-month.