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Daily Pivots: (S1) 1.3752; (P) 1.3773; (R1) 1.3793; More...

Intraday bias in USD/CAD stays mildly on the downside for the moment. Sustained trading below 61.8% retracement of 1.3538 to 1.4139 at 1.3768 will argue that whole decline form 1.4791 might be ready to resume and targets a retest on 1.3538 low. On the upside, however, break of 1.3870 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound.

In the bigger picture, current development suggests that price actions from 1.4791 is developing into a deeper, larger scale correction. In the less bearish case, it's just correcting the rise from 1.2005 (2021 low). But even so, break of 1.3538 will pave the way to 61.8% projection of 1.4791 to 1.3538 from 1.4139 at 1.3365. This will remain the favored case as long as 1.4139 resistance holds, in case of rebound.

Daily Pivots: (S1) 0.8763; (P) 0.8777; (R1) 0.8794; More…

Intraday bias in EUR/GBP stays neutral at this point. With 0.8800 resistance intact, further decline is mildly in favor. Below 0.8720 will target 0.8631 cluster (38.2% retracement of 0.8221 to 0.8663 at 0.8618). However, break of 0.8800 will turn bias back to the upside for retesting 0.8863.

In the bigger picture, rise from 0.8221 medium term bottom is still seen as a corrective move. Upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Sustained trading below 55 W EMA (now at 0.8605) should confirm that this corrective bounce has completed. However, decisive break of 0.8867 will suggest that EUR/GBP is already reversing whole decline from 0.9267 (2022 high). That should pave the way back to 0.9267.

Daily Pivots: (S1) 1.7584; (P) 1.7636; (R1) 1.7701; More...

Intraday bias in EUR/AUD remains neutral for the moment. On the downside, below 1.7477 will extend the decline from 1.8160 to 100% projection of 1.8160 to 1.7561 from 1.7976 at 1.7377. Firm break there will pave the way to 138.2% projection at 17148. However, sustained break of 55 D EMA (now at 1.7728) will bring stronger rebound back to 1.7976 resistance.

In the bigger picture, as long as 55 W EMA (now at 1.7465) holds, price actions from 1.8554 could still be a correction to rise from 1.5963 only. However, sustained break of the EMA will argue that it's already correcting the whole up trend from 1.4281 (2022 low). In this case, deeper decline would be seen to 38.2% retracement of 1.4281 to 1.8554 at 1.6922.

Daily Pivots: (S1) 0.9329; (P) 0.9338; (R1) 0.9354; More....

Intraday bias in EUR/CHF stays neutral for the moment, and more consolidations could be seen. On the upside, break of 0.9394 will resume the rebound from 0.9178 to 0.9452 structural resistance. Decisive break there will carry larger bullish implications. However, firm break of 0.9311 support will argue that the rebound has completed, and turn bias back to the downside for retesting 0.9178 low.

In the bigger picture, EUR/CHF has breached long term falling channel resistance as the rebound from 0.9278 extends. Considering bullish convergence condition in W MACD, sustained trading above 55 W EMA (now at 0.9316) will indicate medium term bottoming at 0.9178, and suggests that it's already in larger scale rebound. Further break of 0.9452 resistance will bring stronger medium term rally towards 0.9928 resistance next. Nevertheless, rejection by 55 W EMA will retain bearishness for another fall through 0.9278 at a later stage.

Daily Pivots: (S1) 207.91; (P) 208.33; (R1) 208.78 More...

Intraday bias in GBP/JPY stays neutral as more consolidations would be seen below 208.92. Further rally is expected as long as 205.17 support holds. ON the upside, break of 208.92 will resume larger up trend and target 61.8% projection of 184.35 to 205.30 from 199.04 at 211.98 next.

In the bigger picture, up trend from 123.94 (2020 low) is resuming. Next target is 61.8% projection of 148.93 to 208.09 from 184.35 at 220.90. On the downside, break of 199.04 support is needed to indicate medium term topping. Otherwise, outlook will stay bullish even in case of deep pullback.

Markets

AI valuation stress kicks in for the second time this quarter after industry giant Broadcom’s sales outlook failed to live up to (outsized) expectations. Earlier last week, Oracle got punished for delay in completing data centers. The high beta part of the market sold off with the S&P and Nasdaq losing 1.1% and 1.7% respectively. Both key indices failed to take out the October highs in the run-up to the correction lower on Friday, in what might be a further completion of a technical head-and-shoulders formation with necklines around 6550 and 22 000. Technical pictures in the small-cap Russell 2000 or industrial Dow Jones look different (both set new highs last week), suggesting that the equity move at least for now is buffered by some rotation rather than being a broad-based market sell-off.

The equity market set-up is something to take into account as we start a jampacked week. German Chancellor Merz and Ukrainian President Zelenskyy meet today to continue peace talks. Zelenskyy yesterday said that he is ready to give up demands for NATO membership in exchange for security guarantees from the US and Europe. It’s a new tweak to the US peace proposal under discussion. There’s no breakthrough on the most thorniest issue today, territory concession. On Thursday, EU leaders also meet to decide on how to morph the frozen Russian assets at Euroclear into two year of financing for Ukraine. Focus turns to the eco data tomorrow with US November payrolls and October retail sales. Global PMI surveys (December) and UK labour market are due as well. For US payrolls we see asymmetric risks with (the front end) of the US yield curve reacting more strongly in case of data weakness compared to solid numbers. Markets were attentive to Fed Chair Powell’s suggestion that recent data overstated US labour market strength and were keen to respond to it (raising Q1 rate cut bets). For Europe, we see asymmetric risks (to PMI’s) as well but in the opposite direction. This creates space for EUR/USD to further explore the upper part of the sideways trading channel in place since summer. The YtD high (EUR/USD 1.1919) serves as key reference. ECB Schnabel opened to door for a rate hike last week (after a long pause) while more dovish ECB member shut the door to more rate cuts. This view should be backed by upward revisions to GDP forecasts at Thursday’s ECB gathering. Downward revisions to 2027 CPI forecasts might be ignored and downplayed as a technical issue related to the delay of the EU’s Emissions Trading System 2 (ETS2). For UK labour market data (and UK CPI numbers on Wednesday) we’re back in the US situation where markets will be keen to err on the dovish side of expectations. The Bank of England convenes on Thursday as well and is set to lower its policy rate from 4% to 3.75%. The EUR/GBP YtD high and reference stands at 0.8865.

News & Views

The BoJ’s Quarterly Tankan survey shows a constructive picture on the state of the economy. The closely watched large manufacturers’ sentiment index improved from 14 to 15, the best level since end 2021. The index measuring sentiment on large non-manufacturing companies held at the same level as in Q3 (34), but still hovers near the strongest levels since the 1990’s. The outlook also improved at large manufacturers (15 from 12) and remained unchanged for large non-manufacturers. Large industry capex is expected to growth at 12.6% this fiscal year. Companies expect overall global prices rises to hold near a pace of 2% over a 5-y horizon. The data strengthen the view that the BoJ will continue its policy normalization cycle with a 25 bps rate hike on Friday. Bloomberg also suggests this morning a likely start to selling ETF’s from January on. This process is expected to develop in a very gradual way in order not to disturb markets and might take decades. (starting pace of JPY 330bn/year).

Friday’s government bond issuance plan for 2026 by Slovak debt agency Ardal, shows gross issuance to be around €10bn next year. Two new syndicated deals are part of the plans. The agency intends to issue a new bond line with fixed coupon and time to maturity from 12 to 20 years (expected in H1 2026) and a new bond line with fixed coupon and time to maturity of 10 years (expected in H2 of 2026). The total expected amount to be sold via syndicated sales is EUR 5bn, regardless of the number of transaction. Aside from the syndicated sales it also intends to issue two new retail bonds lines with maturities up to 5 years. Other bond lines (including foreign currency) can be opened based on debt management requirements and investor’s demand.

Last week ended on a mixed note for equities. Looking at global index performance, the message was fairly clear: investor appetite is waning for AI-related technology stocks, while non-tech and more value-oriented pockets of the market are benefiting from the latest Federal Reserve (Fed) rate cut.

In the US, the Dow Jones briefly hit a fresh all-time high on Friday before retreating, while the tech-heavy Nasdaq fell 1.9%, sliding into its 50-day moving average. Earnings from Oracle and Broadcom were not strong enough to reignite enthusiasm, with investors instead focusing on high leverage, elevated debt levels and cloudy revenue visibility.

To rub salt in the wound, Oracle said it is pushing back the completion dates of some data centres developed for Nvidia from 2027 to 2028, citing labour and material shortages. That announcement proved to be the final blow: Oracle shares fell another 4.5% on Friday, after plunging more than 10% the day before following its Q3 results. Stress is also visible across related assets: Oracle’s new investment-grade bonds are trading at distressed levels, while its five-year CDS spiked to the highest level since 2009.

When the market’s AI risk barometer struggles, the sector’s kingpin is unlikely to remain unscathed. Nvidia shares fell more than 3%, despite reports that Chinese demand for its H200 chips exceeds current production capacity. Nvidia is now allowed to sell these chips to China provided a 25% cut of revenues is paid to the US government. The issue, however, is that there is no guarantee Beijing will allow Chinese firms to purchase them freely, given its determination to build domestic chip capacity. China, therefore, may not provide the safety net investors are hoping for.

More broadly, while Nvidia’s revenues continue to grow thanks to massive investment in AI infrastructure, investors increasingly want to see monetisation through AI-enabled end products, not just spending. That matters because investors ultimately finance this capex cycle through equity and bond markets. If their support fades, spending will need to be trimmed — and Nvidia would inevitably feel the impact.

Against this backdrop, Bitcoin — often seen as a bellwether of tech and risk appetite — remained under pressure over the weekend. While slightly firmer this morning, it is still trading below $90’000. Asian tech stocks also opened the week on the back foot, with SoftBank down more than 6%. If the global tech sell-off deepens, Bitcoin could retest — and potentially break — the key $80’000 support level.

Looking ahead, Micron’s earnings this week could add to the gloom for the tech sector. A deeper tech correction would likely accelerate rotation into non-tech and non-US assets. In the US, the Dow Jones could continue to attract flows, while in Europe the Stoxx 600 and FTSE 100 may benefit from their value tilt. For the UK market, a potential Bank of England (BoE) rate cut on Thursday could provide additional support. The BoE is expected to lower rates by 25bp, as it continues to support a weakening economy. Recent UK growth data were particularly poor, and upcoming budget measures are unlikely to improve the outlook in the near term.

China is also struggling. Recent growth, retail sales and industrial production data disappointed sharply, underscoring how reliant Chinese markets have become on tech optimism. The silver lining is that Beijing is likely to respond with further stimulus, which typically resonates well with investors.

Elsewhere, both the European Central Bank (ECB) and the Bank of Japan (BoJ) will deliver their final policy decisions of the year. The ECB is expected to stay on hold, arguing that policy is close to equilibrium while remaining data-dependent. In contrast, the BoJ is widely expected to hike rates. That move appears largely priced in, with Japanese yields rising sharply: the 10-year has pushed above 1.95%, while the 30-year is flirting with 3.40%, narrowing the gap with US yields. This raises the risk of Japanese investors repatriating capital from US Treasuries.

But, Keep Calm! The Federal Reserve has begun buying roughly $40bn per month of short-term Treasury bills to support bank reserves and stabilise short-term funding markets after years of quantitative tightening weighed on liquidity. Officials stress this is not QE, but a “reserve management” operation aimed at ensuring sufficient reserves to keep policy rates under control.

Better news: According to the New York Fed’s operational schedule, total transactions could exceed $54bn over the next month, including reserve-management purchases and reinvestments. And frankly, regardless of the label, $40bn of central-bank Treasury buying is still $40bn of liquidity entering the system — liquidity that tends to find its way into stocks, bonds and metals.

The final test this week will be US CPI and non-farm payrolls. Investors want soft labour data to justify further rate cuts — but not numbers too weak to signal a sharp earnings slowdown. And everyone wants inflation to continue easing toward the Fed’s 2% target. Lower inflation remains the key ingredient for sustaining risk appetite.

In focus this week

Today is expected to be somewhat quiet on the data front, although we highlight speeches from New York Fed President John Williams and Fed Governor Stephen Miran in the evening. Markets will be looking for comments on US monetary policy.

The rest of the week will offer many interesting figures ahead of key central bank meetings on Thursday. Important for the euro area, flash PMIs will be released on Tuesday, the final inflation print for November on Wednesday and the ECB growth forecast on Thursday.

Across the Atlantic, the delayed US nonfarm payrolls and full November Jobs Report are set for release on Tuesday along with October retail sales data and December flash PMIs. On Thursday, the November CPI is due for release in the afternoon.

All eyes will be on the Thursday central bank meetings from the ECB, Riksbank, Norges Bank and Bank of England (BoE). Market consensus expects the ECB to leave the deposit rate unchanged on the back of data coming in stronger than expected by the ECB staff. We also expect the Riksbank and Norges bank to keep interest rates steady in line with market pricing. The BoE is expected to cut the bank rate, but the labour market report on Tuesday and November CPI figures on Wednesday may play a role in the final outcome.

Rounding off the week, the Bank of Japan (BoJ) will hold its meeting. Markets have increasingly expected the BoJ to hike the interest rate in recent weeks as Governor Ueda said he will "consider pros and cons".

Economic and market news

What happened overnight

In China, the monthly batch of data showed retail sales growth declining to 1.3% in November from 2.9% in October. Industrial output growth slowed marginally to 4.8% y/y in November from 4.9% y/y in October. The figures were below expectations of 2.8% and 5.0% respectively. The housing market continued to weaken, with home prices declining 0.4% m/m and 2.4% y/y in November. As expected, China continues to be a two-speed economy with strong exports and tech development but weak domestic demand.

In Japan, the quarterly Tankan business survey showed manufacturing sentiment rising to +17 in December from the already high level of +15 in September. Sentiment improved in manufacturing to +11 from +7, while the non-manufacturing sentiment stayed at +21. The overall sentiment was +24, +21 and +11 for Large-, Medium- and Small Enterprises respectively. The business sentiment remained fairly strong, however the forecast for next quarter expects sentiment to take a smaller decline as businesses eye a BoJ hike this week.

What happened over the weekend

In the US, we had the first comments following the FOMC December meeting, however they did not provide any clear new signals. Goolsbee was not "hawkish" on interest rates next year, but felt optimistic that they could fall this year, although he felt uncomfortable front loading looser monetary policy. Hammock commented on the labour market gradually cooling but also pointed at inflation remaining above target.

In Sweden, the labour force survey (LFS) for November showed encouraging employment growth of 0.6% m/m. The unemployment rate remained at high levels but edged down to 9.1% SA from 9.3%. The Riksbank will likely continue to express concerns about the labour market during their meeting on Thursday. SPES unemployment declined for the fourth consecutive month in November to 6.7%.

In Germany, the final inflation data for November confirmed the flash estimates. CPI held steady at 2.3% y/y with electricity prices declining 1.5% y/y and food inflation remaining at low levels of 1.2% y/y. The large upside surprise in the HICP index was also confirmed, which rose to 2.6% y/y. HICP services inflation was the culprit behind the surprise as it rose to 4.2% y/y from 3.6% y/y.

Equities: Global equities had a rough end to the week, as renewed concerns around lofty tech valuations weighed on risk sentiment and pushed major indices lower. The S&P 500 ended Friday down 1.1%, resulting in a negative week overall. Friday's session showed a clear defensive tilt, with cyclicals underperforming by almost 1 percentage point. The Nasdaq ended the day 1.7% lower, while the Russell 2000 declined by around the same magnitude. Over the week as a whole, the MSCI World index ended the week down only around 0.2%.

FI and FX: We have a busy week ahead of us with plenty of central bank meetings and with very different outcomes. We have Norges Bank and the Riksbank meeting on Thursday together with the ECB and Bank of England and finally, Bank of Japan on Friday. The Bank of England is expected to cut rates, while BoJ is expected to hike rates - both by 25bp. ECB, Norges Bank and the Riksbank are all on hold, although Norges Bank is expected to signal a cut in March and the ECB is expected to signal they are on hold and possibly reverse some of the repricing we have seen lately.

Daily Pivots: (S1) 182.60; (P) 182.88; (R1) 183.23; More...

Intraday bias in EUR/JPY is turned neutral with current steep retreat and some consolidations would be seen below 187.14. Further rally remains in favor. But considering bearish divergence condition in both 4H and D MACD, upside should be limited 100% projection of 161.06 to 173.87 from 171.09 at 183.90, at least on first attempt. Meanwhile, firm break of 180.07 will confirm short term topping, and bring deeper correction to 55 D EMA (now at 178.59).

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. However, considering bearish divergence condition in D MACD, upside should be capped by 186.31 on first attempt. Outlook will continue to stay bullish as long as 55 W EMA (now at 170.73) holds, even in case of deep pullback.

Yen rallied broadly during the Asian session as weaker-than-expected Chinese data undermined regional risk sentiment. Retail sales disappointed sharply, reinforcing doubts about the strength of China’s domestic recovery and prompting a defensive tilt across FX markets.

Hopes that poor data would trigger fresh stimulus from Beijing failed to gain traction. Instead, markets appear increasingly focused on the limits of short-term policy support in the absence of deeper structural reform. The concern is that quick fixes can no longer offset entrenched weaknesses in confidence and balance sheets.

That view was echoed by the International Monetary Fund last week, which urged China to accelerate structural reforms and address the prolonged property slump. With around 70% of household wealth tied to real estate, the housing downturn continues to weigh heavily on consumption and broader economic momentum.

The IMF also cautioned that China’s size limits its ability to drive growth through exports alone. Continued reliance on export-led expansion risks exacerbating global trade tensions, particularly as tariff pressures remain in place. These warnings have reinforced investor skepticism toward cyclical and China-sensitive assets.

Yen has also drawn support from Japan’s domestic backdrop. Tankan survey data showed improving manufacturing sentiment, resilient capital expenditure plans, and inflation expectations stabilizing slightly above the BoJ’s 2% target, strengthening expectations for a rate hike later this week.

Although Japan’s economy contracted in the third quarter as exports faltered under U.S. tariffs, momentum appears to be turning. Exports and factory output have shown signs of recovery, supporting expectations that growth will rebound in the current quarter and allowing the BoJ to continue normalization cautiously.

For now, Yen leads FX gains, followed by Loonie and Dollar. Kiwi underperforms after weak services data, with Aussie and Sterling also lagging. Euro and Swiss Franc sit mid-pack.

Looking ahead, markets face a packed calendar with BoE, ECB, and BoJ decisions, but US CPI and labor data are likely to be the decisive drivers as markets approach year-end.

In Asia, Nikkei fell -1.18%. Hong Kong HSI is down -1.17%. China Shanghai SSE is down -0.35%. Singapore Strait Times is down -0.11%. Japan 10-year JGB yield rose 0.002 to 1.957.

Japan Tankan: Manufacturing sentiment improves as firms absorb tariff impact

Japan’s Q4 Tankan survey delivered a broadly supportive signal for the economy, reinforcing expectations that the BoJ will proceed with rate normalization. The large manufacturing index rose from 14 to 15, in line with expectations, marking a third consecutive quarterly improvement and the strongest reading since December 2021. The result suggests manufacturers have so far weathered the impact from higher U.S. tariffs better than feared.

Sentiment among non-manufacturers was less impressive, with the index unchanged at 34, falling short of expectations for a modest uptick. Even so, the divergence does not point to a meaningful deterioration in overall conditions, as services confidence remains elevated relative to historical norms.

Capital spending intentions added to the constructive tone. Large firms now plan to increase investment by 12.6% in the current fiscal year ending March 2026, slightly above market expectations of 12.0%.

The survey also indicated firms expect inflation to average 2.4% across one-, three-, and five-year horizons, suggesting expectations are stabilizing around the BoJ’s 2% target.

With tariff uncertainty easing and manufacturing sentiment holding firm, the survey supports the dominant market view that BoJ is positioned to raise rates in December, even as the pace of tightening beyond that remains gradual.

China data disappoints as consumption and investment weaken further

China’s November activity data delivered a broadly weaker-than-expected picture. Industrial production rose 4.8% yoy, missing expectations for 5.0% growth and marking the weakest pace since August 2024.

The sharper disappointment came from consumption. Retail sales rose just 1.3% yoy, far below expectations of 2.9% and slowing markedly from October’s 2.9% pace. It was also the weakest reading since December 2022.

Investment conditions also deteriorated. Year-to-date fixed asset investment fell -2.6%, deeper than expected -2.3% and the sharpest contraction since the pandemic in 2020. The drag from property intensified, with real estate investment down -15.9% in the first eleven months of the year, extending the slump seen earlier and reinforcing the view that the property sector remains a central constraint on China’s recovery.

RBNZ's Breman sees OCR holding at 2.25% if outlook unfolds as expected

RBNZ Governor Anna Breman signaled in media interviews today that the bar for further near-term easing remains high. While the forward path published in the November Monetary Policy Statement allows for a small probability of another rate cut, Breman stressed "if economic conditions evolve as expected the OCR is likely to remain at its current level of 2.25 per cent for some time."

Looking ahead to the next OCR decision in February, Breman said the central bank will continue to assess incoming data, financial conditions, and global developments, with a particular focus on implications for New Zealand’s economic outlook and its medium-term inflation objective.

Breman also reiterated that monetary policy is not on a preset course, highlighting the MPC’s regular meeting schedule as a reflection of that flexibility.

NZ BNZ service falls to 46.9, recovery hopes dented

New Zealand’s services sector slipped deeper into contraction in November, reinforcing signs that domestic demand remains fragile. BusinessNZ Performance of Services Index fell from 48.4 to 46.9, marking the lowest level of activity since May and sitting well below the survey’s long-run average of 52.8. All five sub-indices remained in contraction territory, underlining the broad-based nature of the slowdown.

Activity and sales saw the sharpest deterioration, dropping from 48.4 to 45.8, while employment also weakened from 48.6 to 46.4. New orders edged marginally higher from 49.2 to 49.3, offering little evidence of an imminent turnaround in demand.

BusinessNZ Chief Executive Katherine Rich said the November reading "put to bed" any immediate hope that the sector was moving toward expansion. While the proportion of negative comments eased slightly from recent months, businesses continued to cite a weak economic backdrop, low consumer confidence, high living costs, inflation, interest rates, and reduced spending as the dominant constraints on activity.

Final busy week before holidays puts NFP, CPI, BoE and BoJ in Focus

It is another event-packed week ahead before year-end holidays thin liquidity and mute follow-through. Three major central banks—BoE, ECB, and BoJ—will deliver policy decisions. But heavy-weight US data releases are expected to dominate price action and determine whether recent Dollar weakness turns from hesitation into conviction.

November US CPI and non-farm payrolls will be crucial in shaping expectations for the length of the Fed’s pause into early 2026. After last week’s risk-management cut, markets are largely priced for a January hold, while odds of a March move remain near 50%.

Fed Chair Jerome Powell has made it clear that policy focus has shifted toward employment rather than inflation. Tariff-related price pressures are increasingly viewed as transitory, reducing urgency to respond to short-term inflation noise. As a result, labor market data is likely to carry more weight than CPI in determining near-term Dollar direction, especially if hiring c shows further renewed deterioration.

In the UK, BoE is widely expected to deliver a 25bps rate cut to 3.75% on Thursday. Market concerns around the Autumn Budget have faded without disruption, while recent data suggests inflation has peaked lower than previously feared. The policy decision itself is well priced, leaving attention firmly on what comes next.

That BoE outlook remains uncertain. A recent Reuters poll shows no clear consensus on the 2026 rate path. Around two-thirds of economists expect a follow-up cut to 3.50% by end-March, while median forecasts see rates bottoming at 3.25% in Q3, implying two additional cuts next year. Voting patterns and Governor Andrew Bailey’s press conference will be scrutinized, though both are likely to highlight internal MPC splits rather than provide firm guidance.

ECB policy looks far more settled. Officials have been explicit that they are comfortable with the Deposit rate at 2.00%, with the bar for any move set high for the foreseeable future. According to Reuters polling, roughly 80% of economists expect rates to remain unchanged through mid-2026, with nearly three-quarters holding that view through year-end.

Speculation that the ECB’s next move could be a hike continues to circulate, but it remains premature. Markets and President Christine Lagarde are unlikely to entertain such discussions seriously . Instead, attention will fall on updated economic projections and sentiment indicators such as German ZEW and Ifo surveys.

In Japan, BoJ is now expected to raise rates by 25bps to 0.75%, following increasingly explicit signals from officials that normalization should resume. Governor Kazuo Ueda’s recent meeting with Prime Minister Sanae Takaichi is seen as political clearance for the move, reducing uncertainty around timing.

Even so, tightening beyond this week is expected to be slow and conditional. Future hikes will depend heavily on the outcome of next year’s Shunto wage negotiations, which appear constructive but not yet decisive. A Reuters poll shows just over two-thirds of economists expect rates to reach at least 1.00% by next September, while only a minority see 1.25% by end-2026. Japan’s Tankan survey and national CPI will help frame expectations.

Elsewhere, Canada CPI and retail sales will be watched for any challenge to BoC’s extended pause narrative, while New Zealand GDP will help gauge whether recent stabilization is evolving into a firmer recovery. PMI readings from major economies will provide timely growth signals, but unless they deliver clear surprises, they are likely to reinforce rather than redefine the week’s dominant US-driven themes.

Here are some highlights for the week:

• Monday: New Zealand BNZ services; Japan Tankan survey; China industrial production, retail sales, fixed asset investment; Swiss PPI, SECO economic forecasts; Eurozone industrial production; Canada CPI, manufacturing sales; US Empire state manufacturing.
• Tuesday: Australia PMIs, Westpac consumer confidence; UK employment PMIs; Eurozone PMIs, trade balance, Germany ZEW economic sentiment; US non-farm payrolls, retail sales, PMIs.
• Wednesday: Japan trade balance; UK CPI, PPI; Germany Ifo business climate; Eurozone CPI final.
• Thursday: New Zealand GDP; Swiss trade balance; BoE rate decision; ECB rate decision; US CPI, jobless claims, Philly Fed survey.
• Friday: New Zealand trade balance, ANZ business confidence; Japan CPI, BoJ rate decision; Germany Gfk consumer sentiment, PPI; UK retail sales; Canada retail sales; US existing home sales.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 182.60; (P) 182.88; (R1) 183.23; More...

Intraday bias in EUR/JPY is turned neutral with current steep retreat and some consolidations would be seen below 187.14. Further rally remains in favor. But considering bearish divergence condition in both 4H and D MACD, upside should be limited 100% projection of 161.06 to 173.87 from 171.09 at 183.90, at least on first attempt. Meanwhile, firm break of 180.07 will confirm short term topping, and bring deeper correction to 55 D EMA (now at 178.59).

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. However, considering bearish divergence condition in D MACD, upside should be capped by 186.31 on first attempt. Outlook will continue to stay bullish as long as 55 W EMA (now at 170.73) holds, even in case of deep pullback.