The Week Ahead: Fed rate cut expected with Swiss, Australian and Canadian central banks in action

It’s another busy week for financial markets as investors look to the Federal Reserve to deliver a rate cut, whilst the Reserve Bank of Australia, Swiss National Bank and Bank of Canada are also in action in what’s a busy year-end period for G10 central banks.

As we enter the home stretch for the year on Wall Street, earnings reports are going to be just as important for the broader market with Adobe, Oracle and Broadcom set to post numbers this week.

Note, the US government continues to reschedule economic data releases that were impacted by the federal shutdown that ended on 12 November.

Here’s the key events to watch this week.

Monday, 8 December

At the start of week,it’s a relatively quiet session for economic data. Shares in Magnum, the ice cream brand spun off from Unilever, start trading in Amsterdam, London and New York.

Tuesday, 9 December

The Reserve Bank of Australia is expected to leave rates on hold at 3.60% after a surprisingly strong CPI report late last month showed inflation accelerating to 3.8% from 3.5% on an annual basis. The Aussie has been on a tear lately, with AUDUSD trading at its highest in three months. Given the inflation data we may see a hawkish tone from the RBA statement, although GDP has disappointed, which might see policymakers refrain from sounding too tough. Overnight we are also due to hear from Bank of Japan governor Ueda.

In Europe, we look to UK retail sales data from BRC and the Rightmove house price index, before the latest German trade data is released. 

The US session will be dominated on the latest labour market data with the Jolts job openings and ADP weekly employment change reports due. A 10yr Treasury bond auction is also listed.

Earnings from GameStop – the original meme stock – are due out, while Ashtead has fiscal Q2 earnings.

Wednesday, 10 December

All eyes on the Fed. Markets have become convinced that the US central bank will deliver a rate cut, with FOMC members recognising that despite 150bps in cumulative interest rate cuts policy remains restrictive. However, the relative positioning on the Fed’s dual mandate matters. The market has decided the Fed will continue easing next year, but that not may the clear signal from the central bank and its chair, Jay Powell, who last month cautioned that a further reduction in December was “not a foregone conclusion”. The market could be left disappointed if the Fed doesn’t signal as much easing in 2026 as hoped, even if the broader assumption is for the incoming Fed chair to run policy looser.

Away from the Fed, the Bank of Canada is expected to remain on hold, while Chinese CPI and PPI data will earlier providea view of whether it’s exiting deflation.ECB president Christine Lagarde is to deliver a speech.

UK Chancellor Rachel Reeves will appear before the Treasury Select Committee to defend the Budget, which was marked by £26bn in tax hikes.

Earnings come from Oracle, Adobe and Synopsys. Oracle in particular will be looked at in forensic detail for a signal about the wider AI market.

Thursday, 11 December

Australian employment data is the first out the gates overnight on Thursday ahead of the Swiss National Bank interest rate decision, which is expected to shy away from negative rates despite inflation slumping to zero. It’s likely that the SNB will stay at 0% for a while yet and avoid a return to negative rates unless there is a prolonged period of price growth falling below target.

Elsewhere, Bank of England governor Andrew Bailey speaks, OPEC and the IEA release their oil-market reports, and the ECB enters its quiet period ahead of the 18 December rate-setting meeting.

Chipmaker Broadcom and retailer Costco are due to report earnings.

Friday, 12 December

We end the week with UK GDP figures – a look at how things were shaping up in the turbulent period running up to last month’s Budget. The October report comes after the economy shrank by 0.1% in September, confirming meagre growth of just 0.1% in the third quarter.