Weekly updates

With traders more than happy to price in Fed cuts for 2024 where possible, they will be looking for further signs that the US economy is slowing but at a rate that does not scream recession. And this places US ISM services and the nonfarm payroll report into the limelight next week. China’s trade data and inflation figures may reveal whether Beijing need to step up support for the economy yet again. And whilst the RBA and BOC are expected to hold the cash rate steady at their monetary policy meetings, their statements may indicate how much of an appetite there is for further hikes in Q1.

Thanksgiving in the US has made for a very quiet second half to the week for traders, but with a key US inflation report and an OPEC meeting on tap then volatility is expected to return next week. Also note that Australia releases inflation figures which could be the deciding factor as to whether the RBA hold or hike at their final meeting of the year.

In what seems like a while, the US economic calendar is relatively quiet with no top tier events. But US bond auctions should be on trader’s radars as they provide a look at how strong demand is (or not) for the ultimate US safe-haven asset. And if demand is low, it could send yields higher and shake a few equity bulls out of the tree and generally weigh on risk sentiment. We also have the RBA minutes and a potentially ‘live’ speech for the governor to keep tabs on.

Hawkish comments from Jerome Powell with the threat of further hikes snapped Wall Street’s 8-day wining streak, and hints at a swing high on the S&P 500 heading into the weekend. And that puts traders on high alert for next week’s inflation report, not to mention the threat of a government shutdown if the debt ceiling is not raised by Friday.

Bond yields continue to retrace for a second week with the US dollar, which has allowed risk assets to bounce from their lows. Whilst it has been a nice reprieve from negative sentiment, it remains debatable as to whether the supposed short-covering rally can switch to a risk-on phase. Tuesday’s RBA meeting is more than likely to be live, and that could help AUD/USD move higher from oversold levels.

We have a busy calendar with what would usually be ‘red flag’ days, including central bank meetings with the FOMC, BOJ and BOE. There’s a reasonable chance we’ll see no action across all three, but the bigger response for global markets could be if the BOJ widen or abandon their yield curve control (YCC).

Find out what to expect from this week's earnings calendar.