The week ahead is a data loaded week for US macros. We have Nov and Oct NFPs on 16th Dec and Nov & Oct CPIs on Thursday. We also have retail sales, existing homes sales & Univ of Michigan data this week. Our sense on NFP is -20k for Oct and +80k for Nov. We expect unemployment rate to have stayed at 4.4% in Nov. On CPI front, we expect .22% MoM for Oct & .26% MoM for Nov in the core CPI. Oct & Nov NFP & CPI data can be very noisy and markets might not get a straight conclusion post the data release. Hence, we expect rate cuts pricing to not change significantly post the NFP data release. We continue to expect two more rate cuts of 25 bps each in CY26, one in the 17th June FOMC meeting & the last cut in the 16th Sep FOMC meeting. We expect long end UST yields to eventually move northwards to our target of 4.3%. In Fed speak, we have Williams, Bostic, Waller & Miran this week. The unanimous reappointment ("the unanimous concurrence of Federal Reserve Board members") of 11 regional Fed presidents (except for Bostic, who is retiring) appear to have *marginally* lowered the possibility of the Board of Governors firing regional Fed presidents in the future. In UST dated supply, we have $13 BN of 20 year UST auction on Wednesday & $24 BN of 5 year TIPS auction on Thursday. In RoW events, we have ECB meeting on Thursday which we expect to see status quo & release of HICP figures for CY28. We have BOE on Thursday where we expect a neutral 25bps cut to 3.75% policy rates with 6-3 voting margin. We expect a final cut from the Bank in April to take rates to a terminal level of 3.50%. In the BOJ meeting on Friday, we expect a dovish 25 bps hike from BOJ leading to JPY moving towards 160 levels. BOJ might not be able to give any guidance on future rate hikes leading to markets again pummeling JPY. This is also supported by our view that DXY is headed higher due to US economy exceptionalism and US might not see any cuts till June’26.
