Oil, dollar and yields in the spotlight as OPEC+ meets; PMIs, US ISM and PCE pack a pivotal week for markets
Traders face a crowded macro calendar with an OPEC+ policy check, a global PMI sweep, key US ISM prints and the delayed US PCE inflation report, all as speculation over the next Fed chair ripples through the Treasury curve.
Key catalysts this week
- OPEC+ expected to keep output steady while debating future capacity baselines
- Global PMIs and US ISM (manufacturing Monday, services Wednesday) to set growth and price tone
- Australia Q3 GDP, Swiss CPI, and Eurozone flash HICP to test central-bank “terminal” narratives
- Canada jobs and US PCE to refine BoC and Fed rate paths
- Fed leadership chatter steepens the US curve and stirs FX volatility
Week ahead: what’s on the docket
Sunday: OPEC+ meeting
OPEC+ ministers are widely expected to keep production unchanged at an online meeting, according to multiple reports, while focusing on longer-term capacity assessments that could anchor 2027 baselines. Tensions remain between members seeking higher quotas versus those with limited spare capacity, while the UAE’s unused potential looms large. With earlier voluntary cuts largely unwound and Q1 2026 increases paused, no immediate policy change is anticipated—putting the emphasis on future output math rather than near-term barrels.
Market take: A status-quo outcome keeps Brent’s range intact, but any surprise on capacity metrics could reprice the medium-term risk premium. Watch CAD and NOK beta to crude, and broader risk appetite if oil volatility re-accelerates.
Monday: US ISM Manufacturing, global manufacturing PMIs, South Korea trade/CPI
S&P Global’s November survey showed factory momentum cooling: headline manufacturing at 51.9, output at a two-month low, export orders falling for a fifth month, and a record buildup of finished goods inventories. Input-cost inflation eased to the lowest since February, though still above recent norms; selling-price inflation slowed.
Implications: A soft ISM would reinforce a cooling goods narrative and support the disinflation camp, weighing on the dollar’s cyclical bid and front-end yields. But sticky inventories and elongated supplier delivery times complicate the glide path. KRW may react to trade and CPI dynamics, with risk-sensitive Asian FX tracking global demand signals.
Tuesday: Eurozone flash CPI, South Korea revised Q3 GDP
Eurozone inflation dynamics remain mixed: October headline was 2.1% y/y, while underlying measures surprised slightly higher and services inflation ticked up. November country reads have diverged (France cooler, Spain hotter). PMIs point to faster services input-cost pressure, but sales-price inflation has slowed, potentially offsetting.
Implications: Markets largely assume the ECB is at terminal; barring a significant upside surprise, Thursday’s flash HICP should keep that view intact. EUR reaction likely muted unless services inflation re-accelerates sharply.
Wednesday: Australia Q3 GDP; China private-sector PMIs (final); EZ/UK/US services PMIs; Swiss CPI; US ISM Services
Australia: Growth is expected to slow from Q2’s 0.6% q/q, though a robust 6.4% q/q jump in private capex hints business investment may cushion headline weakness. GDP per capita likely remains negative, underscoring a “per capita recession” narrative. RBA pricing implies no moves through 2026, but a weak print could weigh on AUD via growth differentials.
China: Final services/composite PMIs will refine the demand picture; any downside revisions could pressure China-sensitive FX and commodities.
Eurozone/UK/US services PMIs: S&P’s US services rose to 55.0 with the strongest output since July and the biggest new-business gain this year, but input costs climbed at the fastest pace since January 2023 and selling-price inflation reaccelerated. ISM Services will be parsed for price and employment gauges. A firm services inflation pulse could challenge the near-term disinflation narrative.
Switzerland: After an October downside surprise (0.1% y/y), November CPI is pivotal. Persistent undershoots would revive talk of a return to negative rates—viewed as a high bar by the SNB—but officials continue to flag FX intervention as the primary tool. CHF is sensitive: softer prints could trim CHF’s safe-haven premium; upside would reinforce “terminal” rate expectations.
Thursday: Sweden CPIF; Eurozone retail sales; US Challenger layoffs
Scandi inflation traction is key for SEK’s rate path. Eurozone retail sales offer a read on consumer resilience, while US layoffs data color the labor-slowing thesis ahead of Friday’s jobs and PCE inputs.
Friday: RBI decision; German factory orders; Eurozone employment/GDP revisions; Canada jobs; US PCE; U. Michigan prelim
Canada: October surprised with a 66.6k employment gain (part-time-led) and a drop in the jobless rate to 6.9%, with limited impact on BoC pricing. Another strong headline with soft full-time composition would keep the BoC cautiously on hold; CAD likely trades more on oil and US data spillovers.
US PCE (September, delayed by the shutdown): CPI and PPI components imply a subdued core PCE near 0.22% m/m and 2.9% y/y, according to Pantheon Macroeconomics, with goods disinflation and signs retailers are absorbing tariff costs. Analysts argue downside inflation risks and softer labor momentum bolster the case for further Fed easing. Market pricing currently leans dovish into December.
Sentiment gauge: U. Michigan prelim expectations will be watched for inflation psychology and spending intentions into year-end.
Fed chair speculation jolts the curve
Treasury Secretary Bessent has been interviewing candidates to potentially succeed Chair Powell, with reports suggesting the White House could name a nominee before Christmas. Names floated include NEC Director Kevin Hassett, former Governor Kevin Warsh, BlackRock CEO Larry Fink’s counterpart in the report (Rider), and current Governors Christopher Waller and Michelle Bowman.
Bonds reacted to the notion of a more dovish chair: the front end firmed while the long end cheapened on perceived risks to Fed independence, lifting term premia and steepening the curve. Markets view a Waller or Bowman selection as less contentious for institutional credibility. A Hassett pick—seen as aligned with the President’s dovish stance—would likely reinforce near-term rate-cut bets while leaving the long end vulnerable to higher risk premia.
FX lens: A dovish-leaning chair nomination could weigh on the dollar short term via front-end repricing, while steeper curves and term premium rebuilding could cushion USD declines against low-yielders and support carry dynamics.
How markets could position
- USD: Two-way risks into ISM and PCE. Soft PCE/ISM would support a weaker-dollar narrative, but any reacceleration in services prices or a hawkish surprise in ISM subcomponents could stabilize DXY.
- Rates: Curve steepening momentum bears watching as leadership headlines swirl; liquidity could thin into year-end, amplifying moves.
- Oil: Base case is policy hold from OPEC+; surprises on 2027 capacity baselines or compliance could jar the term structure. Watch energy FX (CAD, NOK) and inflation breakevens.
- EUR/CHF: Eurozone HICP near consensus keeps ECB “on hold” story; Swiss CPI is an asymmetric risk for CHF given intervention rhetoric.
- AUD/CAD: Australia’s per-capita squeeze argues for growth caution; Canada’s labor mix and crude path drive CAD into Friday.
Day-by-day quick calendar
- Sun: OPEC+ meeting
- Mon: South Korea prelim trade (Nov); China private manufacturing PMI final (Nov); EZ/UK/US manufacturing PMIs final (Nov); US ISM Manufacturing (Nov); South Korea CPI (Nov)
- Tue: Eurozone flash CPI (Nov); South Korea GDP revised (Q3)
- Wed: Australia GDP (Q3); China private services/composite PMI final (Nov); EZ/UK/US services/composite PMIs final (Nov); Swiss CPI (Nov); US ISM Services (Nov)
- Thu: Sweden CPIF (Nov); Eurozone retail sales (Oct); US Challenger layoffs (Nov)
- Fri: RBI decision; German factory orders (Oct); Eurozone employment final (Q3) and GDP revised (Q3); Canada jobs (Nov); US PCE (Sep); US University of Michigan prelim (Dec)
FAQ
Why does the OPEC+ meeting matter for FX?
Oil direction feeds directly into inflation expectations and terms of trade. A stable OPEC+ policy likely keeps crude rangebound, supporting carry and risk appetite. A surprise that tightens medium-term supply could lift oil-sensitive FX like CAD and NOK while nudging global yields and breakevens higher.
What could move the dollar more: ISM or PCE?
Both are important, but PCE is the Fed’s preferred inflation gauge. A soft core PCE print alongside a cooling ISM Manufacturing would be a stronger bearish USD combo than one data point alone. Conversely, firm ISM Services prices and employment could offset a benign PCE.
How would a dovish-leaning Fed chair nomination affect markets?
Front-end yields would likely fall on expectations of easier policy, weighing on the dollar initially. However, concerns about policy independence can lift term premia, steepening the curve and partially cushioning USD versus low-yielders.
What are the key swing risks for the euro this week?
The Eurozone flash HICP. If services and core components surprise meaningfully higher, the market may pare back 2025 easing expectations, supporting EUR. Otherwise, a steady print keeps the ECB near terminal, capping EUR rallies.
Could Swiss CPI push the SNB back to negative rates?
It’s possible but remains a high bar. Officials have emphasized FX intervention as the primary tool. Another downside CPI surprise would pressure CHF, but a re-acceleration would keep “terminal” policy expectations intact.
What should AUD traders focus on in Australia’s GDP?
Headline growth versus per-capita contraction and the contribution from private capex. A weak consumption backdrop with strong investment can still leave the RBA sidelined, limiting AUD upside unless global risk improves.
This analysis is produced by BPayNews for informational purposes only.
