Markets Brace for OPEC-8, ISM and Eurozone Inflation as Fed Succession Chatter Steepens the Curve
A crowded macro week puts oil, the dollar and global rates in focus as OPEC-8 meets, ISM reports land, eurozone inflation prints, and a late-running US PCE arrives—while speculation over a new Fed chair injects fresh curve-steepening risk.
Key points for traders
- OPEC-8 expected to hold output steady; focus shifts to calibrating 2027 capacity baselines—oil curve and energy FX (CAD, NOK) in play.
- Fed succession talk lifts term premium; front-end rallies on perceived dovish tilt, long-end yields edge up on independence concerns.
- US ISM Manufacturing (Mon) eyed for confirmation of cooling price pressures vs. swelling inventories; ISM Services (Wed) watched for sticky input costs.
- Eurozone flash HICP (Thu) likely consistent with an “at terminal” ECB narrative; services inflation still the swing factor.
- Swiss CPI (Wed) could sway CHF via revived NIRP chatter vs. SNB’s preference for FX intervention.
- Australia Q3 GDP (Wed) seen slower; per-capita contraction theme persists—AUD sensitivity to growth mix.
- Canada jobs (Fri) to test BoC’s “appropriate” stance; composition of hiring more important than headline.
- US PCE (Fri) delayed by shutdown; soft core print would bolster near-term cut pricing.
Fed succession watch: curve steepening risk returns
US Treasury Secretary Bessent has interviewed candidates to succeed Fed Chair Powell, with a high likelihood of a nomination before Christmas, according to people familiar with the process. Reported names include NEC Director Kevin Hassett, former Fed Governor Kevin Warsh, BlackRock CEO “Rider,” and current Governors Christopher Waller and Michelle Bowman. Bloomberg has suggested Hassett is viewed as a frontrunner, though the White House called that speculative.
Markets reacted by steepening the curve: front-end yields slipped on the prospect of a more dovish Fed chief, while the long end rose on renewed concerns over central bank independence, which tends to widen term premium. A Waller or Bowman pick would likely temper those worries. For FX, a dovish-leaning chair shortlist is dollar-negative at the front-end but complicated by higher long-end yields that can support USD via rate differentials.
Oil: OPEC-8 steady for now, eyes 2027 baselines
At Sunday’s online meeting, OPEC-8 is expected to leave production unchanged, Reuters reported, as members debate how to assess maximum productive capacity for setting 2027 output baselines. The discussion underscores tensions between producers seeking higher quotas despite limited spare capacity and the UAE’s relatively ample headroom. The alliance previously paused Q1 2026 increases after unwinding roughly 6 million bpd of voluntary cuts over prior years. With no fresh cuts or hikes likely, attention shifts to medium-term supply definitions. Near term, a policy hold should keep Brent’s term structure supported but contained; a capacity-friendly baseline framework could bear-steepen oil later, lifting inflation premia and energy-sensitive FX.
United States: ISM, services inflation, and a delayed PCE
ISM Manufacturing (Mon)
S&P Global’s November manufacturing PMI fell to 51.9 from 52.5, with output at 53.6 and a marked slowdown in new orders, including a fifth straight decline in exports. Finished-goods inventories rose at a record pace in the survey’s 18-year history, even as input purchases fell for the first time since April and supplier delivery times lengthened again. Input price inflation cooled to the lowest since February, while selling-price inflation eased. Employment ticked up. For USD and front-end rates, a soft ISM with swelling inventories reinforces disinflation and supports near-term cut pricing; an upside surprise risks a brief USD bounce.
ISM Services (Wed)
Services PMI rose to 55.0, a four-month high, with the strongest output since July and the largest rise in new business YTD. Input costs accelerated at the fastest pace since January 2023, driven by tariffs and wages, and selling-price inflation reaccelerated. Hiring stayed modest amid budget constraints, while business expectations hit an 11‑month high. For markets, sticky services costs complicate a clean disinflation story, potentially lifting breakevens and supporting long-end yields even if growth cools at the margins.
PCE inflation (Fri)
With September PCE delayed to December 5 by the shutdown, incoming CPI and PPI point to a subdued core PCE increase. Pantheon Macroeconomics estimates ~0.22% M/M for core, keeping the annual rate near 2.9% Y/Y, citing softer goods prices, tariff absorption by retailers, and cooling underlying services. The consultancy argues the backdrop strengthens the case for more Fed easing, seeing a 25 bp cut on December 10 and a further 75 bps next year. Fed officials have signaled room for an additional “near-term” adjustment; market pricing via CME’s FedWatch implies high odds of a December cut to 3.50–3.75%.
Europe: inflation, retail, and Swiss CPI
Eurozone flash HICP (Thu)
October headline inflation printed 2.1% Y/Y, while core measures topped consensus and services rose to 3.4%. Early November reads were mixed: France cooled, Spain ran slightly hotter. PMIs pointed to firmer services input costs but easing services sales-price inflation. ECB officials maintain that policy is likely at terminal, with focus shifting to December’s forecast round. Chief Economist Lane wants further deceleration in non-energy prices; policymakers suggest 2026–2027 outcomes matter most for stance calibration. A broadly in-line HICP keeps EUR tethered to rate differentials and growth momentum rather than policy surprises.
Swiss CPI (Wed)
October CPI slowed to 0.1% Y/Y (vs. 0.3% expected), under the SNB’s Q4 average forecast of 0.4%, pressuring CHF and reviving speculation—still below 5% odds—about negative rates. Officials, including Tschudin and Chair Schlegel, have emphasized the bar for NIRP is high and reiterated willingness to intervene in FX. Another soft CPI would likely weigh on CHF via lower real-rate expectations, but the SNB’s intervention bias may limit EUR/CHF upside volatility.
Asia-Pacific: Australia’s per-capita recession risk and China PMIs
Australia Q3 GDP (Wed)
Growth is widely expected to slow from 0.6% Q/Q in Q2, though a 6.4% Q/Q jump in private capex suggests business investment could cushion the headline. “Per-capita recession” dynamics remain in focus. The RBA is seen on hold with no cuts or hikes priced through 2026. AUD reaction will hinge on the growth mix: strong investment vs. weak consumption would be a nuanced, range-bound outcome; broad weakness could tilt AUD softer.
China PMIs (Mon/Wed)
Final private-sector PMIs for manufacturing and services will refine the growth pulse. Any downside surprise would weigh on regional risk sentiment and commodity FX; firmer services resilience would help stabilize APAC equities and industrial metals.
Nordics and sterling bloc: prices and activity
Sweden CPIF (Thu)
CPIF will shape Riksbank expectations at the margin. A cooler print supports SEK via lower real-rate uncertainty if global risk appetite holds; a hot surprise risks pushing terminal talk back on the table.
Eurozone retail sales (Thu)
October retail will offer a read on consumer resilience. Weakness would reinforce the soft growth narrative already embedded in European equities and the euro.
North America: Canada jobs and US sentiment
Canada labour market (Fri)
October’s headline gain of 66.6k was powered by part-time (+85k) with full-time down (-18.5k); unemployment fell to 6.9%. The BoC has framed policy as “about appropriate,” with limited traction from further tweaks unless the economy weakens. Markets price roughly 15 bps of easing by July 2026. For CAD, composition will matter more than the headline; a full-time rebound with stable wages is CAD-supportive, while a soft mix would cap rallies.
US labour signals (Thu/Fri)
Challenger layoffs and University of Michigan sentiment/inflation expectations will help triangulate labour cooling and inflation psychology. Softer expectations and contained layoffs reinforce a gentler disinflation glide path.
Week-ahead calendar
Sunday
- OPEC-8 meeting (online)
Monday
- South Korea preliminary trade balance (Nov)
- China private-sector Manufacturing PMI, final (Nov)
- Eurozone/UK/US Manufacturing PMI, final (Nov)
- US ISM Manufacturing PMI (Nov)
- South Korea CPI (Nov)
Tuesday
- Eurozone flash CPI (Nov)
- South Korea GDP, revised (Q3)
Wednesday
- Australia real GDP (Q3)
- China private-sector Services/Composite PMI, final (Nov)
- Eurozone/UK/US Services/Composite PMI, final (Nov)
- Switzerland CPI (Nov)
- US ISM Services PMI (Nov)
Thursday
- Sweden CPIF (Nov)
- Eurozone retail sales (Oct)
- US Challenger layoffs (Nov)
Friday
- Reserve Bank of India policy announcement
- Germany factory orders (Oct)
- Eurozone employment, final (Q3); Eurozone GDP, revised (Q3)
- Canada labour force survey (Nov)
- US PCE and personal income/spending (Sep)
- US University of Michigan sentiment, preliminary (Dec)
Market view
Liquidity is ample but event risk is elevated. For FX, the week sets up as USD two-way risk: soft PCE/ISM favors dollar weakness at the front end, but any renewed services inflation keeps long-end yields sticky. EUR will trade the HICP and services pricing narrative; CHF hinges on CPI and SNB reaction function; AUD watches growth composition; CAD tracks oil and jobs composition. In rates, Fed succession speculation is the stealth driver, adding curve-steepening bias as investors demand more term premium. Energy equities and oil vol may stay supported into and out of OPEC-8. This wrap was produced by BPayNews.
FAQ
How could the potential Fed chair nomination move markets?
A perceived dovish nominee can pull down front-end yields and the dollar, but independence concerns typically push long-end yields higher, steepening the curve. That mix can be choppy for equities and supports volatility in rate-sensitive FX pairs.
What are the immediate trading implications of the OPEC-8 outcome?
No change in quotas should anchor the front of the oil curve, while ongoing debates over 2027 capacity baselines may add medium-term bullish skew if higher baselines enable future output growth. CAD and NOK usually track oil’s direction and term structure.
Why does Swiss CPI matter for FX this week?
Another soft Swiss CPI would pressure CHF by lowering real-rate expectations and reviving chatter about negative rates, even if the SNB prefers FX intervention. A firmer print would reinforce the view that the SNB is at terminal, supporting CHF.
What should AUD traders watch in Australia’s GDP?
The growth mix. Strong business investment alongside weak consumption can limit AUD upside. Broad-based softness would be AUD-negative, while a balanced beat would help stabilize the currency.
What will steer EUR around the eurozone flash HICP?
An in-line print keeps focus on December ECB projections and rate differentials. Upside surprises in services inflation could nudge EUR higher via higher European real yields, while a softer core keeps EUR range-bound or softer.
How pivotal is the US PCE release for Fed pricing?
If core PCE is subdued—as suggested by CPI/PPI components—markets are likely to reinforce expectations for a near-term cut. A hotter print complicates that path and could support the dollar and front-end yields.
What matters most in Canada’s jobs data?
Composition over the headline: a rise in full-time employment and stable wages is CAD-supportive. A part-time-led gain with weaker full-time and softer wages would blunt CAD strength and keep the BoC on hold.
Which risk themes could dominate beyond the data?
Fed leadership uncertainty, oil policy signaling after OPEC-8, services inflation stickiness, and any China growth surprises remain the top swing factors for global rates, FX and commodities.
Last updated on November 29th, 2025 at 11:56 pm
