Week Ahead for FX, Bonds to Jan. 2: U.S. Data in Focus in Quiet Holiday Period

In Asia, markets head into the final stretch of the year, with central bank announcements, key inflation and trade data, as well as fresh factory-activity readings. China’s lending-rate decision, minutes from the Reserve Bank of Australia’s last meeting and a summary of opinions from the Bank of Japan will be in focus. Trade data from South Korea and Indonesia, alongside regional manufacturing surveys, will offer a snapshot of how economies fared in the final months of the year.

U.S

Advance-estimate gross domestic product data for the third quarter on Tuesday, Dec. 23 will likely be the highlight among the U.S. data releases over the coming two weeks.

Recent U.S. data have confirmed that the labor market is weak. This likely weighed on the economy and could increase the chances of the Federal Reserve cutting interest rates again, potentially in March or even January.

“We believe the latest numbers point to the U.S. economy being in a good place, but risks remain. Surveys point to unease among households about job-market prospects, and there have been numerous high-profile job cut announcements citing AI and cost-cuts,” analysts at BNP Paribas said in a note.

They expect the Fed’s next rate cut to be in March.

Data on durable goods and industrial production will also be released on Tuesday Dec. 23, alongside the Conference Board’s consumer confidence survey for December.

Weekly jobless claims figures on Wednesday, Dec. 24 and Wednesday, Dec. 31 could give further indications of a weak jobs market.

New homes sales data are due on Tuesday Dec. 23 and the Case-Shiller home price index on Tuesday Dec. 30.

U.S. markets are closed on Dec. 25 and Jan. 1.

The U.S. Treasury will auction $69 billion in two-year notes on Dec. 22, $70 billion in five-year notes on Dec. 23 and $44 billion in seven-year notes on Dec. 24.

Canada

Canada releases gross domestic product data for October on Tuesday, Dec. 23.

The data come as the Bank of Canada recently opted to leave interest rates on hold after consecutive interest rate cuts amid signs of improvement in the economy. However, weaknesses in the labor market remain, while trade tariffs from the U.S. are still a concern.

Eurozone

A handful of economic data remain for release in the coming days, while the European Central Bank’s latest economic updates left investors in a cautiously optimistic mood entering next year, making any change in interest rates unlikely in the near term.

The new staff forecasts “signaled robust growth driven by higher investment and exports, leading to stronger wage growth and a higher inflation forecast for 2026,” Societe Generale’s ECB watcher Anatoli Annenkov said in a note.

“While this suggests the ECB may have concluded its rate cuts, ECB President Lagarde cautioned that uncertainty remains high,” Annenkov said.

Overall, the ECB sounded more confident about the outlook for economic activity and rhetoric was moderately hawkish, Marco Valli, chief European economist at the Investment Institute by UniCredit said in a note.

UniCredit expects the ECB’s deposit rate to remain at 2% throughout 2026.

“The next move is likely to be a hike, but probably not before 2H27,” Valli said.

Spanish flash CPI data for December are due on Dec. 30.

Final French, German and eurozone manufacturing PMI, as well as Spanish and Italian manufacturing PMI data are due on Jan. 2 alongside eurozone M3 data and Spanish unemployment figures.