Central banks galore :: InvestMacro

• ECB, BoC, SNB expected to CUT interest rates

• RBA seen leaving rates unchanged

• EU50: Over past year ECB triggered moves of ↑ 1.1% & ↓ 0.6%

• USDCAD near 4 year high, ↑ 6% YTD

• AU200 & USDCHF on breakout watch

Central bank decisions could spark fresh trading opportunities in the week ahead.

The European Central Bank (ECB), Bank of Canada (BoC), Reserve Bank of Australia (RBA) and Swiss National Bank (SNB) will be under the spotlight.

These high-impact events will be complemented with inflation data from the United States and Europe’s largest economy among others:

Monday, 9th December 

• CN50: China PPI, CPI
• JP225: Japan GDP, current account
• TWN: Taiwan trade

Tuesday, 10th December

• AU200: RBA rate decision
• CN50: China trade
• GER40: Germany CPI
• ZAR: South Africa manufacturing production

Wednesday, 11th December

• CN50: Central Economic Work Conference
• CAD: Canada rate decision
• JP225: Japan PPI
• ZAR: South Africa CPI, retail sales
• USDInd: US CPI

Thursday, 12th December

• AU200: Australia unemployment
• EU50: ECB rate decision
• CHF: SNB rate decision
• US500: US initial jobless claims, PPI

Friday, 13th December

• FRA40: France CPI
• EUR: Eurozone industrial production
• JP225: Japan industrial production, Tankan index
• NZD: Manufacturing PMI
• UK100: UK industrial production

Here are 4 assets that could be impacted by key 4 bank announcements:

 

    1) RBA meeting: AU200

FXTM’s AU200 could be influenced by the Reserve Bank of Australia rate decision.

Note: This index tracks the underlying ASX 200 Index

Markets widely expect the central bank to leave rates unchanged at its meeting on 10th December.

Cooling inflation may keep RBA doves at bay, but weak economic growth could support the argument for rate cuts in 2025.   

Traders are pricing in a 58% probability of a 25 bp RBA cut by February 2025 with a move fully priced in by April 2025.

Note: Over the past 12 months, the RBA decision has triggered upside moves of as much as 0.8%, or as much as 0.1% declines in a 6-hour window post-release.

Looking at the charts, key levels of interest can be found at 8533.6, 21-day and 50-day SMA.

 

    2) BoC meeting: USDCAD

The Bank of Canada is expected to cut interest rates by 25 or 50 bps at its meeting on 11th December.

This is based on weak economic growth and rising inflation which hit 2% in October.

Traders are currently pricing in an 85% probability of a 50-basis point BoC cut in December.

Note: Over the past 12 months, the BoC decision has triggered upside moves of as much as 0.3%, or as much as 0.2% in declines in a 6-hour window post-release.

Looking at the charts, the USDCAD remains bullish and is trading near 4-year highs. Should the BOC move ahead with a jumbo-sized rate cut, this could push the USDCAD to fresh 4-year highs beyond 1.4178.

*This was published before the US jobs report on Friday 6th December.

 

    3) ECB meeting: EU50

The ECB will likely cut interest rates by 25 bps at its next meeting on December 12th.

With political risk and Trump’s tariff threats threatening the growth outlook, Lagarde is expected to strike a dovish note – signaling further rate cuts in 2025.

Traders have fully priced in a 25 bps move by December with another rate cut expected by January 2025.

Bets around lower EU rates could support FXTM’s EU50 which tracks the Euro Stoxx 50 index. As of writing, the index has gained almost 10% YTD.

Prices are pushing higher on the daily charts with the next key level of interest at 5000.

Note: Over the past 12 months, the ECB decision has triggered upside moves of as much as 1.1%, or as much as 0.6% in declines in a 6-hour window post-release.

 

    4) SNB meeting: USDCHF

The Swiss National Bank is expected to cut interest rates at its meeting on 12th December. But markets are divided on whether it will be a 25 or 50 bp cut.

With the economy under pressure and exposed to political risk, more rate cuts could be on the cards.

Traders are pricing in a 45% probability of a 50-bps cut by December.

Note: Over the past 12 months, the SNB decision has triggered upside moves of as much as 1.1%, or as much as 0.4% in declines in a 6-hour window post-release.

Looking at the charts, the USDCHF is under pressure on the daily charts with resistance below the 200-day SMA. Key levels of interest can be found at 0.8900, 0.8850 and 0.8715.

*This was published before the US jobs report on Friday 6th December.