As the Christmas holiday approaches, global market trading volumes are expected to gradually thin, but a series of key events and data before the holiday may still trigger volatility. The core focus of the market is highly concentrated on two points: one is the upcoming announcement of the next Federal Reserve chairman nominee, whose selection will profoundly affect the future path of monetary policy; the other is the imminent release of the final U.S. GDP value for the third quarter and PCE inflation data, which will serve as important benchmarks for assessing the effectiveness of previous rate cuts.
Core focus: The nomination process for the Federal Reserve chairman
Despite the upcoming Christmas holiday next week, the market generally expects that news regarding the nomination of the next Federal Reserve chairman may not cease. Currently, former White House Economic Council Director Kevin Hasset is significantly leading the nomination probability in prediction markets (around 54%), as he is considered more likely to support growth in monetary policy. Former Federal Reserve Governor Kevin Warsh (probability around 21%) and current Federal Reserve Governor Christopher Waller (probability around 14%) are also major candidates. Any official announcement of a nomination could trigger a repricing of the market's expectations regarding the Federal Reserve's future policy leaning towards “dovish” or “hawkish,” thus directly impacting the short-term movements of the U.S. dollar, U.S. Treasury bonds, and global assets.
Preview of important macro events and data for next week
1. Tuesday (December 24): Final review of the U.S. economic “report card”
· Event: The final value of the annualized quarterly GDP for the third quarter in the United States, the final value of the annualized quarterly core PCE price index, and the final value of the actual personal consumption expenditure for the quarter.
· Market impact: The data being released is the final revision for the third quarter. Although it is “retrospective” data, the core PCE price index is the Federal Reserve's preferred measure of inflation. If the data shows a significant upward revision from the previous value, it may weaken market expectations for continued rate cuts by the Federal Reserve next year; if it confirms the trend of slowing inflation, it will reinforce the dovish stance. At the same time, the strength of personal consumption expenditure is directly related to the endogenous momentum of the U.S. economy.
2. Wednesday (December 25): Focus on North American market dynamics
· Event:
· The Bank of Canada releases the minutes of the October monetary policy meeting (expected in the evening Beijing time).
· Highlights: In October's meeting, the Bank of Canada cut rates by 25 basis points to 2.25%. The minutes may reveal disagreements among decision-makers regarding the economic outlook, as some officials had considered pausing action to wait for more data. Any statements suggesting that interest rates are close to the “stimulus limit” or hesitation about future paths will affect the Canadian dollar's movements.
· Initial claims for unemployment benefits in the U.S. for the week ending December 20 (21:30 Beijing time).
· Highlights: As the holiday approaches, this data may experience increased volatility due to seasonal adjustments. Market expectations are for 224,000, unchanged from the previous value. If the data deviates significantly from expectations, it will affect the market's assessment of the resilience of the U.S. labor market.
· Market closure reminder: The day is Christmas, and markets in the United States, Europe, and other countries are closed all day. Some Asian markets (such as Hong Kong stocks) will have half-day trading.
3. Thursday (December 26): Focus on Japanese policy signals
· Event:
· Bank of Japan Governor Kazuo Ueda delivers a speech (time TBD, usually in the morning Beijing time).
· Highlights: Following the recent interest rate hike by the Bank of Japan, any remarks from the governor regarding price and wage growth prospects and the pace of subsequent policy normalization are closely watched.
· Japan's unemployment rate for November (around 07:30 Beijing time).
· Highlights: The market expects stability at a level of 2.6%. The Japanese labor market remains tight, but attention should be paid to whether signs of softening are beginning to appear, which relates to the sustainability of the Bank of Japan's monetary policy normalization.
Overview of trading hour adjustments
Due to the Christmas and Boxing Day holidays, the trading hours of major global exchanges are adjusted as follows:
· December 24 (Wednesday): The Hong Kong Stock Exchange opens only in the morning and is closed in the afternoon; U.S. markets close early.
· December 25 (Thursday): Most major markets around the world, including the U.S., UK, Germany, France, and Australia, will be closed all day.
· December 26 (Friday): Markets in the UK, Germany, France, Australia, and Hong Kong will continue to be closed for “Boxing Day”; U.S. markets will open as usual.
Market sentiment and strategy highlights
1. Liquidity trap: Market liquidity significantly decreases before and after the holiday, and smaller amounts of capital may also lead to exaggerated abnormal fluctuations in asset prices, traders need to pay special attention to risk control.
2. Narrative dominance: In the context of limited significant economic data, market sentiment is more likely to be dominated by news headlines regarding personnel changes at the Federal Reserve, and precautions should be taken against instant market movements triggered by related news.
3. Data validation: Even as the final value, the core PCE data in the U.S. may subtly change the market's pricing model for the Federal Reserve's rate cuts in 2026 if revisions occur.
4. Yen sensitivity: Japanese data and officials' speeches may be amplified in thin markets, especially any clues suggesting the timing of a “second rate hike,” which may trigger sharp fluctuations in yen cross rates.
Important notice: The above outlook is based on currently known public events and data schedules. The timing of significant political events such as the nomination of the Federal Reserve chairman is highly uncertain, and investors should pay close attention to real-time news.#圣诞行情