Closing Recap 

U.S. stock futures are pointing to a slightly higher open on Monday, but the mood is cautious as investors look ahead to a pivotal week of U.S. economic data, including the delayed November jobs and inflation reports. The market is coming off a choppy week where tech stocks were sold off on valuation concerns, a trend that is weighing on futures to start the new week. The main driver of sentiment remains the market’s firm expectation of a Federal Reserve interest rate cut next week.

In currency markets, the Japanese yen is the standout performer, strengthening after the Bank of Japan’s Tankan survey and subsequent commentary reinforced expectations of a December rate hike. This hawkish tilt is weighing on Japanese equities. Elsewhere, gold is trading near two-month highs, while crude oil is attempting a modest rebound. 

Key Takeaways 

• Futures Point to Cautious Open: U.S. stock futures are slightly higher, but the overall tone is one of caution ahead of this week’s high-impact U.S. Nonfarm Payrolls and CPI data. 
• Tech Under Scrutiny, Rollover in Focus: The technology sector remains a key focus after a brutal sell-off last week, sparked by disappointing guidance from Broadcom and Oracle, which has intensified the “AI bubble” debate. 
• Yen Surges on BoJ Hike Bets: The Japanese yen is outperforming as the BoJ’s Tankan survey and official commentary solidify the case for a rate hike at their December 18-19 meeting, sending USD/JPY lower. 
• NFP and CPI are the Main Events: This week’s main events are the delayed November Nonfarm Payrolls (Tuesday) and CPI (Thursday) reports, which will be critical in shaping the Fed’s outlook. 
• Dollar Subdued as Fed Cut Bets Hold Firm: The U.S. Dollar is on the back foot as the market continues to price in a high probability of a Federal Reserve rate cut in early 2026, though the exact timing remains a point of contention.
• Gold Holds Near 2-Month High: The precious metal continues to attract buyers, with spot prices holding above $4,300 as dovish Fed expectations and a softer dollar provide strong support. Silver extending its powerful run, both benefiting from a weaker U.S. Dollar and persistent safe-haven demand.
• Bitcoin Edges Lower Amid Risk-Off Mood: The crypto market is starting the week on the back foot, with Bitcoin trading below $90,000 as the cautious risk tone weighs on sentiment. 
• China’s Economy Loses Momentum: A mixed bag of data from China, including weak retail sales and a deepening property crisis, is weighing on the outlook for global growth. 

Market Overview 

The new trading week begins with a sense of anticipation as the market counts down to a series of crucial U.S. economic data releases. After weeks of flying blind due to the government shutdown, investors will finally get a clear look at the health of the labor market and the state of inflation with this week’s Nonfarm Payrolls and CPI reports. These data points will be the most important inputs for the Federal Reserve ahead of their policy decision next week and have the potential to dramatically shift the market narrative. Currently, the market is firmly in the “dovish Fed” camp, with rate cut expectations providing a powerful tailwind for risk assets. However, the technology sector, which has been the market’s primary engine, is showing signs of fatigue. Last week’s sell-off, sparked by middling guidance from Broadcom and ongoing AI valuation concerns, has put the sector on edge. 

Index Futures	Last	Change	% Change
S&P 500 Futures	6846.74	19.33	0.0028
Nasdaq 100 Futures	25256	60	0.0024
Dow Jones Futures	48618	160	0.0033

While the historical odds favor a “Santa Claus Rally” in December, the path forward is not without risks. The most significant of these is brewing in Japan, where the Bank of Japan appears to be on the verge of a historic rate hike. A hawkish turn from the BoJ could have significant ripple effects across global markets, adding another layer of complexity to an already uncertain outlook.The market is now bracing for a “data deluge.” After weeks of flying blind due to the government shutdown, a flood of delayed U.S. economic reports for November—including the crucial Non-Farm Payrolls (Tuesday) and CPI inflation (Thursday) reports—is set to be released. These reports will provide the first real look at the U.S. economy in over a month and will be critical in shaping the Fed’s path. While the narrative has shifted back towards a dovish Fed, the data will ultimately have the final say.

Economic Calendar 

With the U.S. government back online, this week will see a flood of delayed economic data. Today’s slate is relatively light, with the main events scheduled for later in the week. Data Released Earlier / Overnight: 

• BoJ Tankan Survey (Q4): Showed corporate sentiment holding up better than expected, reinforcing the case for a near-term BoJ rate hike. 
• China Retail Sales & Industrial Production (Nov): A mixed report. Retail sales growth slowed sharply to 1.3% y/y, a big miss, while industrial production was also softer than expected. The property crisis also continued to deepen. 

Today’s Economic Calendar remains light on official U.S. data, with the market squarely focused on Canadian inflation: 

• European Session: An extremely light calendar with only low-tier data releases like Swiss PPI. 
• U.S. Session: The U.S. data calendar is empty, with the market awaiting key releases later in the week. 
• 13:30 GMT – Canadian CPI (Nov). 
• A heavy slate of Fed speakers including Williams and Miran.
• Reminder: U.S. Equity Index Futures are undergoing their quarterly rollover today.

Major Risk Events This Week: 

• U.S. November Nonfarm Payrolls (Tuesday): The most critical data point of the week. 
• U.S. November CPI (Thursday): The other key inflation report for the Fed. 
• Bank of England (BoE) Rate Decision (Thursday): A pivotal event for the British pound. 
• European Central Bank (ECB) Rate Decision (Thursday): Expected to hold, but the press conference will be key. 

Asset Class Spotlight: FX, Commodities, Bonds & Crypto

The big story in commodities is the continued strength in Gold. Gold prices rallied to a near two-month high, with spot gold climbing above $4,340 an ounce. The metal is being supported by a weaker U.S. dollar, falling Treasury yields, and dovish Fed expectations. Silver is also a standout performer, up over 1.9%. WTI Crude Oil is consolidating near $57.70, with Kuwait’s Oil Minister flagging a “fair price” of $60-68. Crude oil prices also edged higher, with WTI trading above $57.70 a barrel, but the upside is being capped by ongoing concerns about a global supply glut and weak demand from China.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.287	0.005	57.727
Gold	37.92	0.0088	4335.92
EUR/USD	-0.0008	-0.0007	1.1733
USD/JPY	-0.62	-0.004	155.21
Bitcoin	1052	0.0119	89637
10-Year Note Yield	-0.012	-0.0029	0.04172

The Japanese yen was the clear outperformer as hawkish BoJ commentary sent JGB yields surging and sparked a wave of short-covering. The U.S. dollar started the week on the back foot. 

• USD/JPY: The pair fell sharply, breaking below the 155.00 level as the BoJ’s Tankan survey and official commentary solidified the case for a rate hike as early as this week, providing strong support for the yen. The market is now pricing in an 83% chance of a hike. A massive cluster of options expiries between 155.00 and 156.50 defines the key battleground.
• EUR/USD: The pair is starting the week on a softer note, trading around 1.1730. The euro is consolidating its recent gains as traders await this week’s ECB meeting and key U.S. data. A massive $6.15B options expiry at the 1.1600 level provides a major support floor below the current price.
• GBP/USD: The pound is holding steady above the 1.3350 level. Dovish Fed expectations are providing a tailwind, but the market is also pricing in a high probability of a December rate cut from the Bank of England, which is likely to cap the cable’s gains ahead of this week’s BoE decision. A large $1.14B options expiry at the 1.3500 level sits above the current price.
• AUD/USD: The Aussie is under pressure after Citi shifted its forecast to call for two RBA rate hikes in 2026, a significantly more hawkish view than the market consensus. 

Cryptocurrencies: The crypto market is starting the week on a bearish note. Bitcoin is trading below the key $90,000 level as a cautious risk tone and a lack of fresh catalysts weigh on sentiment. The market remains fragile after last week’s sharp declines.U.S. Treasury yields are slightly lower as investors adopt a cautious stance ahead of the week’s key data releases. The benchmark 10-year yield is trading around 4.17%, reflecting the ongoing uncertainty about the U.S. economic outlook and the Fed’s future policy path. 

Looking Ahead 

This week is all about the data. The release of the delayed November Nonfarm Payrolls on Tuesday and the CPI report on Thursday will be the most significant market-moving events. Stronger-than-expected numbers could challenge the market’s dovish conviction and lead to a reversal in the dollar and a pullback in stocks. Conversely, weak data would all but guarantee a December rate cut and could fuel the next leg higher for the year-end “Santa Claus Rally.” With major central bank meetings also on the docket, traders should be prepared for a volatile week.

What to Watch

• The BoJ’s Hawkish Pivot: The market is now pricing in a high probability of a BoJ rate hike this week. This is a potential game-changer and could trigger a massive and violent unwind of the popular Yen-funded carry trades, a major risk for global markets. 
• The Data Deluge is Here: This is the theme of the week. After weeks of flying blind, the market is finally getting a flood of delayed U.S. data, starting with NFP (Tuesday) and CPI (Thursday). These reports will be critical in confirming or denying the dovish narrative that is currently driving markets. 
• The “Santa Rally” Narrative: December is historically a very strong month for stocks, with the S&P 500 rising 79% of the time. The market will be watching to see if this powerful seasonal tailwind can overcome the current anxieties. 
• The AI Bubble Debate: The sharp sell-off in tech last week has intensified the debate about a potential bubble in the AI sector. The market will be highly sensitive to any further signs of weakness in this leadership group.