The economic calendar for this week is filled with significant releases, indicating a potential increase in volatility during the upcoming trading sessions. While there are multiple high-impact events to monitor, our primary focus will be on the nearest one: the release of U.S. inflation results scheduled for Tuesday morning.
In the last month, expectations for U.S. interest rates have declined, driven by speculations that the Federal Reserve might aggressively reduce borrowing costs in the coming year. However, this scenario is contingent on inflation decreasing more rapidly towards the 2.0% target; otherwise, policymakers may have limited interest in implementing substantial policy easing.
We anticipate gaining more insights into the overall direction of consumer prices when the U.S. Bureau of Labor Statistics reveals the inflation figures for November. Preliminary estimates suggest that the headline Consumer Price Index (CPI) remained unchanged last month, causing the annual rate to decrease from 3.1% to 3.2%. Meanwhile, the core CPI is projected to increase by 0.3% month-on-month, maintaining a steady 12-month reading of 4.0%.
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