Macroeconomics: The Week Ahead: 01-05 December 2025

Week Ahead – Preview

The first week of the new month has a familiar run of data, even if the US monthly labour report will not be published until December 16 (i.e. after the Dec FOMC meeting). PMIs/ISM surveys and a slew of CPI data around the world dominate the start of the week, with Japan’s Q3 CapEx, US September PCE deflators, ADP Employment and Challenger Layoffs, Canadian labour data, Australian and Brazilian Q3 GDP also on tap. The Fed’s purdah period leaves the focus on a good number of ECB and BoE speakers, a potentially significant signal on the BoJ December rate decision when Governor Ueda speaks, and an expected further 25 bps rate cut from India’s RBI. Corporate earnings reports are seasonally low, featuring more from US retailers (along with anecdotal reports on Black Friday and Cyber Monday sales) and the gamut of major Canadian bank results. In the commodities space, OPEC+ held production levels for January as expected, with a number of major conferences scheduled, including the World LNG Summit in Istanbul, the FT Commodities Asia Summit in Singapore and the Asian International Coffee conference in Vietnam, while there are monthly crop reports from Australia’s ABARES, Canada’s Statcan and Brazil’s Conab Coffee production. On the political front, the US efforts to secure a Ukraine peace plan, and the fall-out from last week’s UK Budget will be the focal points, as markets continue to eye what additional measures may be taken in China to stimulate sluggish domestic demand, following the downbeat weekend NBS PMIs.

– PMIs: these remain fairly consistently downbeat relative to official data, with the exception of China. Continued divergence is expected in the US, where the Manufacturing ISM is seen at 49.0 against confirmation of the flash reading of 51.9 for the PMI, while the Services ISM is forecast at a more modest 52.0 vs. much more robust 55.0 for the Services ISM. In the Eurozone, strength in Spain and Italy is seen contrasting with weak profiles for Germany and, to a large extent, France, leaving the pan-Eurozone Manufacturing in marginal contraction at 49.7, though the Services PMI is forecast to be confirmed at a relatively solid 53.1, while UK PMIs are expected to be confirmed at a sluggish 50.2 for Manufacturing and 50.5 for Services.

– U.S.A.: In the absence of the official data, the focus will be on ADP Employment seen slowing to just 10K from 43K, Challenger Layoffs and weekly jobless claims, with Layoffs likely to post quite a sharp rise, but contrast with Initial Claims remaining low at 222K, though slightly higher than the 7 month low of 216K reported last week. None of which, if forecasts are correct, will serve to swing the balance of a divided FOMC decisively. The September PCE deflators are expected to see headline and core at a relatively lofty 2.8% y/y, but too ‘stale’ and of little relevance to the December rate decision, even if an above forecast outturn would push back against last week’s revival of optimism that rates will be cut a further 25 bps in December. September Import Prices and Industrial Production are also due. Initial anecdotal evidence points to a robust ca 9.0% y/y increase in Black Friday sales, though this is a nominal rather than a real number, but certainly not indicative of US consumers ‘hunkering down’. Next week’s rate decision still looks like a 50/50 call, the question is as much about whether Powell & co want to largely coalesce on the rate outlook, or double down on the divisions of opinions. The latter would perhaps add to potential end of year volatility, which would be exacerbated by clear signs of some liquidity stresses in US money markets.

– Japan: Monday’s Q3 Capital Spending data are forecast to show headline slowing to a still very solid 6.0% y/y from 7.6%, though the ex-Software measure is seen accelerating by 0.2 ppt to 5.4%, any miss relative to forecasts will determine the extent of the revision to the preliminary Q3 GDP estimate of -0.4% q/q. But the focus remains on the MoF threats of intervention to prop up continued JPY weakness, and the aforementioned speech by BoJ Governor Ueda.

– UK: There will be some interest in the BRC’s Shop Price Index, above all if food prices were to decelerate further, but with monthly activity data and CPI due to be published before the BoE next meets on the 18th December, it is unlikely to have much impact on the rate decision. Monetary & Credit aggregates and Nationwide House Prices are also slated for release.

– There are 10 S&P 500 companies reporting this week, with worldwide corporate earnings highlights as compiled by Bloomberg News likely to include: Bank of Montreal, Bank of Nova Scotia, CIBC, Crowdstrike, Hewlett Packard Enterprise, Inditex aka  Industria de Diseno Textil, Kroger, Marvell Technology, MongoDB, National Bank of Canada, Pure Storage, Royal Bank of Canada, Salesforce, Snowflake, Toronto-Dominion Bank.