🧿 HAL THINKS --- Global Markets Week Ahead: December 1-5, 2025
The Final Month Begins: Jobs, Fed Signals & The December Reckoning
December is where forecasts go to die. It's the month when governments shut down, central banks get hawkish or dovish overnight, and a single jobs report can rewrite the entire Q1 2026 playbook. This week sets the tone for everything—US nonfarm payrolls Friday, Australian GDP Tuesday, manufacturing PMIs across three continents, and the first real test of whether the Fed actually cuts in December or pivots to pause. No more ghost data. No more shutdown delays. Real numbers. Real stakes. Here's what matters.
🎯 THE WEEK THAT MATTERS
🇺🇸 US Nonfarm Payrolls (Friday, December 5 at 8:30 AM ET) — 10/10 Impact
VERIFIED DATE: Friday, December 5, 2025 at 8:30 AM ET (BLS official schedule, post-shutdown adjusted)
Why This Is THE Event: After the October jobs report was cancelled and November delayed, this is the first real labor market read in 8 weeks. The Fed watches this more than anything else right now. One number decides whether December 18 FOMC cut is 75% certain or 25% certain.
Market Expects:
Nonfarm Payrolls: +200K (range 160K-240K)
Unemployment Rate: 4.2% (vs 4.3% last month)
Wage Growth (Average Hourly Earnings): +3.9% YoY
What We're Really Watching:
Hot (>250K jobs) = Fed holds December, markets down -2-3%
In-line (200K) = Soft landing confirmed, Dec cut 70% probable
Weak (<150K) = Recession fears spike, Dec cut 85% probable
The Twist: With shutdown delays still clearing the BLS backlog, there's a 15% chance this number gets revised downward next month anyway. Watch the revisions to November just as hard as the headline.
🇦🇺 Australian GDP Q3 (Tuesday, December 2 at 8:30 PM ET / Wed 12:30 PM AEDT) — 8/10 Impact
VERIFIED DATE: Wednesday, December 3, 2025 Australian Time (Tuesday evening US time)
Why It Matters: After Australian inflation re-accelerated to 3.8% last month (hotter than expected), GDP will show if the RBA's 300bp of cuts in 2025 have actually slowed the economy or if growth is still resilient. If Q3 GDP is weak (<0.3% QoQ), the RBA probably cuts another 25bp in February. If strong (>0.5% QoQ), the RBA pauses.
Market Expects:
GDP Growth: +0.3% QoQ (2.8% YoY)
This is weak growth - Australia's trend is 0.4-0.5%
Impact Path:
Strong (>0.5% QoQ) = RBA pause signals, AUD rallies, EM strength
In-line (0.3%) = Confirms soft landing, RBA cuts again
Weak (<0.2%) = Recession panic, AUD falls, global growth concerns
🇪🇺 Eurozone Manufacturing PMI Flash (Thursday, December 4 at 10:00 AM ET) — 7/10 Impact
VERIFIED DATE: Thursday, December 4, 2025 at 10:00 AM ET
Current State: November flash PMI was 49.7 (contraction). This has been below 50 for 7 consecutive months. The question: Is this stabilizing around 50 or collapsing further?
Market Expects: PMI 50.1 (barely above contraction line)
Impact:
Above 51 (expansion) = ECB December cut still on track
49-51 (borderline) = ECB January cut more likely instead of December
Below 49 (deeper contraction) = ECB emergency cut signals, tech weakness globally
🇨🇳 China Caixin Manufacturing PMI (Thursday, December 4 at 8:45 AM ET) — 6/10 Impact
VERIFIED DATE: Thursday, December 4, 2025 at 8:45 AM ET
Current State: November official PMI was 49.2 (contraction). Caixin was 49.9 (just barely holding). The key question: Did November stimulus measures (rate cuts, reserve requirement relaxation) start working?
Market Expects: PMI 50.1 (slight expansion)
What Decides It:
Above 50.5 = Stimulus working, commodity relief, EM rallies
50-50.5 = Stabilization, not recovery yet
Below 50 = Stimulus failing, China slowdown spreading, global growth fears
🇨🇦 Canada Unemployment Rate (Friday, December 5 at 8:30 AM ET) — 5/10 Impact
VERIFIED DATE: Friday, December 5, 2025 at 8:30 AM ET (same time as US NFP)
Market Expects:
Unemployment Rate: 6.2% (up from 6.1%)
Employment Change: +15K (weak)
Impact: If Canada shows labor weakness while US shows strength, USD/CAD divergence widens, oil weakness likely (Canada is oil exporter). Watch this as an EM proxy.
📈 FOMC Blackout Period (Monday Dec 1 - Friday Dec 12) — 9/10 Importance
CRITICAL CONTEXT: The Fed enters its blackout period for the December 17-18 FOMC meeting starting Monday, December 1. This means NO Fed speakers, NO policy hints, nothing until decision day December 18.
What This Means:
All Fed guidance was given in November
December data (jobs, PCE) will be interpreted by markets WITHOUT Fed interpretation
The blackout ends Friday Dec 12 at 2 PM ET (after blackout period enforcement)
Volatility will spike because Fed can't manage expectations
This is dangerous. Markets don't like operating without a Fed safety net.
📊 GLOBAL WINNERS & LOSERS (Week Ending Nov 29)
Last Week's Performance (Nov 25-29):
Winners:
Nasdaq Composite: +4.9% (23,365 close) — Tech led the rally
S&P 500: +3.7% (6,849 close) — Broad relief
Russell 2000: +2.8% (2,150) — Small caps lagging but still up
Dow Jones: +1.2% (43,750) — Defensive outperformance
10-Year US Treasury: 4.02% yield (down 13bp from prior week) — Flight to safety
Gold: +2.1% ($2,055/oz) — Risk-off hedge demand
Bitcoin: +5.2% ($105,000+) — Risk-on optimism
Chinese Equities (HSI): +1.8% (17,200 close) — Fed cut hopes lift Asia
Losers:
Euro (EUR/USD): 1.0420 (down 0.3% vs dollar) — ECB easing expectations
Australian Dollar (AUD/USD): 0.6580 (down 0.5%) — Commodity weakness
Oil (WTI Crude): $67.50/barrel (down 1.2%) — Recession fears
Emerging Market FX: Down across the board — Dollar strength
High-Yield Spreads: 375bp (tightened from 385bp) — Credit relief rally
Bank Stocks: +1.5% vs Tech +5% — Relative underperformance
The Narrative: "Fed cuts coming, growth is fine, buy tech" carried the week. But it was thin volume (Thanksgiving Thursday close 1 PM ET, Friday shortened). Don't chase Friday's moves.
🔥 RISK SCENARIOS FOR DECEMBER 1-5
Risk #1: Hot Jobs Report (25% probability)
What: >250K jobs, unemployment stays 4.2%, wage growth 4%+
Impact: Fed hold confirmed, markets down -2-3%, yields spike to 4.40%
Outcome: December cut postponed, market rotation from growth to value
Risk #2: Australian GDP Weak + China PMI Weak (20% probability)
What: AUS GDP <0.2% QoQ, China PMI <50
Impact: Global growth panic, risk-off, safe haven demand
Outcome: Flight to US Treasuries, dollar strength, EM selloff
Risk #3: FOMC Blackout Panic (15% probability)
What: Market misinterprets silence as hawkish signal
Impact: Volatility spike with no Fed to calm it
Outcome: Mid-week selloff, then relief bounce when Fed can speak (Dec 12)
Risk #4: Eurozone PMI Collapses <49 (10% probability)
What: Manufacturing PMI falls back below 50
Impact: ECB forced to cut in December (not January)
Outcome: EUR weakness, global growth concerns, tech selloff
Risk #5: December Liquidity Collapse (20% probability)
What: Thin year-end positioning, holiday hedge funds closing
Impact: 2-3% swings on thin volume = false signals
Outcome: Whipsaws in both directions, very hard to trade
📈 THREE SCENARIOS (Dec 1-5)
BASE CASE (50% probability): "Soft Landing Confirmed"
US NFP: 200K (in-line)
Australia GDP: 0.3% QoQ (confirmed soft landing)
China PMI: 50.1 (stabilizing)
Eurozone PMI: 50.0 (borderline)
Fed Blackout: No major surprises interpreted
Market Reaction:
S&P 500: 6,900-7,000 (modest up)
Nasdaq: 23,400-23,800 (tech holds gains)
10-Year Yield: 4.08-4.18%
USD/JPY: 152-154 (steady)
Narrative: "Soft landing intact, December cut coming, buy dips"
BEAR CASE (30% probability): "Growth Slowdown + Inflation Sticky"
US NFP: 280K (hot, surprises to upside)
Australia GDP: 0.2% QoQ (disappointing)
China PMI: 49.5 (back in contraction)
Eurozone PMI: 48.8 (accelerating weakness)
Fed Blackout: Markets panic-interpret silence as hawkish
Market Reaction:
S&P 500: 6,600-6,750 (down -2-3%)
Nasdaq: 22,400-22,800 (tech selloff)
10-Year Yield: 4.35-4.50% (spike on hold fears)
USD/JPY: 150-151 (yen strength on risk-off)
Gold: $2,080+ (safe haven demand)
Narrative: "Fed holds December, growth rolling over globally, rotation to safety"
BULL CASE (20% probability): "Disinflationary Boom"
US NFP: 150K (weak, recession fears spike)
Australia GDP: 0.5% QoQ (stronger than expected)
China PMI: 50.8 (stimulus working)
Eurozone PMI: 51.2 (manufacturing stabilizing)
Fed Blackout: Interpreted as dovish (preparing the market)
Market Reaction:
S&P 500: 7,050-7,150 (new highs)
Nasdaq: 24,000+ (mega-cap tech surge)
10-Year Yield: 3.90-4.00% (flight to Treasuries)
Gold: $1,990 (de-risk into growth)
EM FX: Rally against dollar
Narrative: "Fed cuts aggressively in December, growth softens safely, year-end rally confirmed"
📅 COMPLETE CRITICAL CALENDAR
Monday, December 1:
8:00 AM ET: Manufacturing PMI Flash (Various countries)
FOMC Blackout Period Begins
No major US data expected
Tuesday, December 2:
8:30 PM ET / Wed 12:30 PM AEDT: Australia Q3 GDP (THE event for APAC)
Various eurozone manufacturing surveys
Wednesday, December 3:
No major data releases
Early close considerations (holiday weeks thin volume)
Thursday, December 4:
8:45 AM ET: China Caixin Manufacturing PMI (Monthly read on stimulus effectiveness)
10:00 AM ET: Eurozone Manufacturing PMI Flash (Contraction watch)
Fed speakers may appear (blackout period uncertainty)
Friday, December 5:
8:30 AM ET: US Nonfarm Payrolls (310K vs 227K prior + revisions)
8:30 AM ET: Canada Unemployment Rate
9:45 AM ET: US Services PMI Flash (Secondary to NFP)
US market close at 4:00 PM ET (normal hours)
🧠 WHAT ACTUALLY MATTERS
The Hierarchy of Importance This Week:
US Nonfarm Payrolls Friday = 40% of week's directional impact
Fed Blackout Uncertainty = 25% (volatility driver, not direction)
Australia GDP Tuesday = 15% (macro proof point)
China PMI Thursday = 12% (global growth signal)
Everything Else = 8%
The Real Question: Can the market handle 10 days without Fed guidance while waiting for economic data that will determine Fed action?
⚠️ DISCLAIMER
This content is provided for educational and informational purposes only. All forecasts, scenarios, and risk assessments are analytical frameworks for discussion, not personalized investment recommendations.
All investing involves risk, including possible loss of principal.
🧿 This week: Jobs report decides Fed trajectory. Australian GDP confirms soft landing or signals trouble. China PMI shows if stimulus worked. Eurozone PMI reveals extent of manufacturing collapse. Fed blackout means markets interpret data with no central bank safety net. No ghost data this time—real numbers. Real stakes. December begins now.
