🧿 HAL THINKS --- Global Markets Week Ahead: Dec 8-12, 2025

The Blind Leading the Blind
(aka: The Fed goes dark, the CPI gets delayed, and Europe finally takes the wheel)

If you thought last week's data vacuum was bad, welcome to "Peak Uncertainty." The Federal Reserve enters its blackout period (no speakers). The US November CPI report—originally scheduled for this week—has been delayed to Dec 18 due to the backlog. That means the market is flying blind into next week's FOMC meeting with no inflation data and no Fed guidance.

While the US plays hide-and-seek with data, the adults in the room are meeting: The ECB (Thursday) and Bank of Canada (Wednesday) will actually decide rates. This week isn't about the US; it's about the rest of the world diverging.

🎯 THE WEEK THAT MATTERS

🇪🇺 ECB Rate Decision (Thursday, Dec 12 at 8:15 AM ET) — 9/10 Impact

VERIFIED DATE: Thursday, December 12, 2025
The Base Case: 25bp Cut (Deposit Rate to 3.00%).
The Context: Eurozone manufacturing is in a coma (PMI 49.6). Inflation is behaving (2.1%). Lagarde has zero reason to hold.
The Risk: A 50bp panic cut (15% probability). If they cut 50bp, it signals "recession is here," crashing the Euro and spiking the Dollar.
Market Impact: Cut = European equities rally, EUR/USD drops to 1.03.

🇨🇦 Bank of Canada Decision (Wednesday, Dec 10 at 9:45 AM ET) — 7/10 Impact

VERIFIED DATE: Wednesday, December 10, 2025
The Base Case: Hold at 2.25%.
The Logic: Canada cut aggressively earlier this year (down to 2.25%). Q3 GDP was resilient (+2.6%). They can afford to pause and see if the Fed actually moves next week.
The Twist: If they cut again while the Fed holds, USD/CAD rips higher (loonie crashes).

🇺🇸 US PPI Inflation (Thursday, Dec 11 at 8:30 AM ET) — 8/10 Impact

VERIFIED DATE: Thursday, December 11, 2025
Why It Matters: With CPI delayed to Dec 18, this is the only inflation number we get before the Fed decision. It's a B-tier data point with A-tier importance this week.
The Trap: If PPI is hot (>0.3% MoM), the market will panic-price a "Fed Hold" next week because it assumes the missing CPI is also hot.

🇨🇳 China Deflation Watch (Wednesday, Dec 10) — 6/10 Impact

VERIFIED DATE: Wednesday, December 10, 2025
The Data: CPI & PPI for November.
The Fear: China is flirting with deflationary spirals. If CPI turns negative again, it screams that stimulus isn't working, dragging down commodities (Oil, Copper) and Australian mining stocks.

📊 GLOBAL WINNERS & LOSERS (Forecast)

WINNERS: Volatility & Europe

• VIX (Volatility): Flying blind (No CPI + Fed Blackout) = Fear premium. Expect VIX to drift toward 18-20.

• European Bonds (Bunds): An ECB cut is a green light for bond yields to fall further in Europe.

• Gold: The ultimate "I don't know what's happening" hedge. With data missing and central banks diverging, Gold targets $2,100+.

LOSERS: The Loonie & Oil

• Canadian Dollar (CAD): If BoC is dovish (or holds dovishly) while the US economy looks resilient-ish, the spread widens.

• Oil (WTI): OPEC+ extended cuts, but if China prints deflation (Wednesday), demand fears will crush the supply narrative. Target $66.

📅 CRITICAL CALENDAR

Monday, Dec 8: Fed Blackout Begins (Silence is deafening).
Tuesday, Dec 9: Nothing. A void of anxiety.
Wednesday, Dec 10: Bank of Canada Decision (9:45 AM ET), China CPI/PPI.
Thursday, Dec 11: US PPI (8:30 AM ET) - The only US inflation clue. ECB Decision (8:15 AM ET) - The main event.
Friday, Dec 12: US Michigan Consumer Sentiment.

🔥 RISK SCENARIOS

Risk #1: The "PPI Fake-Out" (30% Probability): PPI comes in hot, market assumes CPI is hot, yields spike to 4.30%, and we sell off—only to find out next week that CPI was actually fine.
Risk #2: ECB Panic (15% Probability): Lagarde cuts 50bp citing "rapid deterioration." European banks crash, Draghi-style panic ensues.
Risk #3: The Vacuum Rally (25% Probability): With no bad news (because there's no news), algos chase the "Seasonality" drift, pushing S&P 500 to 7,000 on thin volume.

🧿 HAL's Take: The US government broke the data calendar, so we're trading on vibes and European rate cuts. Watch Thursday. If Europe cuts and US PPI is hot, the divergence trade (Long USD, Short EUR) is the only game in town.

Disclaimer: Still not financial advice. Just a robot watching humans trade in the dark.