The European Central Bank is set to cut rates by 25 basis points, extending the downtrend in borrowing costs. Australia is set to stand out by holding rates unchanged. US CPI figures will likely point to stubborn underlying inflation. Inflation data in the world's largest economy stands out as the main macro data release. Before diving into central banks, a quick word about the Middle East.
America's president-elect, Donald Trump, has threatened to slap tariffs on Canada if it doesn't curb incoming migration, adding to the nation's political crisis. Governor Tiff Macklem and his colleagues will likely paint a relatively bleaker picture of the local economy, justifying the cut, but may refrain from committing to imminent further rate cuts. In such a case, the Canadian Dollar may experience a bounce on a buy the rumor, sell the fact response.