Rise and shine everyone.

The Fed decision looms large, with markets expecting a 25bps cut. Focus will be on the updated SEP, dot plots, and Powell’s comments in the press conference. Meanwhile, UK inflation ticked up from the prior month but fell below expectations, leaving near-term BOE rate cut outlook unchanged. Analysts highlight that most accelerating CPI components have actually decelerated, prompting a slight increase in 2025 rate cut expectations. GBP/USD (Cable) trades slightly lower at 1.269.

In corporate news, Renault, Nissan’s top shareholder, is reportedly open to a potential Nissan-Honda merger. On the economic front, Chinese equities gained following new measures to support state-owned firms, while Japan reported an unexpected decline in November imports. In Australia, the debt agency may update its issuance plans following the budget release, with commodity currencies under pressure and NZ GDP data due Thursday.

Markets remain cautious ahead of the Fed and BOJ decisions. USD/JPY one-day implied volatility jumped to 21.75, reflecting heightened uncertainty. In China, government bond futures dropped sharply after the PBOC urged bond trading firms to monitor risks at a recent meeting. Meanwhile, NVIDIA’s Blackwell GPU production appears on track, though its GB200 rack-mounted solution requires further adjustments.

US. futures point upward despite the Dow’s ninth consecutive decline yesterday, the longest streak since 1978, with an overall pullback of ~4% from ATH.

The BoJ tomorrow

The Bank of Japan (BOJ) is expected to leave rates unchanged at its December Monetary Policy Meeting, as recent reports from Bloomberg and Reuters align with this view.

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