Table of Contents

1. Introduction
2. Japan GDP: Weakness Returns
3. RBA: Neutral Pause Expected
4. JOLTS: The Critical Pre-FOMC Input
5. Bank of Canada: Steady Tone
6. FOMC + SEP: Main Catalyst of the Week
7. Thursday PPI: Producer-Side Inflation Check
8. Friday UK GDP: Final Print Before BoE
9. Conclusion

Introduction

This week begins quietly but builds into one of the most pivotal macro stretches of the month. Japan’s GDP contraction reinforces continued economic fragility, while global markets shift toward a packed schedule of interest rate decisions and US labor data. With expectations finely balanced, especially around the FOMC meeting, traders face a landscape primed for volatility, rotation, and potential whipsaw reactions.

Japan GDP: Weakness Re-Emerges

Japan’s economy contracted –0.60%, slipping below the prior –0.50% reading and signaling that underlying momentum remains soft.
Even if the Bank of Japan raises rates next week, policymakers will likely maintain a dovish, accommodative stance to support fragile demand, a setup that typically pressures the yen.

RBA: Neutral Pause Expected

After last month’s rate cut, the Reserve Bank of Australia is set to hold.
Inflation remains elevated, but economic conditions are stable enough for policymakers to adopt a cautious, data-dependent tone.
No further cuts are likely until inflation demonstrates clear and sustained progress.

JOLTS: The Critical Pre-FOMC Input

Tuesday delivers JOLTS for both September and October, the last labor reading before Wednesday’s FOMC decision.

The market logic is simple:

• Both prints strong → labor still tight → cuts become less likely
• One or both prints weak → labor cooling → cuts remain on-table

Given NFP came in solid the other week and inflation is still sticky near 3%, strong JOLTS prints could push the Fed into a "skip and wait" decision.

Local Implication (US): Higher yields, USD strength, and pressure on risk assets if labor surprises strong.

Bank of Canada: Cautious and Steady

The BoC is expected to hold at 2.5%.
Inflation is not at target, but overall conditions remain stable. Unless tone shifts materially, the market impact should be minimal.

FOMC + SEP: The Core Catalyst

Markets have already priced in an 80%+ probability of a 25bps rate cut, but this remains susceptible to shifts if JOLTS prints strong.

Scenario 1 — Less Likely: No Cut

• “Higher for longer” updated SEP
• Equities + commodities turn bearish
• USD strengthens into week’s end
• Profit-taking accelerates on risk assets

Scenario 2 — Base Case: Fed Cuts 25bps

• Classic “buy the rumour, sell the news” reaction
• SEP remains broadly unchanged
• Powell neutral

Local Implication: US markets could see positioning reshuffles within hours of the release, with MRKT-style sentiment indicators likely flashing volatility spikes.

Thursday: PPI for Oct + Nov

Producer-side inflation reveals whether rising input costs risk spilling into consumer inflation.
Any heat here could fuel a short-term hawkish repricing.

Friday: UK GDP — Final Input Before BoE

The UK delivers its last major data print for the economic health before the BoE’s interest-rate meeting.
GDP is expected to soften slightly but remain close to the previous 1% reading, reflecting late-cycle resilience despite sluggish growth conditions.

Conclusion

This week compresses, multi-bank policy decisions, pivotal US labor data, and the FOMC into one tight macro window.
With sentiment fragile into year-end, traders should expect volatility, rotation, and sharp reactions to any deviations from expectations.