1. The Narrative

This is a holiday-thinned liquidity week, so price moves can look “bigger than the news”. The real swing factor is policy divergence in Asia (BoJ tightening vs. China holding rates) landing in markets that are still debating the path of 2026 rate cuts. (Reuters)

2. Central Bank Watch

• Bank of England (BoE): No scheduled BoE events this week. The market is still digesting last week’s 25bp cut to 3.75% and the tight vote split (5–4), which signals a genuinely divided committee. (Bank of England)
• Federal Reserve (Fed): No rate decision this week. Watch for data-flow disruptions: the Fed’s calendar flags US federal office closures (24 & 26 Dec) and notes some statistical releases will be pushed to 29 Dec.
• European Central Bank (ECB): No policy meeting. Scheduled items are mainly ECB publications/balance-sheet plumbing, with multiple holiday closures in the week. (London Stock Exchange)
• Bank of Japan (BoJ): The BoJ’s recent rate hike to 0.75% is keeping JPY volatility in play; Japanese officials are explicitly warning about “excessive” FX moves—this can spill into global risk sentiment. (Reuters)

3. Major Company Earnings

This is typically a quiet week for blockbuster earnings (many companies avoid major releases into Christmas). Treat any unexpected guidance updates as potentially market-moving simply because liquidity is thin.

4. Key Economic Indicators

UK

• ONS Q3 GDP / Quarterly National Accounts + Balance of Payments (already released Monday): UK growth confirmed at 0.1% q/q; the current account deficit narrowed to £12.1bn (1.6% of GDP). (Office for National Statistics)

US

• GDP (Q3 2025, initial estimate) + Corporate Profits (preliminary) — Tue 23 Dec, 13:30 UK / 08:30 ET. This is the week’s cleanest macro catalyst for rates and the dollar. (Bureau of Economic Analysis)
• Durable Goods (Oct 2025, advance report) — Tue 23 Dec, 13:30 UK / 08:30 ET (rescheduled). Watch the core capex proxy for business investment momentum. (Census.gov)

Europe

• No major “tier-1” macro prints dominate this week; focus is more on ECB balance-sheet updates and holiday trading conditions. (London Stock Exchange)

China

• PBoC Loan Prime Rates (LPR): China held the 1Y at 3.00% and 5Y at 3.50%. That reinforces the “steady/gradual” stance rather than a fresh easing impulse into year-end. (Reuters)

5. Market Sentiment Check

Mood is cautiously risk-on, but fragile: European equities just notched another record close as investors leaned into the idea that inflation is cooling and rate cuts are still coming. (Reuters)
Volatility is not flashing panic—VIX ~16–17 on the latest close—but in a holiday week that can change quickly on FX or rates headlines. (FRED)
Rates are still a live input: the US 10-year ended last week around 4.12% (Fed H.15), high enough that bonds remain a credible competitor to equities at the margin. (Federal Reserve)

6. Other Key Events

• Holiday market structure (volatility amplifier):
  • US: NYSE closes early Wed 24 Dec (1:00pm ET); closed Thu 25 Dec. (New York Stock Exchange)
  • UK: London markets run half-day Wed 24 Dec (closing process starts 12:30), and Christmas/Boxing Day are non-business days. (London Stock Exchange)
• JPY intervention risk: Japan is openly signalling readiness to act against “excessive” yen moves—headline risk that can whipsaw global FX and equity futures in thin conditions. (Reuters)

7. Summary: What to Watch

• FX is the tripwire: yen volatility (and any intervention rhetoric) can ripple into global risk assets fast in thin holiday markets. (Reuters)
• US macro on Tue 23 Dec: Q3 GDP + corporate profits + durable goods are the key data points that can reprice rate-cut expectations and the USD. (Bureau of Economic Analysis)
• Liquidity + holidays: expect “air pockets” (bigger moves on small news) around early closes and market shutdowns. (New York Stock Exchange)