This week will be full of market-moving economic data. We expect purchasing manager surveys and light-vehicle sales to indicate steady demand in November, as investors await Friday’s jobs report. Recent data on unemployment claims point to continued momentum and payroll growth should rebound from October’s meagre reading which was suppressed by both weather and strike activity. Markets will also be focused on wage growth, with futures still only assigning a 64% probability of a December Fed rate cut.

That being said, any decision on a December rate cut will also depend on next week’s CPI report and, whether they admit it or not, the Fed’s own quiet assessment of the potential for the new Administration’s agenda to reignite inflation. It will likely be some months, therefore, before investors can more accurately assess the potential path for economic growth, corporate profits, inflation and interest rates. As we note in our year-ahead outlook, while we have emerged from a cyclical storm, we have entered a policy fog.