Updated: Morning Оverview of Upcoming Events and What to Expect

The start of the week looks calm, with a relatively light economic calendar, although it still includes several important indicators that could generate market movement.

In Europe, the focus is on Eurozone industrial production for October, which is expected to rise by 0.2% month over month. The data will provide insight into the health of the manufacturing sector and whether the economy is showing signs of stabilization after weaker recent months.

In North America, attention turns to Canada, where housing starts for November are expected at 232.8 thousand, alongside key inflation data. Markets will closely watch Core CPI, forecast at 0.6% MoM and 2.9% YoY, as well as headline CPI at 0.2% MoM, as these figures are important for future decisions by the Bank of Canada.

In the United States, the main macro highlight is the New York Empire State Manufacturing Index for December, expected to reach 18.7, signaling solid expansion in the sector. Later in the day, comments from FOMC member John Williams could provide additional guidance on monetary policy and the outlook for interest rates.

Overall, the day points to more moderate trading conditions, but inflation data and remarks from the Fed could trigger increased volatility in major currencies.

Link to the full calendar here:
https://calendar.varchevbrokers.com/calendar.php?lang=bg

Top 5 things to know before European markets open

• Asian markets are lower, led by declines in South Korea and Hong Kong. Bitcoin is recovering after weekend losses but remains below $90,000.
• The New Zealand dollar (kiwi) drops sharply, becoming the worst-performing G10 currency after RBNZ Governor Adrian Orr dampened investor expectations for interest rate hikes next year.
• Chinese equities are also under pressure. Investment continues to contract, retail sales growth slows to its weakest pace since the Covid shock, and house prices keep falling in November.
• In the US, National Economic Council Director Kevin Hassett said he would take President Donald Trump’s policy views into account if chosen to lead the Fed, while stressing that interest rate decisions would remain independent. Corporate news includes Alphabet, which is set to report another significant accounting gain after SpaceX completed a tender offer valuing the company at around $800 billion.
• Ukrainian President Volodymyr Zelensky signaled that Ukraine could accept security guarantees from the US and Europe as a way to prevent future Russian aggression, as an alternative to long-term NATO membership. Against this backdrop, Euro Stoxx 50 futures are slightly higher.

FX options expiring today

Today, currency markets enter a zone of FX option expiries, which may have a short-term impact on price action, especially around the New York cut (5:00 pm Bulgarian time).

The strongest focus is on EUR/USD, with a key level at 1.1600 and a total notional of around €6.15 billion. Such concentration often acts as a price “magnet,” limiting movement in the hours before expiry.

In USD/JPY, several important strikes stand out — 156.50, 156.00, and 155.00 — with a combined notional exceeding $3.5 billion, suggesting increased sensitivity in this range if price approaches these levels.

GBP/USD is also influenced by significant option expiries, with levels at 1.3500 and 1.3150 totaling over £2 billion, potentially acting as short-term support or resistance.

For USD/CHF, focus lies between 0.8100 and 0.7950, where nearly $1.65 billion is concentrated, which may keep price action in a tighter range.

USD/CAD shows a clear strike at 1.4010 with around $516 million, while in AUD/USD, the levels 0.6650 and 0.6565 (close to AUD 2 billion) could influence intraday dynamics.

In NZD/USD, the area around 0.5850–0.5805 also deserves attention, albeit with more moderate volumes.

Overall, today’s option expiries suggest more consolidated trading, with prices potentially “anchored” around key strike levels until expiration — an important factor for traders to consider when planning short-term positions.

European stocks are expected to open higher at the start of a busy week for European central banks.

According to data from IG, at the last close the UK’s FTSE rose by 0.36%, Germany’s DAX gained 0.42%, France’s CAC 40 added 0.33%, and Italy’s FTSE MIB advanced by 0.62%.

Investors in Europe face a challenging week, as the European Central Bank will hold its final meeting of the year on Thursday. Expectations are for the ECB to keep its key interest rate unchanged at 2%.

In an interview with the Financial Times, ECB President Christine Lagarde said the central bank is likely to raise its economic growth forecasts again in December, after increasing its projection for annual GDP growth to 1.2% in September.

Alongside the ECB, other central banks — the Bank of England (BoE), the Riksbank and Norges Bank — will also make their final monetary policy decisions for 2025. This week could prove difficult for markets, with the BoE expected to cut interest rates. Inflation data for the euro zone and the UK will also be released on Wednesday.

Political focus will also be intense, as European leaders face tough decisions at a summit in Brussels on Thursday, where discussions will include funding for Ukraine, including the possible use of billions of euros in frozen Russian assets to support a €210 billion ($246 billion) loan for Kyiv.