A look at the day ahead in European and global markets from

Kevin Buckland

A momentous couple weeks for global central banks brings

policy decisions from two of the biggest on Thursday: the

European Central Bank and the Swiss National Bank.

Rate cuts by both are not in question, but how deep those

cuts will be is still up for debate.

The Swiss central bank decides first, and market-implied

odds are tilted towards a half-point cut to 0.5%, ramping up in

recent weeks after Chairman Martin Schlegel invoked the

possibility of a return to negative rates if needed to dampen

investor appetite for the safe-haven franc.

At the ECB, a more-standard quarter-point reduction is seen

as the most likely outcome, but the 15% odds on a half-point cut

suggest that traders see it as a non-negligible risk. The

balancing act for European central bankers is an economy

teetering towards recession, even as some of the more hawkish

officials argue inflation is still a concern given rapid wage

growth and spiking services costs.

The potential for big U.S. tariffs come January and

simmering political crises in both Germany and France - the

heart of the euro zone - introduce additional uncertainty.

Whichever way the ECB goes today, further easing is

undoubtedly coming: Markets are priced for reductions at every

meeting until June, followed by at least one additional cut in

the final half of 2025.

Some major euro milestones are being eyed by corners of the

market, including pre-Brexit levels versus sterling and even

parity with the dollar for the first time since late 2022.

The United States releases PPI figures later on Thursday, a

day after an as-expected and not-too-hot reading of consumer

inflation all but cemented in the market's mind a Federal

Reserve rate cut for Dec. 18.

The Wall Street rally that followed the CPI numbers, pushing

the Nasdaq above 20,000 for the first time, has spilled

over into Asia, boding well for European shares.

Meanwhile, the yuan stabilised on Thursday after the PBOC

set a slightly stronger fixing. It had come under pressure the

day before after a Reuters report that Beijing was considering

further depreciation to counter any U.S. trade war.

Key developments that could influence markets on Thursday:

-SNB, ECB policy decisions

-Sweden, Ireland CPI (both Nov)

-US PPI (Nov)