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

Wayne Cole.

Well, Fed decision week is finally upon us and it's shaping up

to be one of the most vexed meetings in recent memory. Of 108

analysts polled by Reuters only 19 tipped a hold with the rest

for an easing on Wednesday.

Futures are 88% for a rate cut, as if trying to make it a

fait accompli for policymakers who wouldn't dare disappoint such

overwhelming pricing.

Yet commentary from officials suggests at least two of the 12

voting Fed members will dissent against a cut, with more

opposition possible from divided Fed policymakers, even as one

Trump-appointed governor argues for a reduction of 50 basis

points or more.

The Federal Open Market Committee has not had three or more

dissents at a meeting since 2019, and that has happened just

nine times since 1990. Analysts note that as many as 9 of the

full 19 members could use their "dot plot" forecasts to show

they were against a December reduction.

How Chair Powell chooses to frame all this in his media

conference, and whether his focus will be on risks to employment

or to inflation, will be a crunch moment for markets. Futures

assume he will err on the hawkish side and imply only a 24%

chance of a move in January.

Further out is even more uncertain given President Trump is

due to announce Powell's successor at any time and, as usual, is

likely to favour loyalty over experience and expertise.

It's not clear how the Treasury market would deal with such

a nakedly political appointee to the most powerful central bank

position in the world, but it's unlikely to bode well for the

long end of the curve.

Central banks in Canada, Switzerland and Australia also meet

this week and all are poised to hold steady. The Swiss National

Bank might like to ease again to offset the strength of its

franc, but is already at 0% and reluctant to go negative.

A run of hot economic data has led markets to abandon any hope

of another easing from the Reserve Bank of Australia and even

price in a rate hike for late 2026.

All this has made for a cautious start on markets, with Wall

Street futures up a fraction and European futures down as much.

Asian shares are mostly in the green, led by a 1% gain for China

after it reported a 5.9% rise in exports for November, topping

forecasts and continuing to defy the drag from U.S. tariffs.

The dollar is broadly softer, while Treasuries are hushed

for the Fed countdown. Note JOLTS data are out tomorrow and

could make more of a splash than usual given the payrolls report

is now not due until December 16.

Key developments that could influence markets on Monday:

- Euro zone Sentix Index for December, Germany's industrial

output for October

- Appearances by Bank of England policymakers Alan Taylor

and Clare Lombardelli. ECB Board Member Piero Cipollone also

speaks

- NY Fed 1-year Inflation Expectations

(Editing by Saad Sayeed)