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Beware the “Terror Data” as Three Key Days Will Decide the Market’s Direction

The market’s focus this week returns to global inflation and economic growth performance, with the core trading logic dominated by U.S. inflation and consumption data. Tuesday’s CPI report is the top priority, and its result will reprice expectations for Federal Reserve policy. Wednesday’s Retail Sales data will reveal the economy’s underlying momentum, while the OPEC monthly report will provide direction for the energy market.

Key Event to Watch:

1. Eurozone Sentix Investor Confidence – Monday

This release is the first economic confidence indicator for the Eurozone in the new year, reflecting early market expectations for the region’s economy. The data will provide an initial test of whether confidence in the Eurozone’s 2025 economic outlook is rebounding or continuing to cool. An unexpectedly strong improvement in the index could offer short-term support for the euro.

2. U.S. Unadjusted CPI (YoY) for December – Tuesday

The release of the U.S. CPI data for December is the core event of the week. If the inflation figures (especially the month-over-month core CPI) are significantly lower than expected, it will reinforce market expectations for Federal Reserve rate cuts in 2026, which would be bearish for the U.S. dollar but bullish for U.S. stocks and gold.

3. U.S. November Retail Sales (MoM) – Wednesday

Known as the “terror data,” the U.S. monthly retail sales figure is the most direct measure of the health of American consumer spending. Against the backdrop of the holiday shopping season, the strength or weakness of this data will reveal the resilience of the core U.S. economy in a high-interest-rate environment. Strong retail data could partially offset the rate cut expectations brought on by a mild CPI, while weak data would amplify recession fears.

4. Germany Full Year 2025 GDP Growth – Thursday

Germany will release its official GDP growth forecast for the full year of 2025. As the “locomotive” of the Eurozone economy, Germany’s official growth forecast is a key bellwether. If the forecast is significantly lower than market expectations, it would confirm concerns about a lackluster economic recovery in the Eurozone and directly impact expectations for the ECB’s future policy flexibility.

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