Group 1 - The upcoming Federal Open Market Committee (FOMC) meeting is expected to result in a 25 basis point rate cut, lowering the federal funds rate target range to 3.75%-4.00% due to concerns over a potential economic "hard landing" following a collapse in ADP data [1] - The European Central Bank (ECB) is experiencing a shift in market expectations regarding its monetary policy, with ECB Executive Board member Isabel Schnabel expressing comfort with the idea of potential rate hikes rather than cuts, challenging the narrative of synchronized easing in the West [2][3] - Schnabel's hawkish stance is supported by two macroeconomic factors: the stubbornness of service sector inflation and significant government spending on defense and infrastructure, which is counteracting external demand weakness [5][6] Group 2 - The ECB is likely to revise its economic growth forecasts upward in the upcoming meeting on December 18, which could contradict current market pessimism and support a recovery in the euro against the dollar [5][6] - The misalignment in monetary policy cycles between the US and Eurozone is driving a convergence in interest rate differentials favorable to the euro, with US Treasury yields declining due to recession risks while Eurozone yields remain constrained by persistent inflation [6][7] - The outlook for the euro is cautiously optimistic due to the long-term certainty of diverging monetary policies, although there is a low probability that the Federal Reserve may emphasize inflation risks and refrain from cutting rates, which could lead to a strong rebound in the dollar [7]