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(Bloomberg) -- After the ECB’s decision not to taper, even as it scaled back its bond purchases, investors are already shifting their attention to the Fed meeting next week where a rate hike is all but guaranteed.

• With rates markets currently pricing in at least one more U.S. interest rate hike next year, assuming they raise 25bps this month, the focus will be firmly on the Fed’s dot path. Any shift higher could reignite the dollar rally and send U.S. Treasury yields higher, weighing on APAC currencies and bonds
• Not that any of this would upset the BOJ much, as it seems its best chance right now of getting inflation near 2% is via a weak exchange rate; labor cash earning in October only rose 0.1% y/y despite just 3.0% unemployment, hardly signaling that inflation is going to rise on a consumer spending spree
• Likewise a weaker Aussie dollar may suit the RBA, which has argued that an appreciating exchange rate could “complicate” the economy from making the “necessary adjustments”
• The Fed rate hike timing though, in many ways couldn’t be worse for Bank of Korea when it meets Wednesday, as it has to decide whether or not to cut rates amid an ongoing political scandal, weighing concerns of a weakening economy on one hand and high household debt and corporate debt restructuring on the other.

WHAT TO WATCH NEXT WEEK:

• After Australia’s weak 3Q GDP, all eyes will be on a plethora of economic data from home loans to consumer and business confidence, and let’s not forget payrolls, to determine whether the latest GDP print was just a pothole on the economic growth road and not the beginning of a larger trend that could force RBA reconsider the rates outlook
• New Zealand’s data starting with November house sales Monday before moving to December consumer confidence Thursday, may prove the economy is still chugging merrily along, which should keep RBNZ from a hurry to cut rates any time soon
• Even if Japan’s machinery orders Monday or 4Q Tankan survey Wednesday disappoint, BOJ may still not feel the need to act anytime soon given the yen’s recent weakness
• Indian CPI on December 13 will give insight into whether RBI has room to cut rates even further after surprising markets by leaving rates unchanged this week
• Indonesia will be hoping its trade balance on Thursday remains in the black, helping to lower the current account deficit and reducing fears that rising U.S. yields may impact the rupiah as was the case in 2013’s taper tantrum
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

• This report will replace the FX/RATES ASIA WEEK AHEAD that is published each Monday