GRAPHIC-Take Five: One last push

Dec 12 (Reuters) - European Union leaders meet for one last push to secure a deal and fund Ukraine with frozen Russian cash, while the United States releases overdue labour market and retail sales data.

Meanwhile, central banks in the euro area, Japan, Britain, Norway, and Sweden hold their last get-together of the year.

Here's all you need to know about the coming week in financial markets by Yoruk Bahceli in London, Andy Bruce in Manchester, John O'Donnell in Frankfurt, Kevin Buckland in Tokyo, and Lewis Krauskopf in New York.

1/ A LONG TIME COMING

European Union leaders meet on Thursday to thrash out a deal to use frozen Russian cash on the continent to pay for Ukraine.

The stakes are high: Frozen assets are Europe's single biggest card to play to get a say in talks chiefly between Washington and Moscow, as they negotiate a settlement of the war in Ukraine.

The idea is to tap roughly 210 billion euros ($245 billion) of Russian assets in Europe, the lion's share of which is now cash and locked mainly in Belgium, which has stepped up its opposition to the plan.

It's a test of Europe's mettle. Can it overcome its divisions to counter the first major armed conflict in decades?

There could be a fallout for Western investors, who still own tens of billions of assets stranded in Russia, from factories to cash. But with Ukraine's money running out and the continent's security on the line, European leaders have few alternatives.

2/ BETTER LATE THAN NEVER

The shutdown-delayed U.S. jobs report for November will shed light on the extent of labour market weakening that could help determine the Federal Reserve's next rate move.

Tuesday's November non-farm payrolls report is expected to show a tepid 35,000 jobs added, according to a Reuters poll.

One of the key critical data reports that had been delayed due to the 43-day federal government shutdown comes after the Fed on Wednesday cut rates by a quarter-point for a third straight meeting. However, prospects for further easing remain unclear.

And there is more delayed data due to come out, including retail sales for October, also on Tuesday, while November's consumer price index, on Thursday, will detail inflation trends.

3/HOW MANY HIKES?

For market participants, a rate hike from the Bank of Japan on December 19 is all but certain, as evidenced by this month's surge in two-year Japan government bond yields to 18-year peaks.

What happens next is less particular. At least one additional quarter-point increase to 1% next year is generally agreed upon by some economists, who say that may be the terminal rate for this cycle.

Hawks argue the policy rate needs to rise as high as 1.5% to offset inflationary pressure from the new government's stimulus plan, the biggest since the pandemic.

The policy path and the messaging around it will be crucial for the yen, which is still sagging despite historic highs in bond yields. With more G10 peers, such as Canada and Australia, turning hawkish of late, the momentum behind currency-depressing yen carry trades looks likely to build in 2026.

4/ NO CHRISTMAS SLUMBER

The European Central Bank's meeting on Thursday was meant to be a pre-Christmas snoozefest.

But it just got much more interesting after investors moved to bet on a chance of an ECB rate hike, rather than a cut next year, after policymaker Isabel Schnabel said the next move might be a higher one.

Her words weren't too surprising coming from the bank's top policy hawk and she even said a hike wouldn't come anytime soon. But stronger-than-expected growth and inflation data had already eroded bets on further cuts since the ECB last met in October.

So, while policymakers will likely keep rates steady at 2% again, markets are ready to seize on whatever ECB chief Christine Lagarde says about the outlook.

Sweden and Norway's central banks are also expected to keep rates on hold on Thursday.

5/ MAYBE A NOT SO DONE DEAL

A December rate cut from the Bank of England looks a near certainty, according to a Reuters poll, but questions about the trajectory for 2026 are likely to remain after Thursday's announcement.

Financial markets currently price in a roughly 90% chance of a rate cut to 3.75% from 4.0%, although a bad inflation reading on Wednesday could still shift the dial.

The Monetary Policy Committee voted to hold the key rate last month by a 5-4 margin. Whatever the result is on Thursday, divisions will remain going into 2026, based on comments from deputy governors Clare Lombardelli and Dave Ramsden.

While Lombardelli broached the idea of reaching the end of the BoE's easing cycle, Ramsden said gradual cuts to interest rates remained appropriate.

(Graphics by Sumanta Sen, compiled by Karin Strohecker, editing by Rashmi Aich)