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Markets look ahead to central bank meetings

Today's news headlines:

'Fed, BoE, ECB: Neutral hike, a dovish tilt and a hawkish increase'. A week of key central bank meetings lies ahead as we enter the final stages of the hiking cycle. The Federal Reserve is widely expected to hike by 25 basis points; the real piece of information to look out for will be the updated dot plot to see if policymakers anticipate a lower terminal rate. A 50 basis point hike is forecast for the BOE, with the risk of a dovish tilt the main focus for this week's meeting. On the flip side, the ECB will likely stick with its hawkish interest rate trajectory as stronger-than-expected economic data provides a convincing argument to push rates higher; a 50 basis point move is anticipated. (Bloomberg) 

'UK business optimism at six-month high despite recession risk'. Business confidence in the UK has staged a turnaround sending some conflicting messages with a recession looming in 2023. However, with inflation peaking and wholesale energy prices moving lower, it seems there is some light at the end of the tunnel. Conditions are still difficult for businesses as energy costs are set to remain elevated through the winter months. (Bloomberg) 


Stocks are lower today ahead of a busy week for central bank meetings. The dovish outlook for the Federal Reserve is keeping the Dollar subdued this morning while energy commodities slide across the board. 


UK Lloyds Business Barometer (Jan): 22 (est. 17) 
Spain flash CPI YoY (Jan): 5.8% (est. 4.9%) 
Japan Unemployment Rate (Dec): 11:30PM
Japan preliminary Industrial Production MoM (Dec): 11:50PM
Japan Retail Sales YoY (Dec): 11:50PM

Interbank rates*:

GBP/USD – 1.2379
GBP/EUR – 1.1379
EUR/USD – 1.0879
USD/CAD – 1.3351


Please contact your Dealer about any upcoming FX requirements you may have, or call +44 (0)20 3465 8200. 

*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.