Fed groundhog day

Monday

As today starts with no market moving data hitting the wires, markets are looking to Wednesday’s Fed meeting where rates are expected to be raised, already at a 100% probability that an interest rate rise is going to be actioned. The question that everyone will be looking to be answered next is how soon Janet Yellen, the head of the FOMC,  will outline the timing for the next rise.  Like last year’s final Fed meeting of 2015, this year’s final meeting is looking to be a carbon copy. Will the FOMC be me dovish in respect the timing and the amount of rate rises to be seen come 2017?  The divergence of monetary policies of the Eurozone and the US could be more evident and again could see a further bout of euro sellers, pushing it closer to parity against the greenback.

 

Tuesday

Tuesday’s main focus will be the release of the UK’s yearly inflation figure where consumer prices are anticipated to increase to 1.1%.  Currently at 0.9%, the weakness of sterling since Brexit has no doubt made importing goods more expensive. This is now starting to be push inflation higher and faster than the BoE have expressed.  From China, the world’s second largest economy, the industrial production yearly gauge is due to remain at 6.1%.

  • China Industrial production yoy
  • UK CPI yoy
  • German ZEW Economic Sentiment

 

Wednesday

This Wednesday, Labour data from the UK is in focus with average earnings due to stay at 2.3% and unemployment will remain at 4.8%.  Following this Mark Carney, the head of the Bank of England is to speak in London and will have markets looking for any monetary policy clues. Then the focus switches to the US, where the monthly retail sales will be released but all eyes will be on the Fed meeting with rates expected to be increased from 0.5% to 0.75%.  If seen this could see the greenback strengthen, and with the statement from Janet Yellen following this, there will be, without a doubt, further volatility for the dollar.

  • UK Average Earnings
  • UK Claimant Count
  • UK Unemployment Rate
  • UK BoE Gov mark Carney Speaking
  • US Retail Sales mom
  • US FOMC rate decision

 

Thursday

On Thursday, Manufacturing and Services PMI’s are released from across the Eurozone with the main readings both expected to register in expansion territory at 53.9.  The UK’s BoE will meet to decide on the final rate and asset purchases of the year.  As there is no action expected to be taken from the BoE, all will look to see what the policy statement portrays and what action might need to be taken should any adverse economic change be seen.  Across the pond in the afternoon from the States, their monthly consumer prices will hit the wires.

  • Euro Manufacturing PMI
  • Euro Services PMI
  • UK BoE rate decision
  • US CPI mom

 

Friday

The week closes with the Eurozone posting their inflation figure.  Inflation has been showing good signs of late that it is on the rise since going into deflationary territory earlier in the year. This last reading for 2016 is due to remain at a 0.6% level showing signs of heading in the right direction.

  • Euro CPI yoy
  • US Building Permits