It was a slow start to the week as the economic calendar was light. The focus was yet again on oil as the rally seems to have run out of steam. Oil yesterday gave up its recent gains after Saudi Arabia announced that they will continue to invest in energy products. Also, diesel consumption in China dropped for a fourth consecutive month. The lagging price in oil is continuing to keep global prices lower and the head of the Organisation of Petroleum Exporting Countries said he wants oil producers outside the group to assist in reducing the global oversupply.
It is Fed week this week as we await the Federal Reserve’s first FOMC rate decision and meeting of 2016. There will be speculation and commentary all week surrounding the event scheduled to take place Wednesday evening. Market-based expectations point to a 96% chance of the Fed maintaining rates at this week’s meeting. However, markets will focus on the Fed’s tone and their expectations for the coming year.
Mark Carney the governor of the Bank of England testifies to the Treasury select committee about the financial stability report, the market will attempt to decipher for clues on whether a UK rate rise could be seen. From the US we get an insight into consumer confidence which is expected to slightly increase despite the recent “lift off” and on going speculation of further rate hikes.