Markets Expect Busy Week
New week in the financial markets of the world began relatively quietly. Despite the fact that only two weeks are left until the end of the year, the markets are not yet in full holiday mode. We can see some interesting moves during this week, with Brexit being a particularly likely trigger.
The focus of market participants continues to be the situation around the UK exit from the EU (Brexit). UK Prime Minister Theresa May said that a repeated referendum will not bring the country out of the political impasse, but, on the contrary, it can undermine British confidence and cause irreparable damage to politicians.
Three central banks will have meetings this week (Fed, Bank of England and Bank of Japan). BoJ and BoE are both expected to stand pat. Markets await the Fed meeting on monetary policy, which is the key expected event of the week.
The US central bank is widely expected to raise federal funds rate by 25bps to 2.25-2.50% this week. The main focus are both the new economic projections and chair Jerome Powell’s press conference. Economists now expect the Fed to raise rates twice next year, not the three times they saw previously.