The Federal Reserve raised interest rates and the median Fed forecast was for three more hikes next year
The recent string of economic data suggests that the synchronized economic expansion in the US, Europe, and Japan is strengthening as the year winds down
The Riksbank and BOJ meet in the week ahead
We do not think the widening of the cross-currency basis swap in the dollar’s favor is much more than a particularly intense bout of year-end funding needs
EM FX is being led higher by ZAR
US dollar is broadly lower and equities are heavier
Japan’s Tankan Survey suggests the expansion is strengthening. Follows the ECB and FOMC boost GDP forecasts.
Russia cut its key rate 50 bp rather than 25 as expected
Chunky options in euro, yen and sterling set to expire in NY
Market digest Fed’s statement and projections
SNB boosted forecasts while keeping rates steady
Norges Bank increase rate path
PBOC snugged policy, with some key rates lifted by five basis points
Strong EMU flash PMI
Strong UK retail sales, but BOE to stand pat
Focus on ECB
The US dollar is little changed
Equities are mixed, higher in Asia and lower in Europe, while benchmark 10-year bonds are mostly 1-3 bp higher
The Republican loss of the Alabama Senate seat does not jeopardize the tax bill, provided it is approved this year
The FOMC is widely expected to lift rates at today’s meeting, which will likely be Yellen’s last
The US is a little heavier against most of the major and emerging market currencies
Equities are mixed, European bonds yield are firmer, while US Treasuries are little changed
Sweden and UK reported higher than expected CPI
Emergency repairs to the UK Forties Pipeline has pushing up Brent prices
S&P cut Colombia’s credit rating to BBB- from BBB
The US dollar is narrowly mixed in relatively quiet activity. Year-end adjustment is well underway, and the news stream is light to start the week that sees more than a dozen central bank meetings. There is little doubt in the market that the Federal Reserve will hike rates for the third time this year at mid-week.
More than a dozen central banks meet this week.
Of the majors central banks, only the Fed is expected to hike.
Of the central banks from emerging market economies, Mexico is likely to hike, while Russia is expected to cut.
Year-end position adjustments are well under way.
Negotiations of the separation between the UK and EU will be allowed to enter the second stage
The UK economic data were mixed
China reported a larger than expected November trade surplus, bolstered by a surge in exports
The US reports the November jobs data; late yesterday, Congress extended the spending authorization until December 22
Brazil IPCA inflation rose 2.80% y/y in November vs. 2.88% expected
The swoon in global equities appears to be gaining momentum
Interest rates are lower across the board
There is a sense of risk-off
The yen is the main beneficiary in the foreign exchange market