The Federal Bank, Bank of England and Bank of Japan are likely to be the key events this week as they all will hold their monetary policy meetings in the last proper week of trading in a volatile 2018.
Key Takeaway
FED
December rate hike of 25bp fully priced in, the market’s attention has shifted to the Fed’s policy path in 2019. The new FOMC projections are likely to reflect the deterioration in economic data and market sentiment.
BOE
PM Theresa May is under growing pressure from with her own cabinet to consider all available options, including a second referendum, to solve the political impasse caused by lack of support in parliament for her Withdrawal Agreement accompanied by persistent reluctance from other European leaders to offer much stronger assurances regarding the Irish border backstop. That said, May is expected to say that a second vote would be a catastrophic breach of trust. A firm rejection by May to even contemplate another referendum would leave sterling vulnerable amid rising market concerns that the UK is on the path that leads to a hard Brexit.”
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