FOMC Minutes and ECB’s Praet in focus today – Lloyds Bank

Globally, the key event today will be the release of the minutes of the September FOMC meeting, suggests Hann-Ju Ho, Research Analyst at Lloyds Bank.

Key Quotes

“Policymakers are likely to ‘look through’ the noise in weather-affected economic data and focus instead on the underlying picture which has remained robust. The updated ‘dot plot’ of individual members showed no change to the median expectation of one further hike this year. The Fed’s Evans and Williams are scheduled to speak today.”

“In the Eurozone, there will be interest in ECB Chief Economist Peter Praet’s address at a conference in New York on “European Exit Strategies”. In particular, markets will be looking for clues on the potential trade-off in future QE policy between the duration of the programme and the size of monthly asset purchases.” 

“The euro may be receiving some support after Catalonia’s President rowed back from declaring independence for a few weeks, although most of the market impact will be on Spanish-specific assets. The political situation in Spain remains fluid. The main global focus today is the FOMC minutes which should reaffirm expectations for a December hike, while the ECB’s Praet may sound cautious about withdrawing policy stimulus next year. Sterling markets will focus on Chancellor Hammond’s testimony at the House of Commons.”