FOMC in focus as well as US GDP

The coming week will be quite important, with some key events too look out for. The US Federal Reserve Open Market Committee announces its latest monetary policy decision on Wednesday, a couple of days before fourth quarter GDP numbers are released. Latest economic growth figures are also updated in France, Spain and the UK, while inflation numbers will be released in the Eurozone and Japan.

With oil prices plummeting, turmoil in the stock market and an uncertain outlook for the global economy, it would be a big surprise if the US Federal Reserve hiked interest rates at its January meeting. However, the press conference following the decision will be closely watched by the markets for information on whether the Fed still thinks it will be able to deliver its planned four rate hikes during the year in the light of recent market events.

Two days after the Fed’s decision, the US Bureau of Economic Analysis releases the first estimate of fourth quarter GDP numbers, which will provide the Fed with additional information on the health of the economy. Markit’s PMI data indicated a slowing in the pace of economic growth, below 2%, with a slumping energy sector (excluded from the PMI) posing further downside risks. Economists polled by Thomson/Reuters expect growth of 1.3%.

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