Market insights

Market Comment - 15th December 2021

Good morning,

Today is the start of a big end to the week in global markets.

UK inflation numbers have just come out. Year on year saw a 5.1% growth. This is way over the 2% target and over the 4.7% expectation. The initial burst for the GBP/EUR rate was to the upside but this has already calmed down. In a normal world this would see the Bank of England raising rates tomorrow....however these are not normal times. The recent Government rhetoric is around further, potential tightening of rules with Omicron so the interest rate decision tomorrow is a real flip of the coin.

Not too far ahead we have the US Retail Sales numbers out at late lunch followed by the FED's interest rate decision at tea time. Analysts are expecting 0.8% growth in their Retail Sales and for the interest rate to remain at 0.25%.

The rate is the big one today along with the Federal Open Market Committee (FOMC) press conference that starts around a half hour after the interest rate decision. If there's no change to the rate eyes will turn to the potential tapering (or not) of the FED's bond buying. Central banks buy bonds in difficult times to introduce money to the markets. The more stable an economy the more this program is tapered. Expect Omicron to dominate the decision making process later.

All of this is a pre cursor to the UK rate decision tomorrow in what's sometimes referred to as Super Thursday. It's going to be an interesting time in the markets in the next 48 hours.

As ever we look forward to keeping you in the loop and look out for our next update.

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Today’s Economic Calendar

US: 13:30 Retail Sales

US: 19:00 Interest Rate decision

US: 19:30 FOMC Press Conference

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