Market insights

Market Comment - 16th December 2021

Good morning,

Here we are. Super Thursday!

Midday sees the much anticipated interest rate from the Bank of England. Inflation of 5.1% will be pushing for a hike and Omicron will be creating a drag. Which will win? An interesting day ahead.

The BoE rate decision is followed quickly by the ECB interest rate decision for the European Central Bank. Expect volatility today.

The markets are betting on no change i.e. Omicron wins this particular battle. Anything outside of that will create real turmoil although this is unlikely. We are expecting a high volume of trading both sides of the decision and if there's no change the markets should calm down again. Last month the bigger news was the change in the number of votes by the Monetary Policy Committee (MPC) that had more effect on the GBP rates, so eyes will be on that.

The US rate decision remained unchanged yesterday which has provided a bead on todays outcome.

As if all this wasn't fun enough there's the Bank of Japans rate decision in the early hours of tomorrow before the UK Retail Sales data out at breakfast.

All of the hype aside there is a very good chance things will remain relatively unchanged facing the unknown of the new Covid variant so there could be a lot of trading today but possibly no clear direction afterwards.

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

UK: 12:00 Interest Rate decision, MPC vote, Monetary Policy Committee minutes

EUR: 12:45 Interest Rate decision, Policy Statement

EUR: 13:30 ECB Press Conference

JPN: Friday 03:00 Interest Rate decision

UK: Friday 07:00 Retail Sales

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