There’s a raft of data – including Australia’s November jobs on Thursday – this week. However, the key drivers of sentiment will be policy meetings in Washington, Frankfurt and London.NAB: “It has been well telegraphed that the Fed is set to hike by 50bps and that the terminal dot plot will be lifted higher to around 5.0 per cent – similar to what the market is pricing with terminal at 4.94 per cent by mid-2023, though markets thereafter price in 46bps worth of cuts in H2 2023.
TD Securities: “We expect the FOMC to deliver a 50bp rate increase at its December meeting, lifting the target range for the Fed funds rate to 4.25 per cent to 4.50 per cent. In doing so, the committee would finally move the inflation-adjusted policy stance into restrictive territory. We also look for the FOMC to signal that they will have to move to a higher terminal rate than anticipated in September.
TD: “We expect a 50bps hike, but can’t completely rule out 75bps. Focus is likely to be on QT guidance, which the Governing Council has announced will come alongside the decision. New forecasts are likely to show a worsening trade-off between growth and inflation, but the ECB likely only has another hike or two left before turning to QT as its main tool.
TD: “This should be a fairly straightforward 50bps hike, but look for language to soften a little. We expect 2 dovish dissents, with risks of a hawkish one too. Top-tier data next week injects a little uncertainty into the decision though we are mostly on-consensus with our views there. The labour market likely remains too tight for the MPC, so more hikes will come.”