The Bank of Japan will be the last of the major central banks to hold a policy meeting this year, and policy-makers in emerging economies also mark the year-end with rates decisions.
A shock acceleration in Tokyo consumer prices to the fastest pace in 40 years has emboldened some to short Japanese government bonds ahead of Tuesday’s policy decision. Speculation was heightened by rare hints from policy board members that it might be time to review ultra-easy stimulus settings. Europe’s gas storage is almost 90% full after European Union governments acted to build reserves following disruption of Russian supplies, but a series of nuclear outages, especially in France, has added to nervousness of electricty outages.Emmanuel Macron says it was absurd to worry that blackouts would cripple infrastructure, while officials warn of possible outages and France’s Banking Federation said cash machines would be affected.
In emerging Europe, where inflation pressures are still persistent, policy makers in Hungary and the Czech Republic are set to meet on Tuesday and Wednesday, both of which held rates stable at the last meetings but pledged to tackle inflation. Investors surveyed by Deutsche Bank predict a 2.2% fall for the S&P 500 next year, citing a worse-than-expected recession.