Less than 24 hours after the hawkish shift from the Federal Reserve, two additional central banks release their decisions at the same time. Join our live coverage of both critical events from 11:45 GMT. Background information is below.
ECB press conference
Live comments
BOE: After abandoning intentions to raise rates in November – dubbed a "close call" – there is high uncertainty about the next move by Governor Andrew Bailey and his colleagues. On the one hand, inflation has leaped to 5.1% YoY, but on the other, the Omicron variant is spreading rapidly in Britain.
Elevated uncertainty means high volatility, in the aftermath of any decision. Apart from the decision, the Monetary Policy Committee's vote is also critical. Two members dissented from the majority and voted for a hike last time. Full preview
ECB: The Frankfurt-based institution is also facing higher inflation than usual – albeit more transitory then elsewhere – and rising covid cases. The bank's PEPP bond-buying program expires in March and investors expect an increase in the pre-pandemic APP program.
However, the ECB could also "kick the can down the road" and wait until 2022 to decide. President Christine Lagarde delivers a press conference, in which she will present new economic forecasts. Full preview
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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