EUROPEAN SESSION

In the European session, the main highlight was the UK CPI report. The data came out lower than expected vindicating the BoE’s patient stance and will likely see traders paring back further BoE rate hike bets considering also the drop in oil prices.

Looking ahead, we don’t have much on the agenda other than the final Eurozone CPI report. The data won’t change anything for the ECB at this point, so the market reaction will likely be muted.

AMERICAN SESSION

In the American session, we have the US Retail Sales report and the FOMC rate decision. The US Retail Sales M/M is expected at 0.5% vs 0.5% prior, while the Ex-Autos M/M metric is seen at 0.5% vs 0.7% prior. The Control Group M/M is expected at 0.4% vs 0.5% prior. This is generally a market-moving release but it’s almost always faded because of the volatile nature of the data.

The main event today is the FOMC rate decision. The Fed is widely expected to keep the federal funds rate unchanged at 3.50-3.75% and remove the easing bias from the statement. No dissenter is expected. At this meeting, we also get the Summary of Economic Projections (SEP) where near-term inflation is expected to be revised higher and unemployment lower. The dot plot is expected to show no cuts for this year. The focus will be on the dot plot and Fed Chair Warsh’s press conference.

CENTRAL BANK SPEAKERS

• 13:00 GMT/09:00 ET – ECB’s Sleijpen (neutral – voter)

This article was written by Giuseppe Dellamotta at investinglive.com.