Global Markets

The latest Personal Consumer Expenditures (PCE) figures came out today and showed that inflation continued to moderate in November

Fed raised by 50bps. Less aggressive, but higher TR upped to 5.1 (4.6). Fed chair was hawkish. ECB even more hawkish than Fed. 50bps ongoing and QT announced. Hawkish ECB is a more convincing case — more ground to cover, but more difficult to deliver because of the fractious nature of the bank. BoE delivered 50 bps and was the least hawkish of the three. There was a three-way split:…

Inflation is moderating, yet the Fed remains aggressive in policy. We attribute a reason for this to the tight labour market.

Last week’s dot plots suggest rates will move higher, with the terminal rate adjusted upwards from 4.6% to 5.10%. The Fed chair’s tone during the media conference was hawkish. Risk markets were less than impressed. They sold off heavily for the rest of the week. The market thinks that Fed policy is too aggressive.

Both central banks slowed the pace of their tightening cycle this week, while delivering hawkish message and guidance, but the ECB appears to have been more aggressive

Watch today’s US Open for commentary on the latest policy decisions by the Fed, the BoE and the ECB

The Bank of England slowed the pace of hikes with an 0.5% adjustment, in a three-way split decision and hinted at more tightening, but guidance is vague

The US Federal Reserve moderated the pace of rate increases, with a 50 bps move on Wednesday, but now expects rates to peak higher and Chair Powell delivered a hawkish message

Watch today’s US Open for commentary on the CPI inflation figures and the upcoming policy decision by the central banks of the US, the UK and Europe

In this week's podcast, FXCM senior market specialists Nik and Russ discuss central banks' potential pausing. In addition, the two analysts discuss the inflation data, specifically the CPI release, which precedes the Fed's next rate hike by a day. Moreover, the BoE and ECB will hike on Thursday, with all three central banks expected to deliver 50bps. All these and more.

Watch today’s US Open for insights into Wall Street’s effort to stop the five-day slide, the 2022 lows of USOIL, the latest policy decision by the Bank of Canada and more