What to watch

A couple of very busy days coming up for markets with the highlight central bank decision from the FOMC (today), the ECB and BOE (both tomorrow).

• The FOMC decision at 19:00GMT this evening will be the highlight. Markets are fully expecting a faster pace of tapering. The FOMC signalling more than 2 hikes in 2022, or a hiking pace faster than 3 hikes per year, would be hawkish vs expectations. The full MNI Fed Preview is here.
• We have already seen UK inflation data surprising to the upside with CPI at 5.1% and core CPI at 4.0% (both three tenths higher than expected). This is unlikely to change tomorrow's decision, but should increase the pressure to hike next year when the Omicron uncertainty has declined. As we noted after the data release, the short sterling strip has moved lower on the open (comfortably underperforming the Eurodollar/Euribor strips) and the pound's move has been delayed too, waiting for short sterling to move lower before seeing a meaningful move.
• Elsewhere today we have final CPI prints from a number of Eurozone countries as well as US retail sales, import/export prices and Empire manufacturing.
• ECB Preview link.
• BOE Preview link.