Fedspeak points to a rise in interest rates next month
Fed fund futures are signalling a 95 percent probability of a rate hike when the Federal Open Market Committee (FOMC) meets on December 14. A repeat of last year' lone rate hike is in the works for 2016. Donald Trump' election while surprising seems to have brought inflationary expectations that were a concern for the American central bank this year. The minutes of the last FOMC meeting will be released on Wednesday, November 23 at 2:00 pm EST and are expected to bring more insights into how close Fed members are to a rate move.
Emerging markets have seen the biggest losses of a Trump victory as a strong USD and trade concerns have hit assets. The Mexican peso (MXN) has depreciated 12 percent since the U.S. election result. The decision by the Mexican central bank to raise rates by 50 basis points managed to slow down the speed of the move, but not the direction.
The schedule economic events during the week of November 21 to 25 will not bring major revelations about the global economy. Political risk continues to be high as the transition of power in the U.S. kicks into high gear and will bring more transparency into the shape of the Trump presidency that starts on January 20, 2017.