Partially bouncing back from Friday’s US index declines of 0.7%-0.9%, US index futures are up 0.2%-0.3%. Major European indices are in the red across the board this morning with the FTSE and Dax both down 0.3%-0.4%. In commodity action, natural gas is up 10.1% with a big winter storm sweeping across North America, while WTI Crude Oil is flat and Copper is down 1.2%.
Today is relatively quiet for business news with the main event being Bank of Canada Governor Macklem speaking around 3:30 pm EST. Still, today could potentially become a day of positioning with a lot of potential fireworks. The main event is Wednesday’s FOMC meeting where the US central bank is expected to slow the pace of its interest rate increase program to 0.5%, but the member forecasts for GDP, inflation and particularly interest rates may also impact sentiment, particularly hints related to how high interest rates could go and how long rates may remain elevated. Following the Fed on Thursday, the European Central Bank, Bank of England and Swiss National Bank are also holding meetings so by the end of the week, we may have more insight into how central bankers are feeling heading into 2023.
Starting with tomorrow’s US consumer price index report, it is also a busy week for economic news. Inflation and the pressure on central bankers to remain hawkish remains at the top of the agenda. Retail sales, industrial production and housing reports are also on the way. Friday brings flash PMI reports and is also Quadruple Witching Day with a multitude of futures and options contracts expiring.