With little to support the economic calendar, today markets are concentrated on a number of Central Bank meetings following this week, meetings likely to set the stage for 2018.

Any monetary policy adjustments and the last interest rate decisions for 2017 commence on Wednesday at 19:00 GMT, starting with the widely anticipated FOMC, and are followed by ECB and BoE decisions on Thursday.

Fed to Raise Rates, Wednesday December 13th

On Wednesday, markets are expecting Fed Chair Yellen’s last announcement of the Fed Funds rate as she is to be replaced by Jerome Powell in February.

Markets are also expecting, with a 92% consensus, that the rate will increase 25 basis points, to 1.50%.

With the latest NFP exceeding the forecasted employment figure, however, with the average hourly earnings not, and core inflation slowing at 2.0% YoY, the US economy seems ready to rate-hike once again.

The graph below shows that Real Average Hourly Earnings fell less than Inflation, indicating consumer spending is likely to increase, hence, Fed’s decision to hike in order to control inflation may be taken at an appropriate time.

Since Policymakers rose the 2017 GDP Growth outlook at the latest Summary of Economic Projections back in November, but also in September, most analysts would agree that Fed has been too optimistic about the US economy, increasing the risk for a 2018 Yield inversion.