The biggest policy decision of the year? The first U.S. interest rate rise may trump it whenever it comes and the Swiss National Bank has set the bar pretty high but an awful lot hangs on what the European Central Bank comes up with today.
With six days until elections, the polls have been remarkably steady in Greece, giving anti-bailout Syriza a narrow but consistent lead that suggests this time next week it will be the largest party in parliament with a mandate to form a coalition government.
Volatility is back with a bang.
The Swiss franc leapt by an unprecedented 40 percent at one point after the Swiss National Bank scrapped its currency cap out of the blue. Oil may have bounced but it’s still down the thick end of 60 percent since mid-2014, dragging the rouble and other oil-producer currencies with it. Copper, generally a barometer of world industrial demand, is barely finding its feet after plunging this week.
Markets are beginning to ponder just how definitive the European Central Bank may be next week in launching quantitative easing. One reason is today’s ruling at the European Court of Justice.
German inflation figures for December will presage the euro zone number on Wednesday, together offering one of the final pieces of the jigsaw for the European Central Bank before its late January policy meeting at which it could commence a quantitative easing government bond-buying programme.
The last day of the year and all is quiet – but not for long.
Unless the price of oil bounces markedly or Vladimir Putin walks away from Ukraine thereby loosening western sanctions – both unlikely – Russia could be heading for a serious economic fall. Reserves are being burned defending the currency. They are sufficient for now but without hefty tax increases, public spending cuts and/or a higher pension age the outlook for 2016 and beyond is much gloomier.