The main event is the Fed meeting tonight. Given the recent market turmoil, the Fedis likely to reiterate the ‘considerable time’ forward guidance and the ‘significantunderutilisation’ description of the labour market. We expect the Fed to end assetpurchases as has been signalled by several members recently and we only see 30-40%likelihood of the Fed mentioning the possibility of QE4. We have changed our Fedfirst hike forecast from April to June next year due to the lower inflation outlook andslower growth outside US.
In the euro area the ECB’s Bank Lending Survey for Q4 is due for release. After theECB’s Asset Quality Review and stress tests showed that supply side constraints oncredit growth should be limited, it will be particularly interesting to see whetherdemand for credit and loans continues to increase. In Q3 demand for credit and loansincreased but we could see some setback for enterprises in Q4 following the latestweakness in economic data.
Norwegian retail sales and business and consumer confidence will be in focus inScandinavia.
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