Market Movers
Key event today will be the FOMC meeting. We expect the Fed to keep the federal funds rate target unchanged at 0.25-0.50% but focus will be on the accompanying statement, see Fed unlikely to risk tightening too much, too quickly , 25 January. We stress that we expect the Fed to make an attempt to be dovish by communicating implicitly that it will skip March as a possible hiking month and remain on hold in the current environment. Indeed, the Fed will not risk tightening too much but it will be a challenge to not disappoint with markets pricing only one full hike this year.
Reserve Bank of New Zealand policy meeting this evening: we - and consensus - expect the cash rate to be kept unchanged at 2.50%.
ECB's Mersch and Lautenschlager will be speaking today but are unlikely to talk down expectations that the ECB is prepared to cut again in March.
Swedish confidence survey results out, see Scandi Markets on page 2.
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