Afternoon Market Update – 14/12/2016 – by Jaz Singh

Markets are in a timid mood this morning as we anticipate the Fed’s expected rate hike later today. Focus shall be on Yellen’s forward guidance and the extent to which the Chair dampens down inflation expectations for the next 12 months. The dollar index is flat for the session and is likely to remain so until Chair Yellen’s press conference. Elsewhere in FX markets we see sterling extending its losses from yesterday. This comes after a House of Lords report states that the City could lose 200,000 jobs if the UK cannot seal a transitional deal over access to the single market. Cable trades near the 1.2650 level, with David Davis, the Brexit minister, facing MPs’ questions this afternoon. Stocks have retreated today, with Euro Stoxx 50 declining 0.6 percent and the DAX falling from the 11300 level. US equity futures are also pointing to declines at the cash open. Other than the Fed this evening we have retail sales and producer price data from the US this afternoon on the data slate. Also, keep an eye out for Donald Trump’s twitter account for a potential reaction to the FOMC’s decision and statement; any remarks from the President elect have the potential to lead market sentiment.