Next Week’s News Today: It’s The Big One

A decision about interest rates doesn’t get any bigger than the one that the US Federal Reserve will make next week.

After nearly ten years without raising the cost of borrow, the US rate-setting committee is expected to pull the trigger on Thursday. The market is expecting a hike, albeit a tiny one. But will it be a case of “better to travel than to arrive or  the market hates uncertainty” that rules the day when the decision is made?

Prior to the rate decision, the world’s largest economy will report inflation numbers for November. The headline numbers have, at best, been anaemic. However, core inflation, which excludes volatile food and fuel costs, has been above 1.6% for the last 12 months.

Sticking with interest rates, Japan will make a decision on the cost of borrowing next week. It is likely that the Bank of Japan keeps them at 0%. Other central banks that have interest-rate decisions include Thailand, the Philippines, Indonesia and Taiwan.

One swallow does not a summer make, but China will be hoping that house prices have finally stabilised. Last month, the average price of new homes in 70 Chinese cities rose for the first time since August 2014. The gains were not evenly spread with Tier-one cities, such as Shanghai and Shenzhen, recording double-digit rises.

Closer to home, Singapore’s retail sales have been up and down like a yo-yo this year. In September, they were down 3.7%, while in August they were up 5.4%. On a year-on-year basis though, sales growth has been in the steady mid-single digits. Staying with Singapore, the Garden City will also be reporting Non-oil Exports and unemployment numbers.


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