MUFG Research discusses its expectations for this month's major central banks meetings.
"December is packed with key central bank decisions that could certainly fuel increased FX volatility into year-end. Again, based on the above assumption on Omicron, we expect the FOMC to signal the need for a faster taper of QE but downplay the implications for rate hikes," MUFG notes.
"The FOMC announcement on 15th December will then be followed the next day by the ECB and BoE meetings. We expect the BoE to hike rates by 15bps to 0.25%. Covering the three-day period 15th/17th December, across G10 and EM there will be no less than 12 central bank announcements. This could prove a volatile period for the financial markets especially given the Fed appears determined to confirm a speeding up of the QE tapering at the FOMC meeting," MUFG adds.