Later tonight, the UK is releasing its monetary policy decision. This is quite an important decision for the UK economy, particularly in a post UK referendum world. The economy has remained rather resilient since the vote, but inflation is starting to rise, mainly due to a devaluation in the pound since the vote. Inflation is in danger of spiking even further, but central bank members are wary of raising interest rates too quickly as that can spark a recession.

In the early hours of the morning, the US Fed Reserve raised interest rates by 25 basis points, the second rise in rates since the GFC. While markets and experts expected the rate rise, what possibly took many by surprise was the hawkish tone of the Fed regarding future monetary policy. Fed Chair Janet Yellen said the central bank was looking at raising rates three times next year, as the incoming President, Donald Trump, as flagged huge tax cuts and infrastructure spending. This has raised concerns from the central bank of the possibility of a spike in inflation. As one of the charters of the Fed is to help control inflation, rising interest rates is one tool to help achieve that goal.

On the announcement front, it is quite a busy day. These announcements include:

Australia – Unemployment Rate & Employment Change

Japan – Flash Manufacturing PMI

Switzerland – SECO Economic Forecasts, Libor Rate and SNB (Swiss National Bank) Monetary Policy Assessment

Europe – German Flash Manufacturing & Services PMI, European Flash Manufacturing & Services PMI and Long Term Refinancing Operation

UK – Asset Purchases Facility and Retail Sales

Canada – Manufacturing Sales

US – CPI & Core CPI, Philly Fed Manufacturing Index, Unemployment Claims, Current Account, Empire State Manufacturing Index, Flash Manufacturing PMI and NAHB Housing Market Index