The fact of FED raising interest rates tonight is almost certain. We should not ask when and how big this hike will be. The question is different: How will FED raise the hikes. The most important will be the message of Janet Yellen during press conference, it will influence market expectations for 2017 about normalization of monetary policy in US.

Data from Japan and China

At night markets got to know a lot of data from Japan, the most important were published late at night – industrial production in November. October’s result was revised down to 0.0%, expectations for November were at 0.1% MoM but the final score was flat – 0.0%.

Early in the morning investors had opportunity to know Chinese M2 supply data and new credits. In this second case the score was better than before and market’s expectations – 794.6B.

Macro calendar for today

This session will be dominated by US. The only other important will be unemployment rate from UK and Eurozone industrial production. In the afternoon we wait for US retail sales and EIA crude oil stocks change. In the evening there will be FED decision and Janet Yellen conference – the most important one this year.

Conference more important than hike itself?

Markets are so sure about today’s hike that there is a possibility that after this decision USD will not move at all. More important will be press conference half an hour later when Janet Yellen will read PolMon statement, economic projections and also will answer to journalists’ questions.

The most important will be dot plot – economic projections of certain FOMC members about interest rates in the future. They can suggest how many hikes we should expect in the next year. Probably FED will still base probability of hikes on future macroeconomic data, especially from job market.