Less than three weeks before the end of the year, we can observe growing nervousness on the stock markets. In the penultimate week before the Christmas holidays, key central banks are set to meet and investors are anxiously awaiting how significantly they will raise their key interest rates.
Index at the same levels as a month ago
Equity markets have been looking for a clear direction in recent days. The major global indices are virtually at the same levels today as they were a month ago. In the meantime, they have managed to strengthen, but they have given back their gains almost completely. However, in the last three months, there is a clear upward trend. The question now is whether I am at a turning point or whether the trend will continue.
Will central bank decisions affect stocks?
A relatively large risk is the meeting of the Federal Reserve, the European Central Bank and the Bank of England. All of these central banks are due to make interest rate decisions this week, which may strongly influence the stock markets in the coming weeks.
The Fed is expected to ease its tight monetary policy slightly, i.e. we are not expecting a fifth “hike” in a row by 0.75, but only by 0.5 percentage point. The ECB and the Bank of England are expected to raise rates in the same dimension, which could play into the hands of the stock markets.
