Absolutely, you're right Matt, that next week is a huge week for markets and for the global macroeconomic picture. Not only do we get important monetary policy updates from the US, Europe, and the UK, as you say but we also get earnings reports from Apple, Google, Amazon, Meta, Ford General Motors, and many others. And US ISM, both manufacturing and services, JOLTs, job opening data and the January employment report for the US as well as Eurozone CPI estimate for January. A huge amount of information for markets to assess and a stark contrast to the relative quiets of the past week. Something clearly reflected in respect to volatiles surfaces.

Now firstly the dominant focus of the week is undoubtedly the Fed. Now while there are no updated dots or SEPs we'll have to wait until March for that. And the clear signs of a further reduction in the active policy increment, and ultimately a clear consensus expectation around a 25 basis point hike. The market will be actively focused on the Fed narative, surrounding the trade-offs between inflation and growth on the path of interest rates going forward. Now, we've discussed over recent months, our view that 25 basis points in February and a pause in March is our central bias as growth and inflation both decline into 2023.

Next week's FOMC will be a key step in the process as will the raft of key data, between the February and March policy meetings. We continue to see non-linear downside risks to demand through the rundown in pandemic excess savings, the negative wealth effects of declining house prices and even through the labor market via hoarding. Ultimately, however, the market reaction will depend on the FOMCs interpretation of the evolving balance of the growth and inflation risks. And thus their evaluation of the proximity of the sufficiently restrictive rates level that they are seeking. In Europe, it is likely much simpler stubbornly high core inflation led to the ECB to commit to a series of 50 basis point hikes at the December meeting and this intention has been subsequently reaffirmed by Lagarde and the senior governing council members Davos and beyond. Now, there is a possibility that QT discussions are more integral to the debate for future policy. But ile the trajectory of eurozone rates has very significant consequences for financial markets and adds positive inertia to the Euro it's likely that the ECB decision next week is the least likely to surprise on expectations.

Then finally we get the Bank of England where the policy decision is perhaps the most complicated as likely inferred by the three-way splitting, voting, unchanged 50 basis points and 75 basis points that we saw at the last NPC meeting. My personal view is more aligned with the Dhingra camp that's the current bank rate is sufficiently tight given the weakness in the economy and likely significant impact of past cumulative rate hikes, not to mention fiscal tightening and the impact of the inflation rate itself in damping future demand. The hawks would argue that the recent persistence in wage inflation and price components of other high frequency metrics argue for a further more forceful response from the bank. Now against this backdrop we expect Governor Bailey's proposition to be a hike of around 25 basis points. All three outcomes unchanged 25 and 50 are distinctly possible. We discussed this central bank preview further in this week's blog. But to reiterate, next week is a huge week for the monetary policy and macro backdrop evolution.