Wednesday preview: Federal Reserve, Wizz Air in the spotlight
All eyes will be on the US central bank in the middle of the week as it signals the start of normalising the extraordinary emergency measures put in place in the wake of the pandemic.
Barclays Research expects the Federal Reserve will signal its intention to hike short-term interest rates by 25 basis points when its policymakers next meet in March.
The Fed's quantitative easing meanwhile is seen winding down by mid-March although there is "some risk" that the monetary authority would stop QE in February instead, the investment bank says.
However, running-off its balance sheet was not expected to occur until the Fed's July meeting.
Economists at Bank of America however expect the Fed to show greater aggressiveness, including by winding up its asset purchases in February and by signalling that every Fed meeting in 2022 will be "live". The latter means that an interest rate hike could materialise at any of them.
BoA is projecting a total of 99 basis points of interest rate hikes over the course of 2022.
"The key question for the markets is: will the Fed give them a breather or keep moving? We tend to lean toward the latter.
"We see several ways for the Committee to turn: acknowledge they hit maximum employment, signal omicron is at least as much a supply as demand shock, suggest optimism about the growth outlook despite omicron, or note price pressures have continued for longer than expected and could still have room."
No major economic releases are scheduled in the UK.
On the corporate side of things, Wizz Air Holdings is among those that are due to update investors.
Analysts at UBS have penciled-in third quarter sales of €463m (consensus: €469m), for a loss before interest and taxes of -€172m (consensus: -€191m).
In a research note sent to clients, UBS analyst, Jarrod Castle, said that investors' focus will be on the carrier's outlook for trading in the fourth quarter of its fiscal year and forward bookings over Easter and Summer 2022.
Wednesday 26 January
Hargreaves Services, Scancell Holdings
QUARTERLY EX-DIVIDEND DATE
Marsh & Mclennan Cos Inc.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Durable Goods Orders (US) (13:30)
MBA Mortgage Applications (US) (12:00)
New Homes Sales (US) (15:00)
Wizz Air Holdings
AJ Bell, JPMorgan Elect Managed Growth Shares, Renew Holdings
Brewin Dolphin Holdings, DP Eurasia N.V. (DI) , Pets at Home Group , Sage Group
UK ECONOMIC ANNOUNCEMENTS
BRC Shop Price Index (00:01)
FINAL DIVIDEND PAYMENT DATE