Political risk takes centre stage as Europe kicks off a busy 2017 election year with a Dutch parliamentary vote that could see a sharp swing to the ultra-right. And traders brace for the first in an expected series of rate hikes from the Fed. Sara Hemrajani reports on the week ahead for the global economy.
Investors on both sides of the Atlantic bracing for central bank and election news. In Washington, the FOMC kicks off its two-day meeting on Tuesday. With U.S. inflation and employment numbers ticking upwards, the signs are for Janet Yellen to announce another rate hike. (Soundbite) Justin Urquhart Stewart, Head of Corporate Development, Seven Investment Management, saying (English): "The economy can take actually another rate rise or two. Some are even talking about another one after that, but I think that's somewhat unlikely at the moment. But it's important these rate rises do occur, because when you look out to '18 and '19, that's when this economy could start slowing up and that's when the Fed will need to start cutting rates. But you can't cut rates until you raise them. So therefore this policy is likely to continue." Meanwhile the Bank of England's monetary policy isn't likely to rock the boat. Despite sharp price rises in the UK, policymakers are expected to hold steady on interest rates as Prime Minister May prepares to trigger Article 50. The EU is also in focus as the Dutch head to the polls on Wednesday. Mainstream parties jostling for power against Geert Wilders and the eurosceptics - a taster of what could happen in France next month. (Soundbite) Mike Ingram, Market Analyst, BGC Partners, saying (English): "Well the Dutch elections - even if it delivers a win by nationalists - isn't likely to move the dial significantly. There might be a bit of short term volatility, but ultimately you've got a pretty aggressive form of proportional representation in Holland." That's a lot to digest for the G20 finance ministers and central bank presidents when they meet in Germany at the end of the week.