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“The markets are pulling back ahead of the Fed and the next couple of days is going to be pretty volatile,” said Daniel Pavilonis, senior market strategist at RJO Futures, in a Reuters report.
The US central bank is widely expected to raise interest rates by 50 basis points at its final meeting of 2022 scheduled on Dec. 13-14. The European Central Bank and the Bank of England are also set to announce interest rate decisions this week.
Data on Friday showed US producer prices rose slightly more than expected in November, reinforcing the view that the Fed may have to keep interest rates higher for longer. Focus now shifts to the US consumer price index (CPI) report for November, which is due on Tuesday.
“Ahead of the key data print, the current strength of the market would be tested on a break below $1,765, a level where support was found on several occasions last week,” said Ole Hansen, head of commodity strategy at Saxo Bank.
US Treasury Secretary Janet Yellen on Sunday forecast a substantial reduction in inflation in 2023.
(With files from Reuters)