All eyes on Fed, Trump and US-China trade talks

EVEN as markets wind down towards Christmas and New Year, there is plenty on the agenda this week - from interest rate hike forecasts to trade data - to keep investors on their toes.

The US Federal Open Market Committee meeting from Dec 18-19 is expected to end with the last interest rate hike for 2018, and investors will scrutinise its post-meeting statement for clues on what to expect for next year. The Fed's last median projection in September indicated there would be three hikes in 2019, but after more dovish comments from Fed chair Jerome Powell recently, markets are hoping for just one hike instead.

UOB's Global Economics and Markets Research team maintains its expectation of three hikes of 25 basis points in 2019, but said that the policy path will become more uncertain if the Fed shifts from its well-worn "gradual rate trajectory" rhetoric to place more emphasis on data dependency.