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SEB Bank analysts points out that the US Fed will present its first updated forecasts after its U-turn in Jan on Wednesday and will be a key event for markets this week.

Key Quotes

“We expect relatively small changes to its economic forecasts but “dot plots” to shift from two hikes in 2019 to unchanged rates.”

“Given the dovish market pricing (5bps rate cut by end-19), this should have limited impact on markets and we see risks to US rates being biased somewhat on the upside.”

“In light of our expectations of an improving outlook we stick to our forecast that the #Fed will deliver a final rate hike in June.”