Sujata Ro shows us the future.

Hard to believe, but just one month ago the Fed’s first rate increase was expected in January 2023. Goldman Sachs, (NYSE:), is one of those who now forecasts a hike next month. It comes a full year after the U.S. central PCE index — which Fed officials consider the most important inflation measure — was 4.4% annually.

A euro zone rate rise in July? It’s highly unlikely that headline inflation will rise to 4.1% in July, but it is fully priced.

It’s a thrilling week for central banks watchers. With the Fed likely announcing an increase in its taper policy, Bank of England a rise in interest rates, and Norway announcing the second hike of this year, it is a great week to be a bankwatcher. Most interesting is the Reserve Bank of Australia, which may revise its guidelines after its 3 year bond yield soared past 0.1% last week.

After rising by 90 bps last Wednesday, bond markets appear calmer. The yield has fallen to 22 bps this morning.

After an unexpectedly positive election win for Fumio Kirishima, stock markets rose 2.3%. European shares have opened higher, and Wall Street futures point north.

Analysts are optimistic about company results. Ryanair, which reported its first quarter profit since COVID-19, and Pandora, the jewellery brand, raised sales and improved profit margin outlook for this year.

But there isn’t a shortage of growth obstacles. After the disappointing U.S. Q3 GDP forecast last week, there was another reminder from China Monday. Factory activity declined for the second consecutive month while German retail sales fell 0.9% year/year, compared to 1.8% growth predictions.

BofA has a fascinating nugget that points out how mentions of supply chains issues in Q3 earnings calls increased 412% year over year.

(For graphic on supply chain mentions – https://fingfx.thomsonreuters.com/gfx/mkt/zdvxormoapx/supplychains.PNG)

Markets should be more informed by key developments on Monday

Biden will promote Glasgow’s ‘largest climate investment’

Asian factories get out of lockdown, but now they face supply headaches

China lowered oil prices by predicting it would increase gasoline and diesel supplies

France warned Monday by Britain that it would not allow France to continue in its fish row

-International Energy Forum conference starts – 2 days