Interest rate rises on the horizon
The US Federal Reserve last night voted to hold its interest rates steady for another month - but signalled a likely rate rise when it meets again in December.
The central bank said US economic activity remains "solid" despite recent hurricanes - while it also predicted a rise in inflation in the medium term.
The move came as no great shock to markets, however, who all but predicted that exact outcome from this month's meeting.
"The expectations were that there was going to be no change with a definite increase coming in December, markets kind of anticipated that," said Aidan Donnelly, head of equity at Davy.
"There will be a December increase coming - probably another quarter point coming before the end of the year."
One modification the Fed did make was to improve their estimation of how the US economy has been growing - upgrading their language to 'solid' as opposed to the previous 'moderate'.
"It doesn't sound a whole lot of a difference but it is a slight difference and in Fed speak that's important for giving guidance towards the markets," he said. "We will probably see an increase now come through in December."
One other factor in the mix at the moment for the Fed is who will lead it from 2018 on - with reports suggesting that US President Donald Trump could name a successor to Janet Yellen later today.
That is expected to be Fed governor Jerome Powell, which Mr Donnelly says would largely mean a continuation of the path the bank is currently taking.
"He would be, ideologically, quite aligned with Yellen," he said. "Two things that will probably be slightly different is that we could see a step up in the amount of rate increases that we see but he would also be viewed as a little bit more pro-banking, so we could see a rollback of some of the regulation that Janet Yellen would have brought in under her chairmanship."
The Bank of England also meets today to discuss its own interest rates and, with inflation rising to 3%, there's a broad expectation of a rate rise. In recent weeks the question has been more 'when' rather than 'if', but it seems as though the markets have now decided that a shift will come at today's meeting.
"The markets at this stage believe there's going to be an interest rate increase today," Mr Donnelly said. "The governor of the Bank of England has to write a letter now every time the inflation rate is above 3% so he'll want to be seen to be doing something rather than having to write a letter every month to the chancellor.
Sterling strengthened overnight in anticipation of such a move - and according to Mr Donnelly the currency is unlikely to move further even if a rate rise is confirmed, as traders have already priced such an outcome in.
What a Bank of England move would mean, however, is that the European Central Bank is somewhat of an outlier in terms of western economies - given its decision to hold onto record low interest rates for the medium term.
It's recent rates meeting saw the bank cut bond buying to €30bn per month, but the programme was extended to September 2018 - meaning there is unlikely to be any rate rise in the euro zone for another year.
Mr Donnelly feels that the fact that the ECB is somewhat on its own will not add pressure to Mario Draghi - as its quantitative easing scheme will be allowed to run its natural course even if others are already on a different path.
"He's reduced and extended [bond buying], there's no guarantee that it's ultimately going to end next September and he certainly won't be increasing interest rates before that," he said. "We've seen that happening in the US where they unwind quantitative easing fully and then they start on interest rates and it's likely to be the same here.
"Europe came into this game a lot later than American in terms of quantitative easing so they're obviously going to come out the other side a lot later as a result."