While this may well be the most important week for capital markets in the past 9 years, when the Fed is widely expected to hike rates on Wednesday, precisely 7 years to the day since it cut rates to zero, the week sets off with a quiet start today with just the Euro area industrial production reading due out this morning and nothing expected out of the US this afternoon.

The focus on Tuesday morning will be in the UK where we get the November CPI/RPI/PPI docket. Euro area employment data and the German ZEW survey are also expected. Over in the US tomorrow afternoon, the November CPI print is the main focus (headline expected at 0.0% mom, core +0.2% mom), while average weekly earnings, empire manufacturing and the NAHB housing market index are also due.

Wednesday is PMI day where we’ll get the December flash manufacturing, services and composite numbers for the Euro area, Germany and France. UK employment data is also due, along with the final reading for Euro area CPI. Over in the US on Wednesday the November housing starts and building permits data is due, along with industrial and manufacturing production, flash manufacturing PMI and also capacity utilization. The main focus will be the conclusion of the two-day FOMC meeting and Yellen press conference.

Here is DB's quick summary of Wednesday' main event:

This time last year we were convinced that the Fed wouldn't raise rates in 2015. We'll it looks like we'll be proved 15 days wrong. However with all that's going on in the world and with global nominal growth so low, it's hard for us to imagine they'll get very far in their hiking cycle. We suspect that the terminal funds rate will be lower than the market expects and certainly lower than the Fed expect. Assuming they do hike and that the US HY story doesn't escalate quickly and stop them in their tracks the main story will be how dovish they make the hike. It's hard to think they'll be hawkish given the current global uncertainty and the carnage in the $1.3tr US HY market.

And here is BofA:

Like the markets, we expect the Fed to raise interest rates by 25bp in December. We doubt the Fed will be able to satisfy expectations for a "dovish hike," however: the market has priced in just over two rate hikes next year and a much lower terminal rate. The FOMC is likely to stress a gradual pace of rate hikes and there may be dovish dissent. Yet we do not expect a significant decline in the dot plot or explicit forward guidance; the Fed will remain data dependent. Markets may selloff modestly on the announcement, but it should not trigger a sharp tightening of financial conditions.

Unless, of course, as even Hilsenrath hinted, the Fed is merely hiking just so it has the green light to ease shortly thereafter, either back to ZIRP or to NIRP alongside even more QE.

Early Thursday morning starts in Japan with the November trade numbers. That’s before we get the German IFO survey data and UK retail sales. In the US initial jobless claims, conference board’s leading index and the Philly Fed business outlook are all due. Closing out the week on Friday in Asia will be the latest China property price data and MNI business indicator reading along with the BoJ monetary policy decision.

There’s nothing of note in the European session on Friday while in the US we’ll get the flash services and composite PMI’s, along with the Kansas City Fed manufacturing activity index. Fedspeak wise we’re due to hear from Lacker on Friday evening.

Source: DB and BofA