Data releases will meanwhile give clues to the robustness of other economies, some of which are seen as vulnerable to investment outflows as higher interest rates make US assets more attractive — especially in emerging markets.
Forecast-beating numbers on Saturday showing Chinese industrial output growth picked up to a five-month high of 6.2% in November signalled that stimulus measures from Beijing may be steadying the world’s second-largest economy.
China’s wobble has been a major uncertainty for the global outlook.
Sunday’s second-round French regional elections saw far-right first-round victor Marine le Pen’s National Front defeated by tactical voting while attracting a record number of votes.
Attention now turns to Spain’s general election on December 20, which polls suggest no party will win outright.
After unexpectedly strong readings in November, the monthly Ifo and ZEW surveys are expected to show German business and economic morale remain relatively robust although they may fall short of last month.
Flash PMIs for France, Germany, and the eurozone are due tomorrow, hours before the Fed announces its decision.
Thursday’s survey of French business sentiment will be the first taken in the eurozone’s second-largest economy since the attacks that killed 130 people in its capital on November 13.
Tomorrow also brings the final reading of November eurozone inflation.
Franklin Templeton’s star bond investor Michael Hasenstab said recently that higher US rates would magnify differences between emerging market economies in 2016, although he said concerns about a “systemic crisis” were exaggerated.
Mr Hasenstab said stronger economic fundamentals should make countries such as South Korea, Mexico, and Malaysia resilient but that weaker Turkey and South Africa, both of which have hefty current account deficits, could be more negatively affected.
South Africa’s rand slumped to an all-time low on Friday following the finance minister’s sacking.
The currency rebounded yesterday after a U-turn by President Jacob Zuma saw Pravin Gordhan installed as the country’s third finance minister in a week — his second time in the post.
The Fed remains the week’s star attraction, however, even if after two and a half years of speculation about policy tightening, and several false starts, most recently in September, its first, modest hike is unlikely to cause any major ripples.