Ipek Ozkardeskaya
Swissquote Bank Ltd
The Federal Reserve’s (Fed) rate cut talk is getting chaotic and frankly, hard to follow. After the Fed signaled a possible end to its monetary policy tightening campaign and the European policymakers refused to adhere, some Fed members including John Williams and Raphael Bostic pushed back the Fed cut expectations.
But anyway, investors could give the Fed doves the benefit of the doubt until Friday’s PCE data. The PCE, the Fed’s favourite gauge of inflation, is expected to show a further decline in both headline and core inflation.
Elsewhere, the Bank of Japan (BoJ) will announce the year’s final policy verdict on Tuesday. The BoJ Governor Ueda’s comments, two weeks ago, that the BoJ’s policy would be hard to maintain from the year end had triggered expectations that the BoJ will finally say goodbye to negative rates. There is nothing more than a slim probability for the BoJ to exit negative rates this week, but investors are eager to hear further details about how and when the BoJ will leave the negative rate territory.
Concrete details regarding the BoJ’s policy plans and/or changes in BoJ’s inflation outlook could cause swift moves in yen markets, which became very volatile since Ueda hinted that something is cooking in his kitchen.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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