Central banks take centre stage with five of those overseeing the 10 most heavily traded currencies – including the U.S. Federal Reserve – holding rate-setting meetings, plus a swathe of emerging market ones as well.
Whether it’s the United States or Europe, investors suspect this global rate tightening cycle is nearing an end. That doesn’t mean worries about potentially sticky inflation will keep rates higher for longer. And a hawkish tone from Fed chief Jerome Powell could keep Treasury yields elevated, dulling the allure of stocks further but supporting the dollar.Interest rate decisions in the U.K.
Norway’s central bank is also expected to nudge benchmark borrowing costs higher, following a 25 bps rise in August to 4 per cent. Money market bets on whether Switzerland will raise, or hold at 1.75 per cent, are evenly split.Recent comments by Bank of Japan Governor Kazuo Ueda set a fire under Japan’s government bond market, sending benchmark yields soaring above 0.7 per cent for the first time in almost a decade.
Some surprised BOJ watchers hypothesize that his shift was brought about by the yen’s slide to a 10-month trough at 147.875 per dollar, which started to worry Japan’s Ministry of Finance. But for Turkey’s central bank, convening on Thursday, the only way is up. Grappling to put monetary policy back on an orthodox track after years of President Tayyip Erdogan pushing for lower rates despite soaring inflation, analysts see policy– makers lifting the benchmark to 35 per cent by year-end from 25 per cent now.