Markets look ahead to a busy week dominated by three G7 central bank meetings, which may cause turbulence.
- There are three major central bank policy meetings scheduled this week: the US Federal Reserve, the Bank of Japan, and the Bank of England. No rate changes are seen as likely, with the strongest chance being a rate hike from the Bank of Japan. The Bank of Japan will be closely watched as it will now claim inflationary pressures are strong enough to begin really moving away from its ultra-dovish monetary policy. The Japanese Yen made huge gains last week and is up today so far against almost all major currencies.
- Stock markets finally saw a recovery on Friday after a week of steady losses. Asian stocks have followed US markets higher, with firm gains seen today in major Asian indices. Both the Nikkei 225 Index and the HSI are up by more than 1.5% today.
- Some big tech earnings releases which are due this week could be important for the performance of the NASDAQ 100 Index, which has recently underperformed broader market indices.
- In the Forex market, since today’s Tokyo open, there has been very little price movement. I see the Japanese Yen as likely to be the most important major currency, at least until the Federal Reserve’s meeting later this week, with the AUD/JPY currency cross in focus.
- It is likely to be a quiet day in the market, as it is a Monday and there are no scheduled high-impact economic data releases today.
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