Global markets prepare for a week of central bank action
Stocks in Asia were subdued on Monday as investors looked ahead to a week of central bank meetings, with the Bank of Japan, the Federal Reserve, and the Bank of England all expected to raise interest rates.
The Nikkei 225 in Japan fell 0.3%, while the Hang Seng index in Hong Kong was down 0.2%. The S&P 500 futures were flat, while the NASDAQ 100 futures were up 0.1%.
The dollar was slightly stronger against the yen, but weaker against the euro and the pound.
The Bank of Japan is expected to keep its policy settings unchanged on Tuesday, but markets will be watching for any hints about future policy moves. The central bank has been under pressure to raise interest rates, but it has so far resisted doing so.
The Federal Reserve is expected to raise interest rates by 0.25 percentage points on Wednesday. This would be the third rate hike of the year, and it would bring the Fed’s benchmark interest rate to a range of 1.5% to 1.75%.
The Bank of England is also expected to raise interest rates on Thursday. The central bank is facing growing pressure to raise rates in order to combat inflation, which is running at a 40-year high.
In addition to the central bank meetings, investors will also be watching for economic data from China and the United States. China is expected to release data on industrial production and retail sales on Tuesday. The United States is expected to release data on consumer spending and inflation on Friday.
Key developments that could influence markets on Monday:
- ECB board member Isabel Schnabel, ECB Vice President Luis de Guindos and ECB chief economist Philip Lane are all speaking
- U.S. stock and bond markets are closed, while the NAHB housing market index for June is due
Overall, markets are expecting a week of volatility as investors await the outcome of the central bank meetings and economic data releases.