Monday 18 September – Eurozone CPI (yoy) came as expected 1,5%;
Tuesday 19 September for EUR – Germany Zew Survey expectation 32.4;
Wednesday 20 September for USD – Federal Open Market Committee Interest Rate decision;
Thursday 21 September for JPY – Bank of Japan Interest rate decision.
It’s no doubt that spotlight is on FOMC and BOJ. The FOMC is expected to keep rates on hold and to announce the tapering of its 4,5 trillion USD balance sheet. As always, the FED is preparing the market and makes its decisions predictable.
Analysts expect only one hike this year, most likely in December, and two hikes next year. The market will wait to see if any modifications occur on “dot plot.” Taking into consideration the rumors of no further rate rise this year, this will be a dovish signal by the markets.
For the BOJ things are simple because it is expected to leave its Policy Balance Rate and the 10-year Japanese government bond yield target unchanged, at -0.1% and around 0%, respectively. Personally, I don’t exclude a surprise in changing the target amount of Japanese government bond buying coming from the BOJ, even if it’s less likely.