A look at the day ahead in European and global markets from Tom Westbrook
Investors’ attention looks set to switch, briefly, to monetary policy for the rest of the week, from its usual recent fixation with trade and politics.
The Federal Reserve is up first, later today, followed on Thursday by the Bank of England, Sweden’s Riksbank and Swiss National Bank.
All but the SNB are expected to leave rates on hold, as the Bank of Japan did earlier in the day. The focus will fall on how far they might signal their policy intentions or their sensitivity to the recent market gyrations around U.S. tariffs and the prospect of slowing growth.
Ten-year Treasury yields have fallen 25 basis points since the Fed last met in January, barely a week after Donald Trump’s inauguration as president.
The S&P 500 is down about 7% and gold is notching record highs almost daily – the latest at $3,038 an ounce. [.N]
Markets are priced at zero chance of a rate cut today, followed by about a 15% chance for a cut in May and a 65% chance for June.
The Bank of Japan kept interest rates steady, playing for time, and markets had little immediate reaction.
It’s not as though things are quiet on the geopolitical front.
Israeli airstrikes have shattered the relative calm in Gaza, killing more than 400 people on Tuesday.
Trump’s phone call with Russia’s Vladimir Putin drew agreement to stop attacking Ukrainian energy facilities – short of the 30-day ceasefire the U.S. has been pressing for.
Political intrigue has also deepened around the high-profile sale of CK Hutchison’s ports business.
The company, owned by billionaire Li Ka-shing, agreed to sell assets, including those near the strategically important Panama Canal, to a group led by BlackRock in a deal cheered by Trump but attacked in Chinese state-owned media.
Indonesian stocks stabilised after a sudden selloff on Tuesday.
Ahead of the Fed, final European inflation data is due.
Earnings reports are expected for financial services firms in London as well as Tencent and Ping An – in focus as China’s markets have surged.
Key developments that could influence markets on Wednesday:
– Earnings: Tencent, Ping An, Hargreaves Lansdown, Prudential, M&G
– Economics: Final Eurozone CPI
– Policy: Federal Reserve policy decision
(By Tom Westbrook; Editing by Edmund Klamann)
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