In Focus This Week: Central Bank Decisions

Everyone knows what is almost certain to happen, but now we have to wait for the main events and get a glimpse of what central banks are planning for next year.

The biggest event, of course, is the Fed meeting, with traders pricing in ~94% probability of a 25-basis-point rate cut on Wednesday. After that, a pause is expected in January. Therefore, market participants will certainly look for confirmation from the Fed and Powell regarding this scenario.

As for the Bank of England (BOE) and the Bank of Japan (BOJ), both central banks are expected to keep interest rates unchanged on Thursday. The BOE has been hinting at a pause for some time, while the BOJ last week gave almost certain signals of a similar decision through leaked information.

Although there are some important economic data releases in the coming days, the “central bank fiesta” is what still holds everyone’s attention. Otherwise, we would likely already be preparing for the Christmas holidays.

So, buckle up and stay focused a little longer. This is the last real trading week of the year.