Today’s spotlight is on the Federal Open Market Committee (FOMC) meeting in the US. Expectations are for the Fed to maintain its current monetary policy, but investors are eager for any hints regarding potential rate cuts and the winding down of quantitative tightening (QT). The Fed will also release updated rate and economic projections.

In the euro area, attention shifts to consumer confidence, which is crucial for predicting improvements in private consumption and overall economic growth.

The UK will release inflation data for February, with expectations for a decline in both headline and core inflation figures. However, these numbers are unlikely to sway the upcoming Bank of England meeting unless there are significant surprises.

In Sweden, Deputy Governor Aino Bunge will discuss the Riksbank’s perspective on cash, while Minister of Finance Elisabeth Svantesson will present the latest economic forecast.

Market Recap:

Overnight in China, loan prime rates remained unchanged, in line with expectations.

Yesterday, Germany announced a new military aid package for Ukraine, part of an existing support budget. Meanwhile, German ZEW data exceeded expectations, indicating ongoing economic challenges. However, with solid labor markets and improving global manufacturing, a steep recession is unlikely.

ECB Vice President Luis de Guindos hinted at a potential rate cut in June, citing wage growth and productivity concerns.

In Sweden, Deputy Governor Martin Flodén noted a trend of inflation returning to target levels.

Equities: Global markets saw gains, with the S&P 500 hitting a record high, driven by value and energy stocks. US indices closed higher, while bond yields declined ahead of the FOMC meeting.

FX: The Japanese yen weakened after the Bank of Japan’s first rate hike in 17 years, boosting USD/JPY. EUR/USD remained stable ahead of the FOMC meeting.

Related Post