Markets Brace for Central Bank Decision Marathon

This week brings a major central bank lineup, with decisions from the Bank of Japan, Federal Reserve, and Bank of England all set to arrive within a 32-hour window, keeping market activity subdued in anticipation.

The Bank of Japan’s decision is the most unpredictable, with market sentiment split between a 60% chance of a 10-basis point hike and a 40% chance of no change. A lack of action could undermine recent yen gains, with potential resistance around 155.30 near the 100-day moving average.

The Federal Reserve is expected to maintain rates at its Wednesday meeting, with only a 5% chance of a cut priced in. Markets will watch closely for any signals hinting at a potential move in September.

The Bank of England’s decision remains finely balanced, with odds almost evenly split on whether it will cut rates. GBP traders are also digesting comments from new Finance Minister Rachel Reeves, who outlined plans for spending cuts or tax hikes to fill a £22 billion budget gap left by the previous government. Focus will also turn to the upcoming autumn budget announcement on October 30.