Are you guys ready for the next roller coaster ride?
After the BOJ decision and Ueda press conference sank the Japanese yen, the focus on central banks will continue this week with the RBA (Tuesday), Fed (Wednesday), and ECB (Thursday) to come.
The RBA is expected to keep cash rate unchanged in a somewhat similar message to the month before, so the two more interesting ones to watch will be the Fed and ECB.
Powell & co. are widely expected to deliver a 25 bps rate hike but broader markets will want to look for clues about what they may do after May. That is arguably the most important detail when viewing all the central bank headlines this week.
Fed fund futures are pointing to there being no more rate hikes after this month, so is the Fed going to conform to that narrative? Or push back against the current market pricing?
As for the ECB, there's still a slight toss up between a 25 bps and 50 bps rate hike decision and it will come down to the Eurozone CPI data for April which is due on Tuesday. On the balance of things, it should support a 25 bps move but there might be some split views in the ECB that could keep markets guessing ahead of the Thursday decision.