The central bank windfall continues today in Europe

The Fed and the BOJ continue to be at opposite ends of the spectrum, with the former sending a rather hawkish message to the markets that it is there to fight inflation. Meanwhile, the latter continues the same old statement while keeping monetary policy unchanged – which saw USD/JPY briefly break above 145.00 for the first time since 1998.

The central bank boon this week doesn’t stop there as we are ready to see the SNB and BOE step in later today.

The Swiss central bank is expected to raise interest rates by 75 basis points and bring its key rate back into positive territory from the current -0.25%. I would say the risks are up for this decision for any surprises.

Meanwhile, the BOE is expected to raise the key rate by 50 basis points to 2.25%, but the voting intentions and the opinions of policymakers in the process will be one to watch. The central bank is struggling to cope with soaring inflation and an economy heading into a long recession, so there’s a balance to be struck between tighter policy and eventually shutting it down.


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