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What to expect from central bank decisions this week


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This week, three major central banks are due to decide on their monetary policy path. First on Tuesday, the Bank of Japan, which will also publish its quarterly outlook report.

 Written by: Angela Barnes | Financial presenter/producer, London | Publication date: 

It will be followed by the Bank of Canada’s decision on Wednesday and the European Central Bank’s update on Thursday. IGTV’s Angela Barnes looks at what the market is expecting.

 

The Bank of Japan and the Bank of Canada

This week, three big banks - the Bank of Japan, the Bank of Canada, and the European Central Bank (ECB) - are going to make some important decisions about their money plans. Many people in the market think that the Bank of Japan will lower interest rates, which could be a sign that other banks might follow and lower rates too. But the people in charge have been saying that they need to be careful and work together so they don't cause any big problems by lowering rates too soon. The Bank of Canada is expected to keep their rates at 5% because there has been a recent increase in something called the headline CPI growth, which is a way to measure the cost of things going up. Inflation, which means when prices go up, is expected to be a little higher than what the bank wants until around 2024.

European Cenral Bank

On the other hand, the European Central Bank (ECB) is planning to keep their main interest rate at 4.5% and another rate at 4%. The President of the ECB, Christine Lagarde, has been hinting that they might lower rates sometime in the summer. Since January 19th, the value of the euro compared to the US dollar has been going up. And since Friday, the value of the Japanese yen compared to the US dollar has been going down. This shows that people think the Bank of Japan will keep doing what it's been doing with its money policy, which is called ultra-delicate.

 

 

 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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