4 central banks are about to shake up the markets

The week that has just begun is full of economic and financial insights, with many important central banks meeting.
From the Fed to the Bank of England, from Switzerland and Norway to Mexico and Turkey, the appointments with the highest monetary policy institutions of some key states are truly interesting.
And they could cause several shocks on the markets as they await clear indications on the cost of money and on inflation forecasts in the short to medium term.
Investors, then, are obsessed with a question that has become of great importance for global financial stability: will the Bank of Japan finally manage to exit negative rates? In this context, 4 central banks are ready to move stock markets and assets globally.
read also 2024 will be the year of rate cuts.
What's about to happen? 1.
Bank of Japan The Japanese central bank's two-day monetary policy meeting, starting March 18, may finally get to the heart of the much-discussed issue of ending negative rates.
Expectations are all for an easing of the only accommodative monetary policy remaining in force and for a review of the massive stimulus program supported so far by the BoJ.
Recent comments from bank officials, including governor Kazuo Ueda, also appear to signal an imminent end to years of ultra-loose monetary policy, although that is not expected to occur at the March meeting.
The markets expect a release by June, although there are different estimates.
A Reuters poll expects the Bank of Japan will abandon its negative interest rate policy and raise the key rate to 0% from -0.1% when it makes its announcement on Tuesday, March 19.
Same sentiment for Goldman Sachs, which sees the Bank of Japan raise interest rates for the first time since 2007 at its meeting on Tuesday, after stronger wage results and a series of news articles in recent days suggested that such move is really close.
2.
Federal Reserve The Fed meeting ending March 20 will serve to gauge policymakers' views on the timing of rate cuts, the resilience of the US economy and the possibility of an inflationary rebound.
Remaining strong employment and inflation data have prompted a reassessment of how far the central bank will lower rates this year.
Fed Funds futures are discounting around 80 basis points of cuts compared to the over 150 expected in January.
The update of the "dot plot", in which Powell and other officials predict the level of interest rates over the next 3 years, is the most anticipated issue of the meeting.
The previous estimate of three cuts in the cost of borrowing during 2024 could be called into question.
And this change has the potential to shake up stocks, bonds, the dollar.
read also Fed meeting, forecasts.
Three rate cuts in 2024? 3.
Bank of England The Bank of England is likely to take a cautious tone in its rate announcement on Thursday 21 March, awaiting more clarity on wage growth, which remains stronger than in the US or the Eurozone.
The BoE is expected to start cutting borrowing costs from 5.25% – the highest level since 2008 – in August, a Reuters poll showed, potentially trailing behind both the Fed and the European Central Bank.
It would be the fifth consecutive meeting in which the rate is kept unchanged, after 14 consecutive increases.
Prices in the swaps market – which reflect the BoE's forecast of the future level of interest rates – suggest that the first move lower will only come by August, with one or two further cuts by the end of the year.
Markets will remain alert to any changes in language regarding the BoE's bank rate being “under review” and any shift in the balance of votes.
And Wednesday's inflation data could lead to a last-minute rethink.
4.
Turkish Central Bank In Turkey, a new surge in inflation dashed policy makers' hopes that the recent tightening cycle aimed at supporting the lira's constant decline and combating strong price pressures had come to an end.
Expectations are therefore high again that the central bank will have to make another rate hike, perhaps up to 500 basis points at its meeting on March 21st.
This would happen at a delicate moment, with the country preparing for local elections on March 31st.
read also Turkey reels between the lira's plunge and inflation at nearly 70% “Pressure on Turkish politicians is intensifying ahead of the vote later this month, as capital inflows have slowed and foreign exchange reserves are running low again going down,” wrote analysts at Capital Economics.
“We doubt the central bank will raise interest rates this week, but we are increasingly convinced that at least one further increase will be made in the second quarter”