US fiscal stimulus package is almost accepted, treasuries and dollar index rising while 2-week central banks decision storm is fast approaching. What to expect from the Central Banks against rising rates and for heating but still weak economy.
Bank of Canada (March 10)
BOC is the first central bank to have a meeting in this period. Governor Macklem will likely maintain the current program with possible tweaks.
European Central Bank (March 11)
ECB has surprised markets with both maintaining high forecasts and last week’s decreased PEPP purchases. The markets first will follow PEPP program plans. Will ECB use PEPP’s flexibility to haul some bonds early to stop yield surge or not? Second, will ECB change its short-term forecasts?
FED (March 17)
FOMC meeting will be held on March 16-17. Fed members probably won’t make any changes to their policy. Instead, the markets will be watching FED chair Powell’s speech. Powell will probably repeat that there won’t be any change in asset purchases for a long time and try to reassure the markets. Key points will be the answers of Powell about yield surge questions.
Bank of England (March 18)
The negative interest rates discussion is mostly over for the moment and BOE will not weigh too much on that. With the stimulative budget from Sunak and rising yields, BOE will probably ease the markets’ fears of tapering in the short-term. The markets will look for a hint about tapering for the end of the year.
Central Bank of the Republic of Turkey (March 18)
CBRT has already in tightening mode and raise the rates to %17 in the earlier months, and chair Agbal told that they will do more if needed. Since then inflation picked up with rising food and energy prices. PPI rose over %27 and signaling more increase in CPI. Will CBRT turn hawkish words into action or hold the same policy for the month? The markets and USDTRY will follow this decision.
Bank of Japan (March 19)
BOJ meeting will be held on March 18-19. Kuroda has said that the central bank is seeking to make its framework more effective rather than hauling more assets. But also BOJ will look at their yield target and may have to take more action.