Who will cut rates first? What will the week bring?

The past week on financial markets brought many - often surprising - monetary decisions by major central banks. The Bank of Japan, after 17 years of negative interest rates, decided to increase interest rates last Tuesday. The Swiss National Bank unexpectedly loosened its policy, and the lower level of inflation in Canada makes the BoC another candidate for cutting interest rates in the near future. But are you sure?

The Bank of Japan reduces purchases

The end of the negative interest rate policy by the Bank of Japan was announced, but the BoJ's abandonment of the 0% target and the 1% upper limit for the yield of 10-year government bonds was accepted as the end of an era in the activities of the Japanese central bank. The BoJ will gradually reduce its purchases of commercial paper and corporate bonds and then complete the purchase program within a dozen or so months.

Much more attention was paid to last week's monetary decision FOMC. The Fed kept rates unchanged and did not change the pace of balance sheet reduction. Significantly, the US central bank has not changed the number of projected cuts this year - the Fed still sees three such scenarios. A strong labor market, promising forecasts of economic growth and the still unclear situation regarding the future path of inflation mean that the decision on a possible turn in the Fed's monetary policy will not be one-and-done.

The effect of Wednesday's Fed decision was new historical highs on the S&P 500 chart. Taking into account the PE valuation, the index is slowly becoming expensive, although in 2021 or 2020 in this respect, American shares were more expensive.

We invite you to meet the economist XTB Michał Stajniak, in which he will focus on the key topics of this week.

In today's webinar:

• What do the latest tell us? macroeconomic data?
• Will the Fed lower rates?
• What's next for USD?

WATCH ON-LINE

In addition, due to the very dynamic situation in the world, additional ones are available raports Video on the impact of war, pandemic and economic crisis on the global economy.

About the host

Michał Stajniak

Michał Stajniak - Raw Material Market Analyst in XTB. It places particular emphasis on the linkages between the behavior of commodity prices and the currencies of economies heavily dependent on exports of commodities such as oil, iron ore, gold and powdered milk. He is the author of frequent comments comparing commodity price indices with currency pairs such as AUDUSD, NZDUSD, USDCAD, USDNOK, or EURNOK. He represents XTB in the media (including TVN24 BIS, Polsat News, TVP Info, Bankier TV or Onet TV) and is the author of articles in the financial press such as Parkiet, Puls Biznesu and Dziennik Gazeta Prawna. He is a practitioner of the stock market and the derivative market. In his approach, he values ​​fundamental analysis above all, but often uses Fibonacci levels to determine the demand and supply zones needed in a Price Action strategy. A graduate of Quantitative Methods in Economics and Information Systems at the Warsaw School of Economics.

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