Bank of Japan and ECB. Will they take hold of the market spotlight?


The weekly economic calendar begins with the latest policy from the Bank of Japan. As inflation slows and wage growth slows, the central bank is expected to keep its negative overnight interest rate at -0.1%;

The focus is on suggestions from Governor Kazuo Ueda about when the central bank could exit the NIRP; the market expects movement in the second quarter of this year.


Ensuing the Bank of Japan report, next in line is The Flash Manufacturing and Service PMI readings of the euro zone, British and American indices give an idea of ​​how the business fared at the beginning of the year in a large part of the world in the treated area.

The data may support the euro, as it was also expected to be slightly higher than in the previous reading.

US PMI figures were still expected to be slightly lower, which could add pressure to the US dollar.

The Bank of Canada’s policy decisions are also closely scrutinized by market participants. In light of continued inflationary pressures, particularly from the core measure, the central bank is widely expected to keep the overnight target at 5.0 percent for the fourth consecutive meeting. However, the short interest market predicts the first 25 bp decline in the second quarter of this year.


The main focus of European central bank policy. It is the first policy meeting of 2024 on Thursday amid speculation about a rate cut, with the market pricing in five rates this year. The ECB’s base funding rate is 4.50% and remains unchanged at 4.50%.

Some politicians say the market is getting ahead of itself, and president Christine Lagarde has warned that too many tax cuts would not help the bank fight inflation.

US Q4 GDP preliminary estimate (first) is also the main release of the day. The data is expected to come in at 2.0 percent after the previous quarter’s 4.9 percent.

Jobless claims are also published on the same day, the data is expected to be 199,000 from 187,000 previously, which may have a negative impact on the dollar.


The US government will release the US PCE December deflator report, which should show evidence that inflation has slowed and possibly tip the scales towards the March rate.

Consumer Expenditure (PCE) measure. Notably, the final third-quarter GDP reading showed that core PCE output fell to 2 percent. Investors are likely to pay particular attention to this inflation indicator, which is central to monetary policy decisions.

Economists expect a more moderate increase of 0.2 percent compared to 0.1 percent last month.

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