How will the Fed and BoJ react to the global risks? – Commerzbank

By FXStreet FXStreet (Córdoba) – In the coming week, the focus will be on the Fed and the Bank of Japan. According to Thu Lan Nguyen, analyst at Commerzbank Amid the global risks, both are likely to adopt a waiting stance at their monetary policy meetings. “As speculation about further monetary easing in Japan has grown recently, the JPY should profit from this”.

Key Quotes

“Just how worried is the Fed about the current market turmoil (falling oil price, capital flight in China, general weakness of the emerging markets)? Market participants will be hoping for an answer to this question next week when the Fed Open Market Committee convenes.”

“While Fed chair Janet Yellen will not hold a press conference after the meeting, the statement should contain first signs of how confident US central bankers feel about their growth and inflation outlook and thus about continuing the interest rate hike cycle. The majority of investors currently expect the Fed to take quite a long break on rates now, with only one more rate rise presently priced in for this year.”

“Even if the Fed looks less optimistic next week given the global risks, this will merely confirm market expectations and therefore hardly weigh on …read more

Source:: FX Street