Highlights
For this week, the focus is on the latest economic outlook on Wednesday from the US Federal Reserve, which is widely expected to hold interest rates steady after a two-day meeting amid still tight labor conditions and sticky inflation. Policymakers at the Reserve Bank of Australia are also expected to leave the key rate unchanged on Tuesday while patiently waiting for inflation to ease further. After maintaining its monetary easing patiently for a long time to guide inflation toward its 2 percent target from zero, the Bank of Japan board is now widely expected to end its negative rate policy and yield curve control.
On Monday, the US housing market index will hold steady in March after rising 4 points in February to 48, which was better than expected and tied to moderation in mortgage rates.
The Bank of Japan's nine-member board is expected to decide in a majority vote to end its seven-year-old yield curve control framework and lift the minus 0.1% short-term rate target to a range of zero to 0.1%, which would be the bank's first rate increase since 2007. The latest outlook is based on news that wage hikes for fiscal 2024 that begins next month are set to well surpass the pace of increase seen in the previous year.
The BoJ is expected to end targeting the 10-year bond yield at a certain level, currently around zero with a flexible upper limit of 0.1%, as the yield curve control framework has fulfilled its role of suppressing borrowing costs and turning around the stubborn deflationary mindset. The policy tool has been criticized for debilitating the normal pricing function of the bond market. The bank is also expected to revive the uncollateralized overnight interest rate in a range of zero to 0.1% as the main policy tool and apply a positive 0.1% interest on excess reserves parked at the bank by financial institutions, which had been in place before it was replaced in April 2013 by quantitative and qualitative monetary easing that initially targeted the sum of cash available for economic activity.
The Reserve Bank of Australia is widely expected to stand pat, leaving its policy rate at 4.35 percent for a third straight meeting after raising it by 25 basis points to 4.35 percent from 4.10 percent in November and having left rates on hold at its previous four meetings. Last month the RBA said its policy board expects it will take some time before inflation eases further from 4.1 percent and stabilizes in the target range of 2 to 3 percent.
On Monday, the US housing market index will hold steady in March after rising 4 points in February to 48, which was better than expected and tied to moderation in mortgage rates.
The Bank of Japan's nine-member board is expected to decide in a majority vote to end its seven-year-old yield curve control framework and lift the minus 0.1% short-term rate target to a range of zero to 0.1%, which would be the bank's first rate increase since 2007. The latest outlook is based on news that wage hikes for fiscal 2024 that begins next month are set to well surpass the pace of increase seen in the previous year.
The BoJ is expected to end targeting the 10-year bond yield at a certain level, currently around zero with a flexible upper limit of 0.1%, as the yield curve control framework has fulfilled its role of suppressing borrowing costs and turning around the stubborn deflationary mindset. The policy tool has been criticized for debilitating the normal pricing function of the bond market. The bank is also expected to revive the uncollateralized overnight interest rate in a range of zero to 0.1% as the main policy tool and apply a positive 0.1% interest on excess reserves parked at the bank by financial institutions, which had been in place before it was replaced in April 2013 by quantitative and qualitative monetary easing that initially targeted the sum of cash available for economic activity.
The Reserve Bank of Australia is widely expected to stand pat, leaving its policy rate at 4.35 percent for a third straight meeting after raising it by 25 basis points to 4.35 percent from 4.10 percent in November and having left rates on hold at its previous four meetings. Last month the RBA said its policy board expects it will take some time before inflation eases further from 4.1 percent and stabilizes in the target range of 2 to 3 percent.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.
