This week in the markets: all eyes on interest rates as central banks meet on either side of the Atlantic and in Japan.
Interest rates have lost some of their capacity to move markets, but central bank policy remains a key driver of share prices.
Investors have long accepted that we have reached peak rates in the current tightening cycle and that the next move is down, in the English-speaking world anyway. What remains unclear is the timing of the first cut.
This week sees rate decisions from the Federal Reserve, Bank of England and Bank of Japan. The first two central banks are likely to sit on their hands again as they wait for clear evidence that inflation is under control. In the case of the Bank of England it will be the fifth no change meeting in a row after 14 consecutive rises from the end of 2021.
In Japan meanwhile the question is when interest rates start to head the other way. Japan is an outlier among the world’s central banks in its persistence with negative interest rates. But that is a position that is becoming more difficult to sustain as…
