Markets Steady Ahead of Central Bank Decisions, JPY Strengthens, Crypto and Commodities Rise

🌍 Summary:

Markets opened the week cautiously as investors brace for a series of central bank decisions that could shift global monetary policy. This week features a packed calendar, including Wednesday’s FOMC announcement, decisions from the Swiss National Bank and the Bank of England, and critical macroeconomic data such as UK CPI and U.S. retail sales.

Uncertainty around upcoming central bank decisions kept equities mixed, while commodities gained modestly. The Japanese yen strengthened ahead of the BoJ meeting, and bond yields dipped across regions as markets priced in dovish tones.

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🇺🇸 How Central Bank Decisions Are Impacting Currency Movements

• Equities: S&P 500 closed flat, Dow Jones -0.1%, Nasdaq +0.2%. Tech remained resilient ahead of Nvidia’s upcoming AI conference.
• Bonds: 10Y yields dipped to 4.23%, pricing in a cautious Fed stance.
• Dollar Index: DXY was flat at 105.50.
• Key News:
  • Fed blackout period continues; FOMC decision due Wednesday.
  • Markets price <10% probability of a June rate cut; eyes on dot plot and SEP.
  • Retail sales data due today; expected to slow (consensus: +0.2% core MoM).

🇪🇺 Global Equities Mixed Ahead of Central Bank Announcements

• Equities: Euro Stoxx 50 -0.4%, Germany’s DAX -0.3%.
• Bonds: 10Y German bund yields eased to 2.43%.
• Currency: EUR/USD traded near 1.0720.
• Key News:
  • ECB’s Villeroy said rate decisions will be gradual and data-dependent.
  • Eurozone CPI (Wed) expected unchanged at 1.9% YoY.

🇬🇧 United Kingdom: BoE’s Central Bank Decision and CPI in the Spotlight

• Equities: FTSE 100 -0.5% pressured by stronger GBP.
• Gilts: 10Y yield fell slightly to 4.15%.
• FX: GBP/USD rose to 1.2740.
• Key News:
  • CPI data due Wednesday, expected to cool to 3.3% YoY (vs 3.5% prior).
  • BoE rate decision Thursday – no change expected, but dovish risk increasing.

🇯🇵 Bank of Japan’s Stance Eyes Hawkish Turn

• Equities: Nikkei 225 +0.4%.
• Bonds: 10Y JGB yield dipped to 0.95%.
• FX: USD/JPY slid sharply to 156.50, strongest JPY level in two weeks.
• Key News:
  • BoJ meeting Tuesday: no rate change expected, but tone could shift hawkish.
  • Japanese exporters led stock gains as currency strengthened.

🇨🇳 Chinese Markets Decline Amid Ongoing Liquidity Concerns

• Equities: Hang Seng -0.7%, CSI 300 -0.6%.
• Yuan: USD/CNH held steady near 7.28.
• Key News:
  • No major economic releases.
  • Real estate stocks declined amid liquidity concerns.

🌍 EMEA & Emerging Markets

• Turkey: BIST 100 +0.4%, USD/TRY stable near 32.45.
• South Africa: JSE -0.5%, ZAR slightly weaker ahead of coalition gov update.
• Russia: MOEX +0.2%, RUB under pressure due to new EU sanctions rumors.

🛢️ Commodities React to Central Bank and Geopolitical Cues

• Oil: WTI +1.4% at $79.60; Brent +1.2% at $84.20
  • Saudi supply cuts and geopolitical tensions supported prices.
• Gold: +0.5% to $2,335/oz, supported by lower yields and safe-haven bids.
• Silver: +1.1% to $29.85/oz.