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Doubts rise over BOJ hike
Will the BOJ set the stage for a more conventional monetary policy and hike rates, after years of low or negative interest rates.
Major tech companies report earnings & Investors focus on their forward guidance after last week's earnings miss.
Crude prices fell to near two-month lows, shrugging off any risks of escalating Middle East tensions.
BOJ
After years of negligible and even negative interest rates, the Bank of Japan appears to be setting the stage for a return to more conventional monetary policy, likely leading to a gradual increase in Japanese interest rates.
Markets are pricing in a 64% chance of a 10- bps hike, keeping yen traders on edge.
Reducing bond purchases by the bank can indicate a shift towards tighter monetary policy. Under its yield curve control policy, the BOJ manages long-term interest rates. If yields are too low, scaling back bond purchases may be necessary to let them rise slightly, promoting a healthier yield curve.
Continuously buying bonds expands the BOJ's balance sheet and increases financial risks.
BOE
Most analysts anticipate a 25-basis point cut, but money market pricing indicates only a 50/50 chance of such a move. The limited public statements from the Bank underscore both the uncertainty and the likely narrow margin of the vote.
Earnings
A slew of tech giants are to report earnings this week, with investors closely eyeing their forward guidance especially after last week’s earnings miss.
Oil
Crude prices fell, trading near two-month lows due to ongoing concerns about demand in China, the world's largest crude importer. Meanwhile, traders largely ignored the potential risk of escalating conflict in the Middle East.
Brent was last seen near $78 and WTI near $74.50.
