Take Five: New kid, old block
(Reuters) -The week ahead is rammed with rate setting meetings by heavyweight central banks from the U.S. Fed to the Bank of England, from Switzerland and Norway to Mexico.
But one question is dominating markets — will the Bank of Japan finally gear up to exit negative rates?
Here is your week-ahead look at global markets from Rae Wee in Singapore, Lewis Krauskopf in New York and Dhara Ranasinghe, Bill Schomberg and Karin Strohecker in London.
1/WILL THEY, WON'T THEY?
The two-day monetary policy meeting of Japan's central bank beginning Monday could — at long last — very well be 'live', after months of false alarms and eager anticipation.
The stars are finally aligning for a move away from negative interest rates and an overhaul of its massive stimulus programme, following Japan Inc's hefty pay bumps at this year's annual wage negotiations.
Recent comments from BOJ officials, including Governor Kazuo Ueda, also seem to signal an imminent end to years of ultra-loose monetary policy, even if it doesn't happen in March.
Markets are priced for an exit by June. Investors have positioned to benefit from selling of short-dated paper since a rise in central bank deposit rates would quickly draw banks' capital out of bonds and into cash. But it's a guessing game, and only time will tell.
2/TIMING THE REBOUND
Wednesday's Fed meeting is all about gauging policymakers' views on the timing of rate cuts, the resilience of the U.S. economy and the possibility of an inflationary rebound.
Robust jobs and inflation data has prompted a rethink of how much policymakers will lower rates this year. Fed funds futures price in around 80 basis points of cuts from more than 150 priced in in January.
That hasn’t stopped a rally that’s
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