Three central-bank decisions on three consecutive days

The next fortnight’s dates are already published. The Federal Reserve’s committee meets on 27–28 October¹. The ECB’s Governing Council meets in Frankfurt on 28–29 October, with a press conference on the 29th². The Bank of Japan decides on 30 October³. That puts three of the world’s most closely watched rate decisions on three consecutive days.

Current pricing is calm for October and firmer for December. CME FedWatch put an 82.8% probability on the Fed holding rates this month, but about 93.6% on a hike in December³. For the Bank of Japan, swaps priced less than a 5% chance of a 25 basis point rise to 1.50% on 30 October and about 80% for 18 December, according to Brown Brothers Harriman³. For the ECB, a December hike to 2.75% is widely expected⁵. Over the weekend, President Christine Lagarde said the sell-off in sovereign bonds was raising borrowing costs and making it harder than the ECB had projected for households and firms to absorb energy bills⁵.

Currencies are quiet so far. At Monday’s European close the euro was at $1.1204, down 0.31% on the day, and the dollar at ¥158.51⁴. USD/JPY held near 158.50 in Tuesday’s Asian session³. BoJ Governor Kazuo Ueda said underlying inflation is rising very close to the 2% target. He warned that long-term yields could rise if markets think the bank is not raising rates at the right pace³.

A central bank that says what it is watching makes your decisions easier than one that surprises you. Two have said so already: Lagarde named energy bills and borrowing costs, and Ueda named wages, prices and long yields^3,5. This week’s data will show which of those still matter on decision day.

Nothing here is advice.