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Interest Rate Sensitivity Increases Ahead Of Central Bank Decisions

By CMC Markets (Michael McCarthy)Market OverviewJul 30, 2018 09:49
au.investing.com/analysis/interest-rate-sensitivity-increases-ahead-of-central-bank-decisions-200198406
Interest Rate Sensitivity Increases Ahead Of Central Bank Decisions
By CMC Markets (Michael McCarthy)   |  Jul 30, 2018 09:49
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Originally published by CMC Markets

Differing reactions to growth data suggest investors are still sensitive to potential interest rate moves. European shares rallied after weaker French numbers, while US stocks dropped after GDP showed the US economy growing at better than 4% pa. Interest rate decisions from the US Federal Reserve, the Bank of Japan and the Bank of England this week could be driving the moves.

The US dollar strengthened around 0.5% against the euro last week, reflecting better growth prospects. The Bank of England is the only central bank expected to lift rates this week, but all eyes are on the Bank of Japan’s Yield Curve Control policy and any moves to allow ten year bonds to trade higher from the current 0% target. Any news this week that speaks to growth, inflation or wages, and therefore central bank intentions, may see a stronger than usual market response.

Futures are pointing to a weak start for Asia Pacific share markets. However this week’s packed market calendar may moderate today’s action. China PMI’s, Australian construction data and Japanese industrial activity numbers headline the local releases. European investors will examine inflation indices and in the US the ongoing reporting season is capped by the release of non-farm payrolls on Friday night.

In Australia Rio (AX:RIO) is the first major to reports. On consensus analyst are looking for earnings of around US $2.50 per share. ResMed (NYSE:RMD) and Janus Henderson (NYSE:JHG) will also release numbers ahead of the first full week of annual and semi-annul reports starting next Monday.

Interest Rate Sensitivity Increases Ahead Of Central Bank Decisions
 

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Interest Rate Sensitivity Increases Ahead Of Central Bank Decisions

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