1) US Federal Reserve: Expected to cut interest rates, potentially by 25 or 50 basis points. Traders will focus on signals for future rate moves. A significant cut could boost stock markets by lowering borrowing costs, but it may also indicate economic weakness, creating volatility.
2) Bank of Japan (BOJ): After its recent rate hike, markets await clues on further tightening. Any surprises could affect the yen and global markets, especially yen-carry trades.
3) Other Central Banks: Decisions expected from the UK, Brazil, South Africa, and more. Rate hikes or cuts will influence local stock markets and investor sentiment.
4) China: Facing deflation concerns. Any monetary moves will impact global commodities and growth-sensitive stocks.
Effects on Stock Market:
- Rate cuts generally benefit equities by reducing costs for businesses and boosting liquidity.
- Rate hikes, particularly by Japan or other major economies, could cause sell-offs in riskier assets.
- Uncertainty in China may weigh on global markets, especially in sectors tied to global growth.