Three other G10 central banks to come – Commerzbank

And for those who still haven't had enough of central banks, there are three more meetings today. The first will be the Swedish Riksbank, which will announce its interest rate decision at 9:30 a.m., Commerzbank’s FX analyst Volkmar Baur notes.

Thee more central banks to watch

“We, the market and most economists expect the key rate to be cut by 25 basis points to 2.5%. The likelihood of a surprise is low, so it will probably depend more on how the Riksbank views the coming year. New forecasts and a new interest rate path should provide some clues here. The market currently sees the terminal rate in Sweden at around 2%. Should the Riksbank signal something more dovish, short-term SEK weakness would be likely.”

“Half an hour later, the Norwegian central bank will follow. However, interest rates are likely to remain unchanged. Here, too, the outlook for the coming year and when Norges Bank can imagine lowering interest rates for the first time in this cycle will be more important. We still expect March, as a change in the current rhetoric would be inappropriate given that inflation remains too high and the economy is stable.”

“The Old Lady from Threadneedle Street will then conclude. However, we do not expect the Bank of England to change the key rate so close to the end of the year either. Although yesterday's inflation reading was slightly below analysts' expectations, the stronger fiscal impulse expected next year has pushed up growth and inflation expectations, which is why the central bank will exercise caution today. This caution is likely to continue in the coming year, which should support the pound against the euro in 2025.”