Central Bank Rate Decisions Take Centre Stage This Week

Danske Bank flags a central-bank–dominated week that should drive markets: the Fed (Powell’s likely final meeting), ECB, BoE, BoC and BoJ rate decisions will mostly be watched for guidance rather than policy shifts. Danske expects the Fed and ECB to hold policy rates steady, the BoJ to stay on hold but with conditions favoring a likely June hike (markets price ~50/50), and the BoE/BoC to remain unchanged. Elevated oil (Brent ~USD106.6/bbl) and Middle East tensions are adding upside inflation risks, widening divergence between the US (tech-led, equities at record highs) and Europe (lagging). Overall the note frames a neutral-to-cautious outlook: risk-on equity flows persist but regional divergence and higher energy costs are key risks for FX and bond markets (relevant for USD/JPY positioning ahead of BoJ guidance).