The Bank of Canada and the European Central Bank are among the major banks that will announce their policy decisions this week.
And we start it today with the decision of the Central Bank of Canada, and expectations on the economic calendar indicate that the Bank of Canada will fix interest rates by 5%.
The current market split is zero for the motivation decision in the leaderboard, with market quotes indicating potential motivations by 46% and differing by 54%.
However, the market is confident that June will be the first month in which interest rates are fully priced for a cut with an 8% chance of interest rates being cut by 50 basis points.
The market also expects that by the end of this year, Canadian interest rates will reach the levels of 4.00% or 4.25% at the very least.
On the other hand, we are also waiting for the ECB's decision tomorrow, and expectations of fixing the interest rate by 4.5% as well.
As the prospects for a rate cut in March are very slim and priced by the market at 5%, traders shifted their expectations to June instead of March, and the most important question for the ECB will be whether to leave the door open for a move in April or not. This will be the main thing to watch in terms of language, and therefore the press conference that Lagarde will hold will be the most important.
Besides the Bank of Canada and the European Central Bank, there are also other central bank events to watch out for during the week, as Fed Chairman Powell will testify in Congress later today and tomorrow.
As for Friday, we will have a date with the US jobs report in the government sector.
