Central bank bonanza continues this week

After the Fed last week, the central bank bonanza will carry on this week with the RBA and BOE set to announce their latest monetary policy decisions on Tuesday and Thursday respectively.

Both central banks are expected to deliver 50 bps rate hikes with implied rates suggesting ~92% odds for the RBA to deliver such a move while odds are ~84% for the BOE. That highlights the risks going into the key decisions later in the week.

With the Fed not taking their foot off the pedal just yet, both central banks should carry on with a similar narrative. However, the window is arguably closing for the BOE to stay on this path as the economy is running into the ground amid the cost-of-living crisis.

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