Central Bank Extravaganza Persists as SNB and BOE Take Center Stage Later Today

Yesterday, after the Federal Open Market Committee (FOMC) meeting, it became clear that the Federal Reserve (Fed) might lower interest rates in June. The Fed’s projections, called dot plots, showed they might reduce rates by 75 basis points this year. Fed Chairman Powell also hinted at a likelihood of rate cuts, which is generally good for businesses and borrowing. As a result, the value of the U.S. dollar decreased, but people started investing more in riskier things, and the price of gold reached a new high. Gold’s price even went over $2,200 for a bit.

Today, the market is still reacting to the Fed’s meeting. The dollar is weaker, with the USD/JPY currency pair dropping a bit to 150.50. The Euro and British Pound have strengthened against the dollar.

In the stock market, the S&P 500 futures, which predict how the stock market will open, are up by 0.4% after reaching a new high yesterday. Technology stocks are doing well too, partly because the interest rates on U.S. government bonds, known as Treasury yields, have gone down a bit.

Looking ahead to today’s European market, we expect more updates from central banks, with the Swiss National Bank (SNB) and the Bank of England (BOE) scheduled to make announcements. I think the SNB might have some surprises, while the BOE’s update might not have much new information. If there aren’t any big surprises, the market should stay pretty calm.

People will still be talking about the Fed’s meeting and its effects. Also, there will be new PMI data (which shows how well the business sector is doing) from Europe, which might interest those trading in euros. The chances of the European Central Bank (ECB) cutting rates in June are already quite high, about 86%.