Pressure Builds Ahead of Major Central Bank Marathon

It's a huge week for central banks with the Bank of Japan (BOJ), Federal Reserve (Fed), and Bank of England (BOE) set to deliver their decisions within a 32-hour window. Market activity remains largely subdued in anticipation.

The BOJ’s decision is the most unpredictable. Current market sentiment suggests a ~60% likelihood of a 10-basis point hike and a ~40% chance of no change. A lack of action could undermine the yen's recent gains with a potential resistance at 155.30 (100 MA).

The Fed's announcement is scheduled for Wednesday. Market expectations for a rate cut are just 5%. Investors are keenly awaiting any signals regarding a potential move in September.

Finally, the Bank of England has the market guessing with an almost 50 –50 chance for a cut. GBP traders are also digesting a key speech from the new finance minister Rachel Reeves in which she unveiled plans for some spending cuts/ or tax increases to fill a £22bn spending shortfall that was 'covered up' by the Conservative government. Traders now also have 30th October to look forward to as the date of the autumn budget.