Global financial market enters a super central bank week, bond traders will be looking for sell signals from policymakers' statements.
This week, several major central banks around the world may provide investors with new reasons to sell government bonds, as policymakers have to face the risk of inflationary impacts from war. The Federal Reserve, the European Central Bank, as well as the central banks of Japan, the UK, and Canada will all announce their interest rate decisions, meaning that the G7 will all have policy decisions that will affect the economies that make up nearly half of the global economy. Although investors expect these central banks to maintain interest rates, the market remains vigilant to signals from officials such as Federal Reserve Chairman Jerome Powell and ECB President Christine Lagarde, such as concerns over inflation threats due to the US-Iran conflict causing the biggest disruption in crude oil supply in history. If there are any concerns and speculations suggesting policy tightening in the coming months, it could have a negative impact on government bonds. In recent weeks, as traders seem to have shifted their focus away from war, stock markets and credit markets have risen, but government bonds have underperformed other assets. The Bank of Japan will hold a meeting on Tuesday, the Federal Reserve and the Bank of Canada will hold meetings on Wednesday, and the ECB and the Bank of England will hold meetings on Thursday.
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