US CPI and long-term interest rate trends are being closely watched as key market factors, while upward pressure on crude oil prices and a sharp rise in the yen are expected to affect the stock market. Expectations for an ECB rate hike and developments at the Bank of Japan’s meeting will also remain in focus.
Last week, major stock indices moved little overall, but long-term interest rates trended higher against a backdrop of US interest rate developments and turbulence in energy markets, at times weighing on share prices. In Japan, the yen’s appreciation put downward pressure on the Nikkei 225.
This week, the focus will be on the release of US CPI, long-term interest rate trends and crude oil price movements surrounding the tanker attacks. WTI crude is trading in the $92 range, and a further rise could also affect long-term interest rate trends. In addition, the ECB is expected to raise interest rates, with interest rate trends in Japan, the US and the UK expected to drive activity across the markets.
In Japan, the Bank of Japan’s monetary policy meeting is scheduled for 17-18, and a 0.25% rate hike is considered almost certain. As an external factor, long-term interest rates could move depending on US CPI and long-term interest rate trends, with the impact on share prices also a key market concern.