Major central banks will hold policy meetings over the next 24 hours, with the Federal Reserve in the spotlight, but the Bank of Japan could surprise markets.
Global markets are fluctuating in an extremely narrow range, awaiting the Fed's interest rate decision early Thursday morning Beijing time. Everyone knows the Fed will cut rates by 25 basis points, but what Powell will say at the press conference and what the Fed's new economic forecasts will tell us are things that people are less sure about, so the market will be a little uneasy before that.
1. Chinese stocks rose slightly, seemingly in response to yesterday's news. Yesterday, Reuters quoted unnamed sources as saying that China plans to set an annual economic growth target of around 5% for next year and increase the budget deficit ratio to 4%. But after initially cheering for the change in policy tone, investors may be curious about the details and implementation of the stimulus policy.
2. The offshore yuan has further declined. Today's midpoint exchange rate set by the People's Bank of China is still nearly 1000 points stronger than market expectations—seemingly signaling a suppression of the depreciation rate rather than a reversal of the trend. After the Federal Reserve's interest rate decision, the yuan may make a directional choice.
3. The trends of the US dollar and gold are entangled. Unsurprisingly, there may be a wave of market movements before the Federal Reserve's interest rate decision, possibly a 'leakage market'.
4. The most important thing is that the US stock market closes tonight. The Dow Jones Index has fallen for nine consecutive trading days, setting a record for the longest consecutive decline since 1978. If it falls again today, even by more than 1%, it will bring panic to the global market.
