• The central bank bonanza heats up this week
• It’s not just major central banks that will be in focus this week
• The bond market is in the spotlight
• ECB’s Kazimir says cannot rule out further rate hikes
• Goldman Sachs lowers BOE terminal rate forecast to 5.50%
• China says yuan will show ‚positive changes‘ against dollar after ‚bottoming out‘
• China central bank and forex regulator meets with foreign financial institutions
• SNB total sight deposits w.e. 15 September CHF 473.0 bn vs CHF 468.9 bn prior

Markets:

• USD little changed
• European equities lower; S&P 500 futures down 0.2%
• US 10-year yields up 1.6 bps to 4.338%
• Gold up 0.1% to $1,926.46
• WTI crude up 0.6% to $91.30
• Bitcoin up 2.9% to $27,194

It was a quiet session overall as markets look to get settled into the new week, playing a bit more of a waiting game ahead of key central bank policy decisions still to come.

There will also be a host of major economic data and all eyes will be on the economic calendar in the days ahead, leaving little to work with for now.

As such, major currencies are still caught in relatively narrow ranges with little incentive to really move. Dollar pairs are tightly bound so there isn’t much to really touch on in the FX space.

In other markets, oil continues its impressive form with WTI crude inching above $91 while bond yields are also holding up with 10-year Treasury yields right on the cusp of a breakout to its highest levels since 2007.

Equities on the other hand are stuttering now ahead of the US open, after a relatively calmer session in Europe. The UAW strike is still a factor for US stocks, so keep that in mind as we get into the thick of things to start the new week.

This article was written by Justin Low at www.forexlive.com.

After the relatively calmer mood throughout European morning trade, US futures are now starting to take a bit more of a hit on the day. S&P 500 futures are now down by 0.2% with Nasdaq futures down 0.3%. That is keeping a drag on the softer mood in European indices as well as we look towards the session ahead.

Just be wary that the UAW strikes are still an issue and that is one negative factor that is weighing on sentiment ahead of the return of Wall Street from the weekend later.

This article was written by Justin Low at www.forexlive.com.

The PBOC is out with some comments noting that China will improve its policies and create a more market-oriented and international-level business climate. I would look past the smoke and mirrors here as the meeting seems to involve the forex regulator for some reason. Also, there are plenty of things going on behind the scenes in China right now. Not least after this report from last week:

• PBOC calls on banks to hold off on immediate dollar purchases – report

This article was written by Justin Low at www.forexlive.com.

The latest results from Reuters‘ poll on economists on the SNB ahead of the policy meeting decision this week:

• 30 of 37 economists expect another 25 bps rate hike this week
• The majority then sees the SNB keeping rates unchanged at 2% until at least middle of next year

As the Fed and ECB also move to the sidelines, other major central banks will also feel compelled to do so amid a slowdown in global economic conditions. I think the SNB can manage that quite well as inflation pressures are not as high and stubborn compared to other countries. If anything, it will be more interesting to see how the BOE manages this particular tightrope in this week’s meeting communique.

This article was written by Justin Low at www.forexlive.com.

• Residual differences remain between central bank communications and market expectations
• Current build-up of leveraged shorts in Treasury futures is a vulnerability worth monitoring

These are already well in the consideration of market participants, without needing to be said really. It is all part of the bigger picture narrative as seen here.

This article was written by Justin Low at www.forexlive.com.