FTSE 100 Live: London markets hold their breath as US Fed and BOE decisions loom large

The latest updates on the FTSE 100 and London’s financial markets from City A.M.’s newsroom in the heart of the City of London.

Japanese stocks fluctuated post-BOJ stimulus exit, weakening the yen. Overnight, the Dow Jones rose slightly, while Asian markets, including Nikkei 225 and Chinese stocks, saw fluctuations amid BOJ uncertainty.

Rising Treasury yields boosted the US dollar to a two-week high, with spot gold trading at $2,160.51 per ounce. 

The Bank of Japan (BOJ) scrapped its negative interest rate policy, marking Japan’s first interest rate hike since 2007. The BOJ establishes a fresh short-term rate target within the range of 0 to 0.1% and plans to implement a 0.1% interest on reserves to incrementally raise rates.

Furthermore, the BOJ decided to abandon yield curve control (YCC), a policy established in 2016 to keep long-term interest rates near zero. 

The Reserve Bank of Australia (RBA) kept interest rates unchanged at 4.35 per cent, reflecting confidence in inflation despite economic slowdown.  

Oil prices dipped slightly due to expectations of increased supply from Russia, after recent gains supported by reduced exports and strong demand. 

All eyes on major central bank decisions, including the US Federal Reserve and the Bank of England. 

The Bank of England is projected to maintain rates at 5.25 per cent on Thursday, with market forecasts indicating a slower pace of rate adjustments compared to the European Central Bank and the Federal Reserve throughout the year. 

While it’s widely expected that the Fed will keep interest rates unchanged during its March 19-20 meeting, investors will be paying close attention to Chair Powell’s remarks and the Fed’s dot-plot, which maps out the anticipated future path of interest rates.