The U.S. Fed is widely expected to cut interest rates, while both the European Central Bank and the Bank of Japan are expected to hold rates steady on Thursday.
Traders are also watching U.S. President Donald Trump’s Asia trip for any signs of an improved relationship with China.
Indian bond markets are stable as rate cut expectations rise before the RBI’s December policy meeting. Favourable economic indicators like low inflation and steady growth support monetary easing. Investors can consider allocating to corporate bond funds with up to five-year maturities. Tactical duration exposure via dynamic bond funds is also advised. A 12-18 month investment horizon is ideal.
Trump said in a speech in South Korea, where he is scheduled to meet Chinese President Xi Jinping on Thursday, that he thought they would get a “great deal” done for both sides.
Sources told Reuters that China’s state-owned COFCO bought three U.S. soybean cargoes this week in another sign of easing tensions between the world’s two largest economies.
“Markets appear to be in a wait-and-watch mode with a busy calendar ahead. Focus is on the Fed and ECB meeting, Trump-Xi summit and a host of earnings releases this week,” said Mohit Kumar, chief strategist for Europe at Jefferies.”For the Fed today, we expect a 25 bp cut and an end to QT (Quantitative Tightening). Powell would not have a lot of data to back any strong conviction for the future outlook,” Kumar added.The German 10-year bond yield, the benchmark for the euro zone bloc, was little changed at 2.62%.
Italy’s 10-year yield edged 1 basis point lower to 3.39%. Germany’s 2-year yields, which are more sensitive to expectations for ECB monetary policy, were also little changed at 1.98%.