(Reuters) – Central bankers will keep investors on alert in the coming days, with the Bank of Japan, the U.S. Federal Reserve and the Bank of England set to meet next week, while Apple’s results will be eagerly awaited on both sides of the Atlantic.

Overview of the market outlook for the coming days:

1/ STUPOR AND TREMORS

The Bank of Japan (BOJ) likes to take the markets by surprise, and Halloween Tuesday is well-timed for a new monetary policy announcement from the institution.

While the bond markets are wavering, the Japanese monetary policy decision therefore carries risk: the soaring rise in US Treasury yields has brought with it Japanese bond yields, with that of the 10-year security breaking records every day over more ten years old.

The peak yield, at 0.885%, remains below the upper part of the 1% fluctuation band set by the BOJ, but this is partly explained by the central bank’s emergency interventions in the markets, at the rate twice a week on average. Without the BOJ’s interventions, swap markets suggest that yields on the 10-year would have reached 1.0863% in recent days.

Governor Kazuo Ueda insisted the bank would be patient in reviewing monetary policy measures but investors point out that he had argued for maintaining accommodative policy in late July, days before a relative but unexpected tightening , of this one.

2/ RESULTS

Apple will release its results on Thursday, the main business event of the week.

Apple, the world’s largest capitalization, is one of the Magnificent Seven, the seven technology companies whose performance has helped support stocks this year. But the stock has fallen sharply since the end of July, when the S&P 500 hit its highest level in 2023.

Previously released results from other companies in the “magnificent seven” group have attracted mixed reactions, with Alphabet and Tesla falling after the release of their respective figures.

The resilience of the American consumer will be highlighted when other results are published, including those of McDonald’s on Monday, Caterpillar and Pfizer on Tuesday, Mondelez on Wednesday, and Starbucks and Eli Lilly on Thursday.

3/FEDERAL RESERVE

Bruised US stocks will seek direction during the Fed’s next policy meeting on Wednesday, with the institution’s view on the state of the economy and rate outlook crucial for risky assets this year .

According to money markets, investors are betting on a pause in rate increases in November, but some traders believe that a further increase will be possible in December.

If policymakers signal their intention to keep rates at current levels through next year, US Treasury yields, which have already reached more than 15-year highs for 10-year maturities, could rise further. .

This rise in yields weighed on the S&P 500, which has fallen more than 10% since its peak in late July, although it is still up almost 8% for the year.

4/BRITISH UNCERTAINTY

The nine members of the Board of Governors of the Bank of England (BOE) will meet on November 2 for their penultimate meeting of 2023.

In one year, the situation changed completely: at the start of 2023, inflation was 10.1%, GDP increased by 1% over one year, and rates reached 3.5%. Today, growth has halved, rates are at 5.25% and inflation remains high, at 6.7%, well above the 4.3% reached in the eurozone and the 3.7% % in the USA.

The BoE, like other central banks, will insist that rates will not fall anytime soon. Right now, markets are almost certain there will be at least one, if not two, cuts next year, and the central bank may have to be firm to get the message across.

5/LUSTER OF CRYPTOS

Bitcoin has been gaining momentum recently, supported by the possible authorization by the US Securities and Exchange Commission of a bitcoin-backed ETF.

The cryptocurrency is nevertheless still trading at half the value reached at its peak, in November 2021, at $69,000.

The fraud trial of Sam Bankman-Fried, whose cryptocurrency company FTX collapsed a year ago, is also captivating industry observers.

(Graphics by Pasit Kongkunakornkul, Sumanta Sen and Vineet Sachdev, compiled by Karin Strohecker, Corentin Chappron, edited by Kate Entringer)

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