BoJ interest rate decision awaited

Global markets completed last week with a buying-heavy trend as major central banks announced monetary policy decisions and a busy data agenda was followed, while eyes have now turned to the Bank of Japan's (BoJ) interest rate decision and the growth data to be released in the US next week.

Throughout the week, as central banks announced their final monetary policy decisions of the year, expectations that interest rate cuts could begin next year increased with the signals received regarding the upcoming period.

The Fed kept the policy rate unchanged at the 5.25-5.50 percent range, the highest level in 22 years, in line with expectations, while it was observed that the bank gave a dovish message for the first time after a long hiatus. The projections released by the bank revealed the possibility of a total of 75 basis points of interest rate cuts next year.

Following the decision, Fed Chair Jerome Powell stated that they believe the policy rate is likely at or near its peak in the tightening cycle, and conveyed that while bank officials do not find further interest rate hikes appropriate, they also do not want to take this possibility off the table.

In money market pricing, the probability of the Fed starting interest rate cuts in March is at 70 percent, and the probability of starting in May is at 95 percent.

Risk appetite in global equity markets increased as the Fed signaled that it could begin interest rate cuts next year and the released data supported hopes for a "soft landing" in the economy.

BoJ interest rate decision awaited

Next week, the BoJ interest rate decision on Tuesday, Japan's foreign trade balance on Wednesday, and Japan's CPI on Friday will be monitored.

Domestic eyes turn to the CBRT's interest rate decision

Next week, the Consumer Confidence Index on Wednesday and the interest rate decision to be announced by the CBRT's Monetary Policy Committee (MPC) meeting on Thursday will be followed.