Last week saw an array of comments from various central bankers trigger further strong gains in financial markets, with bond yields in Europe reaching all-time lows and the main stock market in the US hitting all-time highs.

Last week saw an array of comments from various central bankers trigger further strong gains in financial markets, with bond yields in Europe reaching all-time lows and the main stock market in the US hitting all-time highs.

The Bank of England has cut its growth forecast for Britain’s economy to zero for the second quarter of 2019 on and has highlighted risks from global trade tensions and growing fears of a no-deal Brexit.

Given the financial markets' increasing focus on global monetary policy, this week contains some key events for them to digest, with central bank meetings in the US, UK and Japan.

A year ago, the European Central Bank took advantage of a temporary uptick in prices to declare victory in its fight to bring eurozone inflation up to its target of “below, but close to, 2%” writes Daniel Gros.

The Organisation for Economic and Cooperation Development (OECD) issued its latest update on the state of the world economy last week.

Central banks’ goal of an inflation rate close to 2% will not be achieved, and the reasons why are not obvious, says Daniel Gros

The past number of years have been characterised by a widespread loosening of monetary policy in many countries and a scaling back of rate-hike expectations in economies where policy tightening had been expected to commence. This is now changing.

There is an eerie calm about financial markets at present. Currency and bond markets are quite range bound, while world stock markets hit new record highs in the past week.

For now, the global winds are at Japan’s back.

Several of the world’s top central banks will meet in the coming week, but only one, the US Federal Reserve, is set to start a final countdown on the second most anticipated event of the year after the presidential election.

The past few years have been characterised by a widespread loosening of monetary policy in many countries to counteract very weak inflation and sluggish economic growth.

A move by the Bank of Ireland to dissuade large companies from parking €10m or more in short-term deposits is a “defensive” strategy for the lender in an era of rock-bottom interest rates, a leading economist has said.

Royal Bank of Scotland — which is owned by the UK — has told more than a million business customers that it may have to impose charges on deposits, which would make it the first British bank to introduce negative interest rates.

Japan’s main bank lobby has hinted that the country’s central bank was right to keep monetary stimulus unchanged yesterday, saying that sending negative interest rates even lower would hurt the industry.

We have seen a strong rally across financial markets in recent months, with both risk and safe haven assets making ground.

The euro has generally had the upper hand against the dollar this year, climbing from $1.08 to as high as $1.16 at one stage, despite the further loosening of monetary policy by the ECB, including cuts to interest rates.

The fragile tone to sentiment on financial markets this year has carried over into May.

A leading economist recommends investors should buy the bond debt of the so-called eurozone peripheral nations, such as Portugal, Spain and Italy, as market participants predict that ECB rates could stay at ultra-low levels for a decade.

Despite a considerable amount of volatility on financial markets and diverging trends in US and eurozone monetary policies, the key euro-dollar rate has remained quite range-bound over the past year, largely trading in a $1.06 and $1.15 corridor.

On Thursday, the markets widely expect the ECB to move its official deposit rate deeper into negative territory, cutting it to possibly as low as -0.5%.

Haruhiko Kurodaand and Mario Draghi may be among the few economists who still think negative interest rates are a good idea.

Risk-off sentiment has dominated financial markets year-to-date, largely driven by concerns over the health of the global economy and doubts about central banks’ policies, especially negative interest rates.

Last year proved to be a difficult one for global investors. 

Central banks continue to surprise with their aggressive actions to counteract global forces that are threatening the recovery in the world economy and that are risking a prolonged period of very low, or even negative, inflation.

European stocks posted their biggest two-day gain since October 2011 on increased investor confidence that central banks will act to support markets.

Flanked by interest rate decisions in Britain, Japan and Australia, the IMF’s annual meeting in Lima takes centre stage this week, with policymakers focusing on China’s economic slide and its impact on the rest of the world.

When the Federal Reserve drove its target interest rate near zero in late-2008, it sparked an economic debate about the risks of having nowhere lower to go, and in particular the financial bubbles it might stoke.

Japan’s exports slowed for a second straight month in August in a worrying sign that China’s economic slowdown could deal a damaging blow to the world’s third-biggest economy and force policymakers to inject fresh stimulus before too long.

The dollar fell after the Federal Reserve last night held off on raising interest rates. The US central bank declined to boost its short-term interest-rate target at a policy-setting meeting, opting to delay an increase amid stubbornly low inflation, an uncertain outlook for global growth and recent financial market turmoil.

Japan’s economy shrank at an annualised pace of 1.6% between April and June as exports slumped and consumers cut back spending, adding pressure on prime minister Shinzo Abe to step up his policy drive to lift the economy out of decades of deflation.

Nikkei’s $1.3bn (€1.18bn) purchase of the Financial Times from Britain’s Pearson marks the culmination of decades of attempts by the Japanese household name to break into mainstream English-language media.

With the US Federal Reserve expected to leave interest rates on hold this week, the market will be focusing on policymakers for clear signals on when the central bank will make its first interest rate hike in nearly a decade.

Japan’s economy is likely to shift to an expansionary phase this fiscal year due to improvements in domestic demand, exports and a windfall from last year’s decline in oil prices, the Bank of Japan’s chief economist has said.