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Michael McCarthy's The Week Ahead: Can the Fed soothe the markets and stop a bond market rout?

This week once again, it looks like bond market action could dominate the landscape. We’ll be hearing from the US Federal Reserve on Thursday night when it’s open market committee meets. While it’s expected there will be no change to interest rates, it’s very likely we’ll hear further words from the Federal Reserve, trying to soothe markets around their concerns with inflation.  

Although we’ve had coordinated messaging from central bankers around the globe, bond markets continue to express doubt. The big sell-off that we saw, once again, in US bond markets on Friday is flowing into Asia-Pacific trading at the beginning of this trading week. That’s having a big impact on share markets and there was a big rotation away from technology and other higher growth sectors in trading on Friday night and back towards those blue chip stocks that will benefit from the reopening of economies across 2021.  

We’ll also be watching Bitcoin markets very carefully after Bitcoin set a record high over the weekend trading above $61,000 USD and we’re expecting further volatility in crypto markets and potentially other coins setting new record highs, playing catch-up with Bitcoin. We’ll also see a lot of data this week that has the potential to move markets and anything that has to do with inflation or prices could be particularly market sensitive, given that ongoing argument about the outlook for interest rates. There’s a whole list of data that could move the market. To see the full list and analyst forecast for those readings, go to the market calendar on the CMC platform 

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