Morning Bid Europe: BOJ's hawkish hold

Novartis AG

28/04/2026 05:35

A look at the day ahead in European and global markets from Ankur Banerjee

In a week packed with central bank meetings, the Bank of Japan's hawkish hold has set the stage for the Fed, the Bank of England and the ECB to confront inflationary pressure as the war in the Middle East keeps oil prices well above $100 a barrel.

As widely expected, the BOJ left unchanged its short-term policy rate at 0.75% but three of the nine-member board proposed hiking borrowing costs, signalling policymakers' concerns over escalating price pressures from the Iran war.

That helped lift the yen just a bit to 159.02 per U.S. dollar but the frail currency remains perilously close to 160, a level that has previously led Tokyo to intervene in the currency market. The yen has been rooted around 159 since mid-March.

The move from the BOJ may give some near-term support but ultimately the yen is unlikely to firm too much, analysts say. In short, markets can expect a continuation of the "carry trade", using the yen as a cheap funding currency.

In geopolitics, the U.S. was reviewing Tehran's latest proposal to resolve the war in the Middle East but a U.S. official said President Donald Trump was unhappy with the proposal because it did not address Iran's nuclear programme.

The uncertainty around the two-month-long conflict will surely keep oil prices supported, with Brent crude futures LCOc1 at $109 per barrel, well above the pre-war levels.

Investors' attention this week is on earnings from tech giants and central bank meetings this week.

The Federal Reserve, Bank of England and the European Central Bank are all due to announce policy decisions this week. All three are expected to hold rates unchanged but attention will be on what policymakers say about inflation and growth.

Key developments that could influence markets on Tuesday:

French  unemployment data for March

Earnings: Novartis NOVN.S, Barclays BARC.L, BP BP.L and Airbus AIR.PA

How interest rates have changed among G10 central banks https://reut.rs/4tVi6VT

 (By Ankur Banerjee in Singapore; Editing by Jacqueline Wong)

 ((ankur.banerjee@thomsonreuters.com;; Mobile - +65 8121 3925;))