Although the U.S. Federal Reserve is keen to leave interest rates on hold on Wednesday’s meeting, economic data released in the previous weeks showed improvement of the US economy, pressures US policymakers for an interest rate hike in September.
Federal Reserve estimation for a rate hike in September increased as the next move of policymakers should stabilize inflation rate. The question for a rate hike remains whether the Fed will have a single hike until the end of the year or a possible two rate hike before the end of 2016.
The meeting will take place on Tuesday-Wednesday, 26-27 of July.
BOJ Interest Rate Decision
The BOJ meeting on Friday might be a clarification for Shinzo Abe monetary policy plans. Abe won the elections on July 10th and as promised before, will continue his Abenomics stimulus program.
No change in interest rate is expected as current rate in Japan is in negative territory.
There are speculations that the fiscal BOJ stimulus program will be increased from 130$ billion to 390$ billion.
Europe Stress Testing
Europe stress banking test results will be published on Friday. The data could spread light on Italy and the European commission debt solution.
The Italian debt is currently €360 billion Euros and the data released on Friday might bring toa settlement of both sides.
On Thursday, ECB president Mario Draghi announced that ECB continues its stimulus program unchanged. However, Draghi hinted at the possibility of arrangement to Italian banks in order to improve their ability to lend funds.