Major central banks' rate decisions to be markets' key focus this week

ANKARA

As Fed-driven volatility continues in asset prices, markets will focus on the many data releases scheduled for this week, especially US non-farm employment, as well as interest rate decisions from European central banks.

As for pricing in bond markets, the likelihood that the Fed will raise interest rates by 50 basis points in March remains on the rise, while Fed members continue to provide verbal guidance.

Atlanta Fed President Raphael Bostic, said in a statement to the Financial Times that a 50-basis-point increase in interest rates in March would be possible depending on inflation, while adding that three consecutive 25-basis-point hikes starting in March would be more likely.

Goldman Sachs projects five interest rate increases this year, up from its previous forecast of four, with the first hike expected in March.

The Bank Of England (BoE) is expected to raise rates by another 0.25% on Thursday.

As the BoE was the world's first major central bank to hike rates, market watchers will keep their eye on its statements about the future path of interest rates.

The eurozone is to publish data on fourth-quarter GDP and January inflation figures before Thursday's European Central Bank's (ECB) meeting.

The ECB is taking a different approach from the Fed and BoE, with its governor Christine Lagarde previously having said that the "conditions to raise rates are very unlikely to be satisfied in 2022."

She warned that raising interest rates too soon risked "putting the brakes on growth."

Analysts are not expecting any changes to monetary policy from the ECB this week.

Amid concerns on inflation and geopolitical risks, central banks are expected to tighten monetary policies more rapidly, an outlook that is negatively affecting investor risk perception.

Rising tensions between Russia and the West due to Ukraine have also caused volatility in stock markets.