# Marketmind: RBA shock hike starts huge week for central banks Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-05-02 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: RBA Shock Hike Kicks off Big Week for Central Banks Meta Description: Stay ahead of major central bank meetings with insights from Kevin Buckland. RBA's surprise rate hike sets the tone for the week. Full analysis here. URL: https://financedigest.com/marketmind-rba-shock-hike-starts-huge-week-for-central-bankshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-05-02t044710z1lynxmpej4103srtroptp4global-markets-view-asia-1736814083619-compressed.jpg) # Marketmind: RBA shock hike starts huge week for central banks A look at the day ahead in European and global markets from Asia markets correspondent Kevin Buckland. The Reserve Bank of Australia kicked off a string of major central bank meetings this week by surprising markets with a quarter-point rate hike, when most had been positioned for a pause. It even signalled the possibility of more tightening to come, jolting the Aussie to a one-week high. The Fed is up tomorrow, followed by the ECB the next day, all while the [Bank of Japan’s decision on Friday to remain a dovish](https://www.financedigest.com/dollar-hits-20-yr-high-as-yen-tumbles-on-dovish-bank-of-japan.html "Dollar hits 20-yr high as yen tumbles on dovish Bank of Japan") outlier continued to reverberate in FX markets, knocking the yen to a fresh 15-year low against the euro. Japan [markets will be shut for public holidays for the next](https://www.financedigest.com/the-next-upcoming-years-to-see-the-gastric-electric-stimulators-market-grow-kinetically.html "The Next Upcoming Years To See The Gastric Electric Stimulators Market Grow Kinetically") three days, missing not just the Fed and ECB decisions but Friday’s monthly U.S. payrolls report as well. The [ECB is among the most hawkish of the major monetary authorities and is expected to raise rates](https://www.financedigest.com/dutch-governor-knot-signals-ecb-will-keep-raising-rates-in-months-ahead-ft.html "Dutch governor Knot signals ECB will keep raising rates in months ahead- FT") for a seventh straight meeting. The debate among policy [makers is whether to opt for another half-point hike](https://www.financedigest.com/elevator-maker-kone-hikes-outlook-as-q1-profit-orders-beat-forecasts.html "Elevator maker Kone hikes outlook as Q1 profit, orders beat forecasts") or slow to a quarter-point pace. The Fed, meanwhile, is widely expected to [hike rates by a final quarter point and then signal](https://www.financedigest.com/stocks-shed-gains-treasury-yields-jump-as-fed-signals-rate-hikes-could-come-soon.html "Stocks shed gains, Treasury yields jump as Fed signals rate hikes could come ‘soon’") a pause. Money markets are still betting on a [Fed rate](https://www.financedigest.com/dollar-bounces-as-fed-seen-keeping-up-aggressive-rate-hikes.html "Dollar bounces as Fed seen keeping up aggressive rate hikes") cut before the end of the year. ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/chart-5-1736814084248-compressed.jpg) [Treasury yields](https://www.financedigest.com/world-equities-fall-u-s-treasury-yields-rise-after-hawkish-fed.html "World equities fall, U.S. Treasury yields rise after hawkish Fed") were ticking down in Asia with risks from the debt ceiling standoff ramping up. President Joe Biden has called for a meeting with top congressional leaders [amid warnings](https://www.financedigest.com/analysis-covid-crisis-could-deepen-n-korea-food-shortages-amid-drought-warnings.html "Analysis-COVID crisis could deepen N.Korea food shortages amid drought warnings") the U.S. may run short of cash around June 1, earlier than the [market had been estimating](https://www.financedigest.com/recycled-glass-market-estimated-to-experience-a-hike-in-growth-by-2019-2027.html "Recycled Glass Market Estimated to Experience a Hike in Growth by 2019-2027"). Asian stocks were lower, pressured by weakness in financial shares in Tokyo, Sydney and [Hong Kong](https://www.financedigest.com/are-you-in-hong-kong.html "Are you in Hong Kong?") after the seizure of First Republic Bank by regulators rekindled worries about the U.S. [banking sector](https://www.financedigest.com/is-automation-key-to-esg-success-in-the-banking-and-finance-sector.html "Is automation key to ESG success in the banking and finance sector?"). JPMorgan will [pay $10.6 billion to the FDIC as part of a deal](https://www.financedigest.com/volkswagens-mexico-factory-workers-reject-union-pay-deal.html "Volkswagen’s Mexico factory workers reject union pay deal") to take control of most of First Republic’s assets while gaining access to its coveted wealthy client base. The White House said the lender was “severly mismanaged”, suggesting problems are not systemic in the [second biggest bank](https://www.financedigest.com/bank-of-england-set-for-second-hefty-rate-rise-in-a-row.html "Bank of England set for second hefty rate rise in a row") failure in U.S. history. [Biden repeated a call](https://www.financedigest.com/biden-begins-fifth-call-with-chinas-xi-looking-to-tamp-down-taiwan-tension.html "Biden begins fifth call with China’s Xi, looking to tamp down Taiwan tension") for stronger rules and oversight. Meanwhile, changes may be in the offing for the Fed’s board, with the New York [Times reporting](https://www.financedigest.com/credit-suisse-executives-reassure-investors-after-cds-spike-financial-times-reports.html "Credit Suisse executives reassure investors after CDS spike, Financial Times reports") that Biden is likely to nominate current governor Philip Jefferson to be vice chair and World Bank economist Adriana Kugler as a governor. Key developments that could [influence markets](https://www.financedigest.com/revenue-growth-of-the-exterior-car-accessories-market-to-be-influenced-by-growing-end-use-adoption.html "Revenue Growth of the Exterior Car Accessories Market to be Influenced by Growing End-use Adoption") on Tuesday: Euro-area CPI data U.S. JOLTS report [Wall Street earnings](https://www.financedigest.com/disney-streaming-beats-wall-street-targets-earnings-miss.html "Disney streaming beats Wall Street targets, earnings miss") including Pfizer ahead of the open, and Starbucks and Ford after the bell (Reporting by Kevin Buckland; Editing by Edmund Klamann) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---