Rate Calls Heat Up as Central Banks Reconvene

After a summer break, central banks are back in action next week, with significant rate calls at three major institutions. The Bank of Japan is expected to raise its benchmark interest rate by a quarter-point on Friday, following governor Ueda's hint that rate-setters would hold 'firm discussions' from now on.

Meanwhile, the US Federal Reserve has seen a shift in investor expectations after Fed chair Kevin Warsh's hawkish comments at Jackson Hole. The CME FedWatch tool now shows traders believing there's a 60 per cent chance of a rate hike next week.

In stark contrast to the other two central banks, the Bank of England is likely to keep interest rates unchanged at 3.75 per cent for a sixth consecutive meeting, as financial markets have trimmed expectations for tighter policy.