The week ahead - what does the recession mean for interest rates?
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It was a very strong week for sharemarkets in most regions, with confidence interest rate cuts are just around the corner growing and financial markets responding positively. The Swiss National Bank cut its policy interest rate on Thursday, becoming the first central bank with a G10 currency to do so. This followed the Federal Reserve's unchanged guidance for three rate cuts in 2024 (despite some stronger inflation figures of late), and the first Bank of England decision since 2021 where no members voted for a hike. Financial markets now expect the easing cycle to start in the US, UK and Europe in June, and for Australia and New Zealand to both follow in August. The final week of the March quarter will be a holiday-shortened one, with many of the major markets closed for Good Friday. US inflation will be in focus again, with the February PCE index (the Fed's preferred inflation gauge) due on Friday. In New Zealand, the latest ANZ Business Outlook is due, while we'll also get the Budget Policy Statement, ahead of the May Budget.
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