Central Bank

(Bloomberg) -- The withdrawal of a time-tested liquidity backstop offered by the Federal Reserve would represent the greatest ri

FILE PHOTO: An eagle tops the U.S. Federal Reserve building's facade in Washington · Reuters By Michael S. Derby (Reuters) -The

US PCE inflation up next, but will consumption data matter more?UK budget and CPI in focus after hawkish BoE decision.Euro turns to flash PMIs for bounce as rally runs out of steam.Inflation numbers out of Tokyo and Australia also on the agenda.

Today we receive rate decisions from the Bank of England (BoE), the Swiss National Bank (SNB) and the Riksbank.

The central bank is highly likely to keep its benchmark interest rate at 4.5% at its March meeting.The latest monetary policy decision comes at a time of heightened uncertainty over potential trade tariffs and as the U.K economy shows signs of stalling, with monthly growth data showing anemic output.Thursday’s meeting comes just days before U.K. government taxation changes come into force that have proven unpopular with businesses, which say their rising tax burden could dent growth further.

The surge in macro uncertainty related to tariffs, including the possibility of a global trade war, has complicated the Fed’s already difficult task of setting interest rates to accommodate an unknown future. The added complication of factoring in how White House policy will evolve, and how that will influence future inflation and economic activity, is about as challenging as it gets when the main tool is the blunt instrument of adjusting interest rates.

The Bank of Japan (BoJ) unanimously voted to keep its policy rate unchanged at 0.5%. Governor Kazuo Ueda did not indicate when the next rate hike might occur but emphasised the Bank's commitment to its normalisation strategy. Given the strong preliminary Shunto results, inflation and private consumption will be key to watch in the coming months.

Euro may take advantage of the dollar’s erosion.

We expect the Bank of England (BoE) to keep the Bank Rate unchanged at 4.50% on Thursday 20 March in line with consensus and market pricing.Data has been mixed and amid elevated uncertainty, this warrants a continued signalling of only a gradual approach to monetary policy easing.We expect the reaction in EUR/GBP to be rather muted with risks tilted to the topside.