Market Highlight 29.04.2026

Federal Reserve officials are expected to keep policy rates unchanged this week. The more difficult question is whether the FED should signal that rate cuts this year are effectively over, or merely delayed. The risk of a U.S economic slowdown combined with inflation had already been raised by the FED last year, when tariffs threatened to push prices higher and constrain employment. Now, the energy shock stemming from a war in the Middle East is adding to that risk, weighing on the world’s largest economy at a time when inflation has never fully returned to the FED’s 2% target. The U.S Central Bank is almost certain to keep its benchmark rate unchanged at 3,5% - 3,75% at its two-day meeting ending early Thursday morning. But this meeting, also the last one for Mr. Powell in his capacity as FED Chair, is expected to clarify whether the possibility of a rate hike later this year has been formally discussed.

The Bank of Japan kept its policy rate unchanged at 0,75%, but the 6/3 vote split - the widest margin since Governor Ueda took office - has raised expectations that a rate hike could come as early as June 2026. Three members voted in favor of raising the policy rate to 1%, citing rising inflation risks driven by energy supply disruptions linked to the war around the Strait of Hormuz. The JPY initially strengthened, but later reversed and weakened after Mr. Ueda’s press conference, in which he warned of a softening growth outlook, pushing USD/JPY back up to 159,75 last night.

Domestically, interbank USD/VND traded steadily around 26.350 yesterday as the market prepared to enter the 30/4 - 1/5 holiday period. The SBV lowered the central rate by VND 2, implying an effective daily ceiling of 26.366.

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