Although no policy change is expected, the BoE is likely to introduce forward guidance on interest rates at its next Inflation Report on August 7. ASB economist Christina Leung said yesterday both the BoE and ECB were expected to reiterate their intentions to keep monetary policy accommodative to enable the recovery in their respective economies to gain traction.
The Fed rate announcement would be a key focus for the markets, given the intensifying speculation on when it would start to taper its asset purchase programme.
''Fed chairman Ben Bernanke has watered down expectations the Fed will look to taper any time soon, with comments noting `inflation and jobs signal more stimulus is needed'.
''Given the Fed has highlighted developments in the US labour market as a key determinant in its monetary policy decisions, the release of the US non-farm payrolls at the end of this week will be even more closely watched than usual.''
Recent employment indicators pointed to a recovery in the US labour market taking place, and recent weekly jobless claims suggested US payrolls would increase by about 200,000 in July.
ASB expected a continued steady recovery in the US labour market would allow the Fed to start tapering asset purchases in September this year, Ms Leung said.
In Australia, bond futures prices are higher as traders move out of their riskier investments ahead of the busy week of central bank announcements and speeches.
UBS interest rate strategist Matthew Johnson said the Australian bond futures and US Treasuries rallied on Friday.
''There's no catalyst for the move at the moment. I think people are clearing up a bit of risk ahead of what's going to be a pretty intense week.''
Today, Reserve Bank of Australia governor Glenn Stevens will give a speech in Sydney.
Mr Johnson said the market would look for any signs the RBA would cut the cash rate next week or hold off on another reduction until later in the year.
If Mr Stevens cuts the Australian official cash, it will fall to 2.5%, the same as in New Zealand.
Craigs Investment Partners broker Chris Timms said with the Fed having made it clear any change to the quantitative easing programme - printing money to buy US treasury bonds - was data dependent, the week's economic data might be more important to Fed watchers than watching the Fed itself.
Like Ms Leung, Mr Timms would watch the monthly report on jobs.
The US second quarter gross domestic product (GDP economic growth) figures would be out on Thursday.
''Finally, in what could be quite important for the treasury market, the US Government will release its borrowing projections for the rest of 2013. With deficits looking lower than previously thought, the announcement could outline smaller treasury auctions over the medium term,'' he said.
The New Zealand and Australian dollars remained in a flat trading range yesterday.
