Today’s Stock Exchanges, June 16th. Japan keeps rates steady. Maxi options expirations in sight, a test for the market rally

MILAN – A muted day is announced for Western trading, after the decisions of the Fed and the ECB: the former has paused in raising rates, but has made it clear that it will move again; the second has not stopped and will not do so even in July. Today it was the turn of the Bank of Japan which kept its ultra-expansionary monetary policy unchanged, as expected, in the face of the still existing uncertainty on the trend of inflation and the uncertainties relating to wage prospects (in April the thirteenth consecutive real decline). The committee led by Governor Kazuo Ueda has chosen to leave short-term rates in negative territory at minus 0.1%, and keep the yield control curve unchanged – in force since September 2016, when the BoJ decided to set a target 0% for 10-year government bonds.

As explains the Bloomberg, then, are particularly complicated hours for Wall Street traders due to an unusual deadline: a mountain of options are about to expire. And investors are wondering whether they should continue to bet on the uptrend with new derivatives, or hedge on the downside. The agency cites the estimates of Rocky Fishman, founder of the Asym 500 derivatives analysis company, which speaks of a good 4.2 trillion dollars of contracts linked to stocks and indices: 20% more than a year ago. An event, known as OpEx, which risks creating turbulence also because it coincides with the quarterly expiry of index futures and with the rebalancing of the reference indexes, including the S&P 500.