Bundesbank: Fed small step can't rule out a big follow-on move

On September 18, Deutsche Bank analyzed that a number of other central banks will announce their policy decisions this week, following the ECB's lead in cutting the deposit rate by 25 basis points last week. Ultimately most decisions are likely to leave rates unchanged - except, of course, the most important one. It would be a big surprise if the Fed doesn't start its rate-cutting cycle on Wednesday.

Volkmar Baur, an analyst at the bank, noted: At the beginning of the week, the market was expecting a slightly more than 50 percent chance of the Fed making its first major rate cut. Our economists still expect a 25 basis point cut, and for good reason. But a small first step does not preclude a big move later. That's why the risks currently favor dollar weakness.