- Fed: 80 bps (99% probability of no change at the upcoming meeting)
- ECB: 60 bps (95% probability of rate cut at the upcoming meeting)
- BoE: 90 bps (97% probability of rate cut at the upcoming meeting)
- BoC: 45 bps (57% probability of rate cut at the upcoming meeting)
- RBA: 108 bps (98% probability of rate cut at the upcoming meeting)
- RBNZ: 72 bps (69% probability of rate cut at the upcoming meeting)
- SNB: 37 bps (96% probability of rate cut at the upcoming meeting)
Rate hikes by year-end
- BoJ: 8 bps (98% probability of no change at the upcoming meeting)
We can see that compared to last Thursday’s update, the market trimmed the easing bets for the Fed as a resilient labour market gives the central bank a reason to keep interest rates steady as they await more developments on the tariff side. A rate cut in June has now less than 50% chances as the market sees a rate cut in July as most likely.
The 80 bps priced in by year-end could see further adjustment as the Fed on Wednesday is likely to reiterate that two rate cuts remain the base case unless the labour market weakens meaningfully.
This article was written by Giuseppe Dellamotta at www.forexlive.com.