Rate cuts by year-end
- Fed: 16 bps (65% probability of rate cut at the upcoming meeting)
2026: 82 bps
- ECB: 1 bps (96% probability of no change at the upcoming meeting)
2026: 12 bps
- BoE: 15 bps (57% probability of rate cut at the upcoming meeting)
2026: 57 bps
- BoC: 3 bps (87% probability of no change at the upcoming meeting)
2026: 10 bps
- RBA: 4 bps (86% probability of no change at the upcoming meeting)
2026: 18 bps
- RBNZ: 28 bps (91% probability of rate cut at the upcoming meeting)
2026: 44 bps
- SNB: 3 bps (89% probability of no change at the upcoming meeting)
2026: 8 bps
Rate hikes by year-end
- BoJ: 6 bps (75% probability of no change at the upcoming meeting)
2026: 42 bps
*The 2026 pricing reflects the cumulative easing expected by the end of 2026, not how much easing is expected in 2026 alone.
If we take a look at the last update on October 31, we can see that not much has changed in terms of market pricing despite a few key data releases.
Last week, the main highlights were the US ADP and ISM data, the BoE rate decision and the Canadian employment report. The US data was overall strong but the market pricing remained basically the same suggesting that traders are now probably waiting for the NFP and CPI to have the final say.
The BoE decision was fairly dovish but Governor Bailey sounded like a December cut was conditional on a
confirmation of the improvement in inflation. The BoE will get two employment
and inflation reports before the next meeting, so they will have enough data to
make a better decision.
Lastly, the Canadian employment report surprised once again to the upside with a notable fall in the unemployment rate from 7.1% to 6.9%. It didn’t change anything in terms of market pricing just because the BoC already signalled that they reached the end of the cutting cycle. Nonetheless, the data reinforced the BoC’s position.
This article was written by Giuseppe Dellamotta at investinglive.com.