How have interest rate expectations changed after this week’s events?
Rate hikes by year-end
- RBNZ: 50 bps (85% probability of rate hike at the next meeting)
- ECB: 33 bps (75% probability of rate hike at the next meeting)
- Fed: 32 bps (54% probability of rate hike at the next meeting)
- BoJ: 32 bps (51% probability of rate hike at the next meeting)
- BoE: 25 bps (79% probability of no change at the next meeting)
- BoC: 15 bps (98% probability of no change at the next meeting)
- RBA: 13 bps (97% probability of no change at the next meeting)
- SNB: 7 bps (96% probability of no change at the next meeting)
- Last week's market pricing here
There's been a slightly dovish repricing almost across the board this week following the de-escalation in the Middle East and increased hopes for a US-Iran deal. Oil prices dropped below $80, easing inflation concerns.
The only central bank where we saw a slightly hawkish repricing was the BoJ. The culprit was most likely US Treasury Secretary Bessent's remarks in a CNBC interview. In fact, he stated that "it will require policy to follow up on the intervention" and added that the "US would not have joined if it was not optimistic about Japan policies”. Japan’s currency diplomat Mimura stated that he had a shared understanding with the BoJ following the intervention, which might be another hint to faster rate hikes.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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