Rate hikes by year-end
- RBNZ: 71 bps (71% probability of rate hike at the next meeting)
- ECB: 64 bps (98% probability of rate hike at the next meeting)
- BoJ: 43 bps (81% probability of rate hike at the next meeting)
- BoE: 41 bps (92% probability of no change at the next meeting)
- RBA: 23 bps (93% probability of no change at the next meeting)
- Fed: 16 bps (92% probability of no change at the next meeting)
- BoC: 15 bps (99% probability of no change at the next meeting)
- SNB: 13 bps (99% probability of no change at the next meeting)
We got a slightly hawkish repricing almost across the board as US-Iran stalemate continues to extend. The good news is that there's no desire to restart the conflict. The bad news is that the Strait of Hormuz will remain closed until US and Iran reach an agreement to start phasing out the US blockade and Iran's control over the Strait.
In terms of single central banks, the expectations for an ECB rate hike in June solidified after the Eurozone preliminary inflation report showed Core CPI Y/Y rising to 2.5% vs 2.2% in the prior month. Moreover, ECB policymakers made it clear that a rate hike in June is unavoidable at this point.
For the BoJ, the probabilities for a rate hike in June jumped after BoJ Governor Ueda delivered slightly more hawkish comments as he stressed a few times that acting too late on inflation could eventually require a stronger response and risk a significant economic slowdown. Moreover, we got a Reuters report citing three sources saying that the BoJ is expected to hike rates at the upcoming meeting in June barring sharp escalation in the Middle East. The report also added that the central bank is also leaning towards pausing or slowing the pace of its bond tapering program for the upcoming fiscal year.
For the Fed, the expectations for a rate hike by year-end moved slightly upwards as we got another series of strong US data showing stable/strengthening labour market and elevated inflationary pressures.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
