Rate cuts by year-end
Fed: 55 bps (84% probability of rate cut at the upcoming meeting) ECB: 11 bps (93% probability of no change at the upcoming meeting) BoE: 15bps (94% probability of no change at the upcoming meeting) BoC: 22 bps (64% probability of no change at the upcoming meeting) RBA: 37 bps (66% probability of no change at the upcoming meeting)RBNZ: 41 bps (97% probability of rate cut at the upcoming meeting) SNB: 9 bps (88% probability of no change at the upcoming meeting)Rate hikes by year-end
Following the US CPI report, the pricing for the Fed increased from 57 bps to 61 bps as the data came mostly in line with expectations and wasn't strong enough to force a reassessment. Then we got an upside surprise in the US PPI data (although most of that came from portfolio management services), further improvement in the US Jobless Claims and higher inflation expectations figures in the UMich survey.
Traders eventually trimmed the aggressive dovish bets on the Fed and we settled around 55 bps of easing by year-end, which is what the market should have always expected. The data never justified more than two cuts. And I would argue that after the first cut, things will get even better and the market will likely need to trim further its bets.
The focus now switches to Fed Chair Powell's speech at the Jackson Hole Symposium on Friday. Traders will focus on whether he opens the door for a cut in September. Most likely though, he will refrain from pre-committing to a rate cut and just reiterate that they will decide on the totality of the data, making the next NFP report crucial.
For the other central banks, this week we have the Canadian CPI, the RBNZ rate decision and the UK CPI data. These events will likely influence the pricing for the BoC, RBNZ and BoE.
This article was written by Giuseppe Dellamotta at investinglive.com.Hence then, the article about what are the interest rates expectations ahead of the jackson hole symposium was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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