How have interest rate expectations changed after this week's event?
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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:
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4 itemsHow have interest rate expectations changed after this week's events?
The desk believes that interest rate expectations remain largely unchanged despite geopolitical tensions, with central banks maintaining a hawkish stance. Per the full note [source], the RBNZ is projected to hike rates by 83 bps by year-end, while the ECB shows a 77% probability of a hike at its next meeting. This aligns with our view that the Fed may soon pivot away from its easing bias, especially if geopolitical conditions stabilize. However, the market's current positioning appears overly optimistic regarding rate hikes from the BoJ and SNB, which may not materialize as expected.
How have interest rate expectations changed after this week's events?
How have interest rate expectations changed after this week's events?
RBNZ set to hold at 2.25% but majority now see hikes coming by end-September
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