Rate cuts by year-end
- Fed: 22 bps (86% probability of rate cut at the upcoming meeting)
2026: 84 bps
- ECB: 1 bps (99% probability of no change at the upcoming meeting)
2026: 7 bps
- BoE: 23 bps (90% probability of rate cut at the upcoming meeting)
2026: 64 bps
- BoC: 1 bps (93% probability of no change at the upcoming meeting)
2026: 7 bps
- SNB: 2 bps (92% probability of no change at the upcoming meeting)
2026: 7 bps
Rate hikes by year-end
- BoJ: 19 bps (75% probability of rate hike at the upcoming meeting)
2026: 66 bps
- RBA: 0 bps (100% probability of no change at the upcoming meeting)
2026: 32 bps
RBNZ 2026: 40 bps (95% probability of no change at the upcoming meeting)
*The 2026 pricing reflects the cumulative easing/tightening expected by the end of 2026, not how much easing/tightening is expected in 2026 alone.
This week has been pretty lacklustre in terms of macro events. The most notable change was seen on the BoJ pricing front. In fact, following Governor Ueda's comments on Monday, the expectations for a rate hike this month started to grow larger.
The probabilities then firmed up in the final part of the week as we started to get the usual "leaks" from various sources saying that the BoJ was preparing for a rate hike this month.
Such "leaks" are of course deliberate and common as Japanese officials try to give early hints to the market to avoid surprises and high volatility.
Other than that, we didn't have much. Yes, we got a few US data releases that came in on the softer side, but they didn't change anything. Next week, all eyes will be on the Fed's decision.
