What are the interest rate expectations for the major central banks?

• Fed: 78 bps (99% probability of no change at today’s announcement)
• ECB: 62 bps (92% probability of rate cut at the upcoming meeting)
• BoE: 94 bps (91% probability of rate cut at the upcoming meeting)
• BoC: 48 bps (54% probability of rate cut at the upcoming meeting)
• RBA: 110 bps (97% probability of rate cut at the upcoming meeting)
• RBNZ: 72 bps (67% probability of rate cut at the upcoming meeting)
• SNB: 44 bps (99% probability of rate cut at the upcoming meeting)

Rate hikes by year-end

• BoJ: 10 bps (97% probability of no change at the upcoming meeting)

The biggest change happened with the SNB pricing as dovish comments from SNB officials and the lower than expected Swiss inflation data reinforced the expectations for the central bank to go back to negative rates. That’s been weighing on the CHF especially amid a better risk mood.

The details of the first trade deal will have a big impact on interest rates expectations and that’s what the market is waiting for at the moment. In the best case scenario, we could even see the market price in just one rate cut for the Fed in 2025.

This article was written by Giuseppe Dellamotta at www.forexlive.com.