Rate cuts by year-end

• Fed: 58 bps (77% probability of no change at the upcoming meeting)
• BoE: 45 bps (49% probability of rate cut at the upcoming meeting)
• ECB: 6 bps (98% probability of no change at the upcoming meeting)
• SNB: 5 bps (95% probability of no change at the upcoming meeting)

Rate hikes by year-end

• BoC: 8 bps (99% probability of no change at the upcoming meeting)
• BoJ: 53 bps (76% probability of no change at the upcoming meeting)
• RBA: 37 bps (83% probability of no change at the upcoming meeting)
• RBNZ: 42 bps (99% probability of no change at the upcoming meeting)

You can find last week’s market pricing here.

We’ve seen notable changes in market pricing this week for the RBA, BoE and the Fed. Traders bumped up rate hike expectations for the RBA after the central bank delivered a hawkish hike on Tuesday. In fact, the RBA signalled two more rate hikes this year compared to just one expected by the market.

The BoE surprised with a dovish hold as 4 members dissented for a rate cut versus 2 expected. Moreover, they changed the guidance in the statement from “the bank rate is likely to continue on a gradual downward path” to “the bank rate is likely to be reduced further”. Inflation forecasts were also revised much lower across the board. Lastly, the Agents’ Pay Survey showed wage growth to average 3.4% in 2026 vs 3.5% expected.

The market has also turned more dovish on the Fed in the final part of the week due to the selloff in the stock market and a couple of soft US jobs data. In fact, we got a big jump in the Challenger’s job cuts report and much lower than expected Job Openings.

The Jobless Claims data hasn’t shown the same bleak picture though, so I wouldn’t jump to conclusions on just one challenger and job openings report. Next week, we get the US NFP report on Wednesday and that is going to confirm or deny the latest dovish repricing.