How have interest rate expectations changed after this week's events?

RBNZ Rate Hike Expectation

62 bps

Expected rate hike by the RBNZ with an 82% probability of occurrence.

Fed Rate Hike Expectation

30 bps

Expected rate hike by the Fed with an 83% probability of no change at the next meeting.

ECB Rate Hike Expectation

24 bps

Expected rate hike by the ECB with a 72% probability of no change at the next meeting.

§ 01 Executive Snapshot

What: Interest rate expectations have shifted following recent economic events.
Who: Central banks including RBNZ, Fed, ECB, BoJ, BoE, RBA, BoC, SNB.
Why it matters: These changes in rate hike expectations signal potential shifts in monetary policy and economic outlook across major economies.

RBNZ: 62 bps hike expected with an 82% probability of a rate hike at the next meeting.
Fed: 30 bps hike expected with an 83% probability of no change at the next meeting.
ECB: 24 bps hike expected with a 72% probability of no change at the next meeting.

The recent dovish repricing in interest rates is attributed to falling oil prices and cooling inflation data, which could affect central bank decisions.
RBNZ stands out as the only major central bank anticipated to hike rates this summer, potentially indicating a unique stance compared to others.

Immediate implications include a tranquil summer for most central banks as they await further data before making decisions post-September.
Long-term implications may involve adjustments in global economic strategies depending on central bank actions regarding inflation and growth.

Potential risks include external shocks affecting energy prices and inflation data that could alter central bank strategies unexpectedly.
Competition among central banks to respond to economic conditions may lead to uncoordinated monetary policies, impacting global markets.

Upcoming meetings for central banks in the summer will be critical in determining the trajectory of interest rates moving into the fall.
Monitoring inflation data and energy prices will signal the potential for shifts in monetary policy as central banks reassess their positions.

§ 07

What changes have occurred in interest rate expectations?

Interest rate expectations have shifted following recent economic events, indicating potential changes in monetary policy across major economies.

Who are the central banks involved in these interest rate changes?

The central banks involved include RBNZ, Fed, ECB, BoJ, BoE, RBA, BoC, and SNB.

How are falling oil prices affecting central bank decisions?

Falling oil prices and cooling inflation data are contributing to a dovish repricing in interest rates, which may influence central bank decisions.

When are the upcoming meetings that will impact interest rates?

Upcoming meetings for central banks this summer will be critical in determining the trajectory of interest rates moving into the fall.