Markets increase bets on ECB rate cuts following the softer inflation figures

Rate cuts by year-end

• Fed: 64 bps (85% probability of no change at the upcoming meeting)

• ECB: 60 bps (90% probability of rate cut at the upcoming meeting)

Following the soft French and Spanish CPI data, traders increased the expected easing from 56 bps to 60 bps.

• BoE: 45 bps (56% probability of rate cut at the upcoming meeting)

• BoC: 48 bps (62% probability of no change at the upcoming meeting)

• RBA: 66 bps (86% probability of no change at the upcoming meeting)

• RBNZ: 60 bps (70% probability of rate cut at the upcoming meeting)
• SNB: 12 bps (75% probability of no change at the upcoming meeting)

Rate hikes by year-end

• BoJ: 33 bps (73% probability of no change at the upcoming meeting)

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