Traders increase bets for BoE rate cut at the May meeting after the UK CPI release

Rate cuts by year-end

• Fed: 62 bps (85% probability of no change at the upcoming meeting)

Following the weak US consumer confidence report, traders increased the easing bets from 59 bps to 62 bps.

• ECB: 51 bps (78% probability of rate cut at the upcoming meeting)
• BoE: 45 bps (54% probability of rate cut at the upcoming meeting)

Following the lower than expected UK CPI figures, traders went from expecting no change to pricing in higher chances of a 25 bps cut at the May’s BoE meeting.

• BoC: 44 bps (72% probability of no change at the upcoming meeting)

Following Trump’s positive comments on Canada and Mexico, traders revised expectations a bit lower from 46 bps to 44 bps.

• RBA: 63 bps (88% probability of no change at the upcoming meeting)

Following the unexpected tax cuts announcement yesterday, traders see less easing this year from 65 bps to 63 bps.

• RBNZ: 60 bps (65% probability of rate cut at the upcoming meeting)
• SNB: 7 bps (80% probability of no change at the upcoming meeting)

Rate hikes by year-end

• BoJ: 36 bps (72% probability of no change at the upcoming meeting)

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