Traders continue to favour dovish bets amid the lack of positive developments on tariffs

Rate cuts by year-end

• Fed: 88 bps (81% probability of no change at the upcoming meeting)
• ECB: 85 bps (99% probability of rate cut at the upcoming meeting)
• BoE: 83 bps (85% probability of rate cut at the upcoming meeting)
• BoC: 50 bps (57% probability of no change at today’s meeting)
• RBA: 120 bps (86% probability of 25 bps rate cut at the upcoming meeting)
• RBNZ: 78 bps (99% probability of rate cut at the upcoming meeting)
• SNB: 29 bps (86% probability of rate cut at the upcoming meeting)

* for the RBA, the rest of the probability is for a 50 bps cut.

Rate hikes by year-end

• BoJ: 10 bps (99% probability of no change at the upcoming meeting

We can see that compared to yesterday’s update, traders stepped up slightly their dovish bets. The most notable changes (although still relatively light) have been with the BoE, given the lower than expected UK CPI, and the BoJ, after dovish comments from BoJ Governor Ueda.

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