With less political risk following Emmanuel Macron winning the first round of the French Presidential Election, probability of interest
rates rising in the 3 major centres have moved higher Monday, with the Eurozone seeing the highest increase. MNI PINCH calculation of probabilities of interest
rate change are below:
FED: MNI PINCH still see market pricing no chance of a 25bp rate hike at the next meeting on May 3, however the probability of a hike in June has risen
to 66% from 41.5% seen last Wednesday and in July, markets are pricing in a 70% chance of a hike, up from 50%. While the next full 25bp rate hike has been
brought forward to Sep 2017 from Dec, according to MNI PINCH calculations.
ECB: MNI PINCH still see the market pricing no chance of a interest rate hike at this Thursday's ECB meeting, but probability of a 10bp hike in December
has increased to 33% from 9% seen on Apr 19. While chance of a rate hike increases to 63% in March 2018 vs 23% previously.
BoE: In the UK, MNI PINCH sees little change in probability of interest rates rising this year, however a possibility of a rise at the beginning of 2018
has ticked higher. MNI PINCH calculate markets pricing in a 14.5% chance of a 25bp rate hike in November little changed from last Wednesday, however chances
of a 25bp rate hike in February 2018 has risen to 25% from 15%.
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