Forex: Major Changes to Rate Hike Expectations
February 17, 2011
Over the past 3 weeks, central banks around the world have made a number of comments that have affected rate hike expectations. On Jan 27th, I showed where rate hike expectations were at the time and since then a number of interesting changes have occurred.
First, the market is now pricing in a 25bp rate hike by the Fed in Dec. Last month, no rate hike was expected. Close to 70bp of tightening is now expected from the Bank of England, up from 50bp. The market went from pricing in 2 rate hikes from the Reserve Bank of New Zealand to one. The European Central Bank and the Bank of Canada are now expected to tighten by 75bp this year instead of 50bp. A lot can change in 3 weeks =)
Posted in 2009 british pound forecast, 2010 dollar forecast, Australian Dollar, Bank of Canada, Bank of England, British Pound, Canadian Dollar, ECB, Fed rate hike, Federal Reserve, eur/usd
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March 17th, 2011 at 10:56 am
[...] The volatility in the financial markets has led to major changes in rate hike expectations. Here are the latest numbers and the highlights compared to a month ago (see Feb numbers): [...]
March 18th, 2011 at 8:23 am
[...] The volatility in the financial markets has led to major changes in rate hike expectations. Here are the latest numbers and the highlights compared to a month ago (see Feb numbers): [...]