The Federal Reserve, European Central Bank and the Reserve Bank of Australia have monetary policy meetings scheduled this week and some investors expect these central banks to change monetary policy. Here’s what the market is pricing in according to interest rate futures. You can compare them with the Central Bank expectations back in September. What is interesting is that the market does not expect the ECB to cut interest rates this year even though many economists predict a 50bp cut in December. FED - Nada for 2011 and 2012
ECB - 25bp rate cut by July (sharp upgrade from Sept when rate cut expected in Dec)
BOE - Nada for 2011 and 2012 but slight shift to dovish bias
BOC - Rate Cuts now expected in 2012, down from rate hike by April
RBA - 25bp Rate cut by Dec - upgrade from 100bp by year end
RBNZ - No Major Changes, Rate Hike Expected July 2012
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Kathy Lien is employed as Co-Head of Global Research for Global Forex Trading, a division of Global Futures & Forex, Ltd. (GFT). However, the KathyLien.com web site is maintained by Kathy Lien personally, and is separate and independent from her employment with GFT. GFT is not affiliated with and does not control the content of the KathyLien.com web site, and opinions expressed by Kathy on the KathyLien.com web site are not necessarily the opinions of GFT
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