The hawkish repricing in interest rates expectations continues as US-Iran war escalates
News brief
As the US-Iran war escalates and the risks of a more prolonged war rise, traders are increasing the rate hike bets amid upside inflation risks Rate cuts by year-endFed: 11 bps (94% probability of no change at the next meeting)Rate hikes by year-endRBNZ: 58 bps (96% probability of no change at the next meeting)ECB: 56 bps (92% probability…
Why traders care
For traders, releases like this can quickly shift rate expectations, currency direction, index futures and broad risk sentiment.
What to watch next
- Watch the next move in the dollar, front-end yields and index futures to see whether the market prices this release as a true surprise or only a passing headline.
As the US-Iran war escalates and the risks of a more prolonged war rise, traders are increasing the rate hike bets amid upside inflation risks Rate cuts by year-endFed: 11 bps (94% probability of no change at the next meeting)Rate hikes by year-endRBNZ: 58 bps (96% probability of no change at the next meeting)ECB: 56 bps (92% probability… Rate cuts by year-end . Fed: 11 bps (94% probability of no change at the next meeting) Rate hikes by year-end . RBNZ: 58 bps (96% probability of no change at the next meeting) ECB: 56 bps (92% prob... Rate cuts by year-end Fed: 11 bps (94% probability of no change at the next meeting) Rate hikes by year-end RBNZ: 58 bps (96% probability of no change at the next meeting) ECB: 56 bps (92% probability of no change at today's decision) RBA: 55 bps (55% probability of rate hike at the next meeting) BoJ: 45 bps (53% probability of rate hike at the next meeting) BoC: 42 bps… For traders, releases like this can quickly shift rate expectations, currency direction, index futures and broad risk sentiment. Watch the next move in the dollar, front-end yields and index futures to see whether the market prices this release as a true surprise or only a passing headline.
