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🏦📊 Interest Rate Probabilities

**As seen in Macro Walk report 01/30/2022, subscribe at

  • Overnight index swap curves saw a broad increase in rate hike bets, except the yen and euro curves. The number of hikes / cuts went up by almost one hike for the Fed's March meeting, the CAD curve saw +0.50 moves for the rest of the year, both Fed and BoC decided on monetary policy last week

  • As of last week close, the CAD curve continues to be the second most aggressive in terms of tightening, just after the NZD. The BoC is seen delivering 5&1/2 rate hikes this year and the chance of a rate hike stands above 100% for both March and April meetings

  • Ahead, we will be hearing from the BoE and the ECB. The former will gather more than usual attention, as the bank is expected to raise interest rates for a second consecutive time. There is 80% chance the BoE hikes by 25bps on Thursday, while the OIS curve prices 4&1/2 rate increases by year-end. This means all meetings are 'live' and the market sees above 60% chance of hikes in every single one of them until September

  • In the EUR front, the ECB is not expected to move until October, with a 70% chance of a hike. The eurozone economy is currently lagging the U.S., policymakers are likely to push expectations lower on Thursday. In other news, 10-year bund yield holds positive ground on Tuesday session.



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