Market participants backed down their expectations for rate hike further into the future, more so after FOMC sounded cautious in this week's meeting and Bank of Japan (BOJ) introduced negative rates.
Market now expects FED to take no action at least till September meeting.
So, where does FED hike probabilities stand for next few meetings?
Current Federal funds target range is at 0.25 - 0.5%.
- March, 2016 meeting - Market is attaching 88% probability that rates will be 0.25-0.5%, and only 12% probability that rates will be at 0.5-0.75%
- April, 2016 meeting - Market is attaching 82% probability that rates will remain at 0.25-0.5%, 17% probability that rates will be at 0.5-0.75%, and only 1% probability that rates will be at 0.75-1%
- June, 2016 meeting - Market is attaching 70% probability that rates will remain at 0.25-0.5%, 27% probability that rates will be at 0.5-0.75%, and only 3% probability that rates will be at 0.75-1%
- July, 2016 meeting - Market is attaching 67% probability that rates will remain at 0.25-0.5%, 29% probability that rates will be at 0.5-0.75%, 8% probability that rates will be at 0.75-1%, and only 4% probability that rates will be at 1-1.25%
- September, 2016 meeting - Market is attaching 57% probability that rates will remain at 0.25-0.5%, 34% probability that rates will be at 0.5-0.75%, 8% probability that rates will be at 0.75-1%, and only 1% probability that rates will be at 1-1.25%
Overall market is attaching 42% probability, that there would be no hike in 2016.
Compared to push back Dollar is trading strong. Dollar index is at 99.1.


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FxWirePro: Daily Commodity Tracker - 21st March, 2022




