Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
BOJ Rate Decision in Focus as Yen, Inflation, and Nikkei Hang in Balance 
Bank of Korea Signals Potential Interest Rate Hikes as Inflation Remains Elevated 
ECB Signals Possible Interest Rate Move if Inflation Outlook Fails to Improve 
RBA Raises Interest Rates to 4.35% Amid Rising Inflation Risks and Middle East Tensions 
Paraguay Holds Interest Rate at 5.5% as Inflation Remains Stable Amid Global Uncertainty 
ECB Rate Outlook: Ceasefire Eases Pressure but Hikes Still Expected in 2026 
FOMC increased interest rates again in March and maintained its forecast for three rate hikes in 2018. FOMC also forecasted a faster pace of hikes next year than previously forecasted. March decision was unanimous. Current Federal funds rate - 150-175 bps (Note, all calculations are based on data as of 16th April)
- May 2018 meeting: Market is attaching 93.8 percent probability that rates will be at 1.50-1.75 percent, and 6.2 percent probability that rates will be at 1.75-2.00 percent.
- June 2018 meeting: Market is attaching 93.8 percent probability that rates will be at 1.75-2.00 percent, and 6.2 percent probability that rates will be at 2.00-2.25.
- August 2018 meeting: Market is attaching 90 percent probability that rates will be at 1.75-2.00 percent, and 9.9 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 23.1 percent probability that rates will be at 1.75-2.00 percent, 69.5 percent probability that rates will be at 2.00-2.25 percent, and 7.5 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 20.7 percent probability that rates will be at 1.75-2.00 percent, 64.7 percent probability that rates will be at 2.00-2.25 percent, 13.5 percent probability that rates will be at 2.25-2.50 percent, and 1 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 10 percent probability that rates will be at 1.75-2.00 percent, 42 percent probability that rates will be at 2.00-2.25 percent, 40 percent probability that rates will be at 2.25-2.50 percent, 7.5 percent probability that rates will be at 2.50-2.75 percent, and 0.5 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probability has eased but only marginally for both near and far months.
- Next hike is priced in June with 93.8 percent probability, instead of 98.4 percent a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 76.9 percent probability compared to 80.2 percent a week ago.
- The market is pricing the fourth hike in December with 48 percent probability instead of 48.3 percent probability just a week ago.
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