Eurozone Bond Yields Fall as Oil Slump Eases Inflation Fears Ahead of Central Bank Meetings 
BOJ Holds Rates at 1% as Inflation Outlook Eases, October Rate Hike Still Possible 
Japan PM Sanae Takaichi Unveils Growth Plan as BOJ Independence Concerns Lift Bond Yields 
RBA Signals More Rate Hikes Possible as Australia Battles Stubborn Inflation 
Brazil Cuts Selic Rate to 14% as Inflation Eases but Risks Persist 
Japan Services Producer Prices Rise 3.2% in June, Supporting BOJ Rate Hike Expectations 
FxWirePro: Daily Commodity Tracker - 21st March, 2022 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
China Holds Loan Prime Rates Steady for 14th Month as Economic Recovery Remains Uneven 
Chile Central Bank Holds Interest Rate at 4.5% as Inflation and Global Risks Persist 
FOMC increased interest rates in March and June and increased its forecast from three rate hikes in 2018 to four rate hikes. June decision was unanimous. Current Federal funds rate - 175-200 bps (Note, all calculations are based on data as of 25th June)
- August 2018 meeting: Market is attaching 100 percent probability that rates will be at 1.75-2.00 percent.
- September 2018 meeting: Market is attaching 29.2 percent probability that rates will be at 1.75-2.00 percent, and 70.8 percent probability that rates will be at 2.00-2.25 percent.
- November 2018 meeting: Market is attaching 27.7 percent probability that rates will be at 1.75-2.00 percent, 68.6 percent probability that rates will be at 2.00-2.25 percent, and 3.7 percent probability that rates will be at 2.25-2.50 percent.
- December 2018 meeting: Market is attaching 11 percent probability that rates will be at 1.75-2.00 percent, 43.9 percent probability that rates will be at 2.00-2.25 percent, 42.8 percent probability that rates will be at 2.25-2.50 percent, and 2.2 percent probability that rates will be at 2.50-2.75 percent.
- January 2019 meeting: Market is attaching 10.1 percent probability that rates will be at 1.75-2.00 percent, 40.3 percent probability that rates will be at 2.00-2.25 percent, 42.4 percent probability that rates will be at 2.25-2.50 percent, and 7 percent probability that rates will be at 2.50-2.75 percent, and 0.3 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have softened.
- The market is pricing the third hike for 2018 in September and pricing it with 70.8 percent probability compared to 83.3 percent a week ago.
- The market is pricing the fourth hike in December with 49.7 percent probability instead of 53.4 percent probability just a week ago.
- It is important to note that despite Fed’s forecast, the market is not ready to price in a fourth hike.
