Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
Fed Meeting Sparks Division as Markets Brace for Possible Rate Cut 
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates 
Japan’s Rising Inflation Strengthens Case for a Near-Term BOJ Rate Hike 
Kazakhstan Central Bank Holds Interest Rate at 18% as Inflation Pressures Persist 
BOJ’s Noguchi Calls for Cautious, Gradual Interest Rate Hikes to Sustain Inflation Goals 
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 23rd July)
- August 2018 meeting: Market is attaching 95.5 percent probability that rates will be at 1.75-2.00 percent, and 4.5 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 10.7 percent probability that rates will be at 1.75-2.00 percent, 85.3 percent probability that rates will be at 2.00-2.25 percent, and 4 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 10.1 percent probability that rates will be at 1.75-2.00 percent, 81.4 percent probability that rates will be at 2.00-2.25 percent, and 8.4 percent probability that rates will be at 2.25-2.50 percent.
- December 2018 meeting: Market is attaching 3.7 percent probability that rates will be at 1.75-2.00 percent, 36 percent probability that rates will be at 2.00-2.25 percent, 54.9 percent probability that rates will be at 2.25-2.50 percent, and 5.4 percent probability that rates will be at 2.50-2.75 percent.
- January 2019 meeting: Market is attaching 3.6 percent probability that rates will be at 1.75-2.00 percent, 34.7 percent probability that rates will be at 2.00-2.25 percent, 52.4 percent probability that rates will be at 2.25-2.50 percent, and 8.9 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 probabilities have eased for near month and tightened for the far month.
- The market is pricing the third hike for 2018 in September and pricing it with 85.7 percent probability compared to 86.8 percent a week ago.
- The market is pricing the fourth hike in December with 60.3 percent probability instead of 55.6 percent probability just a week ago.
