Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Bank of Japan Governor Signals Accommodative Stance Amid Negative Real Rates 
India's Central Bank Holds Rates Amid Iran War Energy Shock 
Bank of Japan Eyes Further Rate Hikes Amid Middle East Tensions and Inflation Pressures 
RBA's Hauser Flags Uncertainty on Rate Settings Amid Iran War Economic Risks 
ECB Warns of Rising Inflation Risks Amid Iran War Energy Shock 
FOMC followed through its promise and hiked rates four times in 2018 and forecasted two more rate hikes for 2019. Current Federal funds rate - 225-250 bps (Note, all calculations are based on data as of 11th March)
- March 2019 meeting: Market is attaching 1.3 percent probability that rates will be at 2.00-2.25 percent, and 98.7 percent probability that rates will be at 2.25-2.50 percent.
- May 2019 meeting: Market is attaching 1.3 percent probability that rates will be at 2.00-2.25 percent, and 98.7 percent probability that rates will be at 2.25-2.50 percent.
- June 2019 meeting: Market is attaching 4.5 percent probability that rates will be at 2.00-2.25 percent, and 95.5 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 4.5 percent probability that rates will be at 2.00-2.25 percent, and 95.5 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 9 percent probability that rates will be at 2.00-2.25 percent, and 91 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 10.9 percent probability that rates will be at 2.00-2.25 percent, and 89.1 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 16.2 percent probability that rates will be at 2.00-2.25 percent, and 83.8 percent probability that rates will be at 2.25-2.50 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have eased.
- The market is pricing just one rate hike for 2019 and that with just 0 percent probability, compared to a 9.7 percent a week ago and 4.5 percent in the week before that, which means that the market is far from pricing a rate hike in 2019, despite Fed’s forecast of two hikes.
- However, the market is pricing the possibility of a rate cut with 16.1 percent probability, compared to 0 percent last week, and 12.5 percent in the week before that.
