Yen Sinks as BOJ Rate Hike Fails to Impress Markets 
RBA Says ASX Still Falls Short on Governance and Risk Controls 
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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 22nd April)
- May 2019 meeting: Market is attaching 2 percent probability that rates will be at 2.00-2.25 percent, and 98 percent probability that rates will be at 2.25-2.50 percent.
- June 2019 meeting: Market is attaching 20 percent probability that rates will be at 2.00-2.25 percent, and 80 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 2.9 percent probability that rates will be at 1.75-2.00 percent, 27.2 percent probability that rates will be at 2.00-2.25 percent, and 69.9 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 9.2 percent probability that rates will be at 1.75-2.00 percent, 37.1 percent probability that rates will be at 2.00-2.25 percent, and 53.7 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 13.2 percent probability that rates will be at 1.75-2.00 percent, 38.8 percent probability that rates will be at 2.00-2.25 percent, and 48 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 4.3 percent probability that rates will be at 1.50-1.75 percent, 18 percent probability that rates will be at 1.75-2.00 percent, 41 percent probability that rates will be at 2.00-2.25 percent, and 36.7 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 sharply turned dovish. However, it is less to do with the state of the U.S. economy but rather the march higher by the effective federal funds rate, which is widening against the interest rate the Fed pays on excess reserve.
- The market is pricing the possibility of a rate cut with 63.3 percent probability, compared to 43.7 percent last week, and 42.7 percent in the week before that.
