RBA Reassesses Pricing Behaviors and Policy Impact Amid Inflation Pressures 
Bank of Korea Holds Interest Rates Steady as Weak Won Limits Policy Flexibility 
BOJ Governor Ueda and PM Takaichi Set for Key Meeting Amid Yen Slide and Rate-Hike Debate 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
New RBNZ Governor Anna Breman Aims to Restore Stability After Tumultuous Years 
UK Raises Deposit Protection Limit to £120,000 to Strengthen Saver Confidence 
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 1st July)
- July 2019 meeting: Market is attaching 21.4 percent probability that rates will be at 1.75-2.00 percent, and 78.6 percent probability that rates will be at 2.00-2.25 percent.
- September 2019 meeting: Market is attaching 12.9 percent probability that rates will be at 1.50-1.75 percent, 60.4 percent probability that rates will be at 1.75-2.00 percent, and 26.7 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 5.1 percent probability that rates will be at 1.25-1.50 percent, 30.6 percent probability that rates will be at 1.50-1.75 percent, 48.4 percent probability that rates will be at 1.75-2.00 percent, and 15.9 percent probability that rates will be at 2.00-2.25 percent.
- December 2019 meeting: Market is attaching 15 percent probability that rates will be at 1.25-1.50 percent, 36.9 percent probability that rates will be at 1.50-1.75 percent, 35.7 percent probability that rates will be at 1.75-2.00 percent, and 10.7 percent probability that rates will be at 2.00-2.25 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have eased to some extent as U.S. China to resume negotiations after a successful G20 meeting between President Trump and President Xi Jinping.
- The market is pricing the possibility of a rate cut with 100 percent probability, compared to 100 percent last week, and 98.7 percent in the week before that.
- The market is pricing a second rate cut with 90.3 percent probability, compared to 93.8 percent a week ago, and 87.2 percent in the week before that.
- The market is also pricing a third rate cut in 2019 with 53.6 percent probability, compared to 65 percent a week ago.
- The first rate is priced in July 2019 with 100 percent probability. The second rate cut is priced in September with 82.2 percent probability.
